Court leaves charity club's recovery of stolen £150k open

Friday 13 December 2019

A convicted fraudster who stole £150,000 from an after-school club to shore up the firm he worked for, will not be the one to reimburse the charity, the Royal Court has decided.

The Court yesterday opted not to use their power to order former accountant William McDermott to pay back the money to the Ace of Clubs (AOC) from his own pocket – leaving the matter to be resolved between the charity, and the firm that benefited from his fraud.

McDermott was sentenced to three years’ in prison for the thefts, but routine proceedings following his sentencing to either confiscate some of his assets, or order that he compensate the victim of his offending, have been complicated by the fact that he didn’t take any of the charity’s money for himself. 

As treasurer of the charity, the 62-year-old took the money from AOC to shore up the company he worked for – Professional Fulfilment Services Jersey Ltd (PFS) - whilst it was struggling financially.

Pictured: McDermott was sentenced to three years' imprisonment for the thefts.

A bid from the prosecution to seize what they saw as McDermott’s ‘tainted’ wealth failed because it couldn’t be established that he had benefitted financially from his offending.

Now, a similar attempt to impose a court order obliging McDermott to pay the Ace of Clubs back as much as he can afford has also failed, due to the company which unwittingly received the funds stating their intention to repay the charity themselves.

The Court’s reasons for making the decision will form part of a written judgment submitted at a later date, but the hearing on the compensation application focused on concerns that if the Court intervened, it could mean that either the charity will get more than it lost, or that the fulfilment company would hold onto the stolen funds.  

Crown Advocate Richard Pedley, appearing for the prosecution, argued that whilst PFS had expressed its intention to pay the funds back to the charity, there was currently no legal order in place to guarantee it would do so. 

Pictured: The matter of recuperating the stolen funds will have to be organised by the parties themselves.

He added that the main consideration for the Court should be the fact that McDermott was “the architect” of the loss incurred by the charity, and therefore he should be the one to, at least in part, compensate for that loss.

The prosecution moved to use the sale value of a Spanish property belonging to McDermott, as well as some money from his pension pot, to form a compensation order totalling £74,360.03.

But Advocate James Bell, representing McDermott, said that it wasn’t for a criminal court to wade into civil matters, and a compensation order should only be made “in simple and straightforward cases.”

The defence lawyer reasoned that to “avoid the risk of double counting” the Court should not impose a compensation order and to “allow civil remedies” to solve the problem of how the charity gets reimbursed. 

Jurats Thomas and Christensen heard the case, and Royal Court Commissioner Sir William Bailhache was presiding.

As a result of the Court’s decision not to make a compensation order, the matter of the club’s reimbursement will have to be arranged between the parties themselves, either informally or via civil proceedings.