Ex-CFO jailed for £800k company fraud

The former finance head of an asset management company who stole more than £800,000 from his employer has been jailed for five and a half years, after an investigation by the Metropolitan Police fraud and linked crime online unit

Sunil Jain, who lived in Harrow, was employed by First International Group as vice president of finance from 2010 to 2014. The investigation began in September 2014 after a case referral from Action Fraud.

An internal audit of the company had revealed Jain had made unauthorised payments into his own personal bank account by creating fake invoices or by making direct transfers unsupported by invoices.

Jain, who had responsibility for posting the company's accounts online, entered false details to hide the payments. The investigation revealed that Jain used a former employee's banking fob to ensure he was able to bypass the company's internal finance controls, which required two counter signatories.

The offences are believed to have taken place between 2011 and 2014 and resulted in a loss to the company of £818,702.

In a statement, First International Group plc said: 'Mr Jain was employed by the Company as vice president of finance/CFO from 2010 to 2014. During that period, he stole a substantial amount of money from the Company.  His wrongdoing was discovered in 2014, during an internal review, and he was summarily dismissed from the Company.

'The Company reported Mr Jain to its regulatory body, the Financial Conduct Authority (FCA), who in turn reported the matter to the fraud division of the Metropolitan Police. 

'Mr Jain’s trial started on 2 May 2017, and lasted for four weeks. At the end of the long trial, the jury took less than 60 minutes to decide that Mr Jain was guilty of the serious charge of theft, but not guilty of the two minor charges. The Judge considered the charge of theft to be very serious, and on 9 June 2017, Mr Jain was sentenced to five and a half years in jail.'

At the trial, the prosecuting counsel commented in his summation, that Mr Jain’s actions involves ‘breach of trust, is one of high culpability, planning and sophistication’.

Jain was sentenced at Harrow Crown Court on 9 June, after he was found guilty following a four-week trial at the same court in May.

First International Group, based in Mayfair, handles investment advice, asset management and brokerage. Its financial statement for the year ended 31 December 2016 shows funds under management of $399m £309m) from which the group achieved turnover of $2.9m and a loss for the year of $211,024. The company reported a pre-tax loss of $238,000, including an exchange loss of $108,000, which it said was the result of a weak pound against the reporting currency.

In its previous accounts for the year ended 31 December 2014, the company said it had undertaken an organisational review leading to a strengthening of the audit and compliance functions and the introduction of a ‘robust risk and reporting process’. It said this internal review also led to ‘the discovery of a serious fraud resulting in the immediate dismissal of the CFO who is currently under investigation by the authorities’.

Those accounts reflected the financial impact of in year impact of the fraud as $360,000 and noted a  $494,000 impact for the same reason in 2013.

Following sentencing, First International Group (FIG plc) added: 'In terms of governance, safeguards and risk management FIG Plc has undertaken an exhaustive review of all its policies and processes, in addition to a robust FCA mandated compliance regime.

'This includes organisational changes, strict segregation of duties, stringent four-way approval processes, internal and external audit reviews, and the replacement of all legacy accounting systems and IT systems with industry leading standards.'  

Detective constable Ingrid Schuetterle, from the fraud and linked crime unit of the Metropolitan Police, said: ‘Jain abused his position of trust as the chief financial officer of an asset management company to steal a substantial amount of money.

‘He used his knowledge of the company's accounting system to hide his fraudulent activity. Jain has shown no remorse for his actions.’

Pat Sweet |Reporter, Accountancy Daily [2010-2021]

Pat Sweet was the former online reporter at Accountancy Daily and contributor to the monthly Accountancy magazine, pub...

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