Is this fraud?

[northend77]

A friend of mine helps run a guides group and explained this morning that, as she receives a lot of cash from parents and supporters and does not go to the bank several times a week (as would be needed), uses the cash herself and banks a cheque to the same amount into the business account when she visits the bank. She was told last night that she was committing fraud by doing this. Is this correct?

[philegal]

yes, it could be argued that way... though i would prefer to term what she does as "improper" rather than "fraud" as she does not (seem to) have the intent...

then again she might be depriving the business of interest income in which case that could be fraud...

if it is part of her duty to remit the cash at certain required intervals and she fails so to do that might farther be "negligence"...

[tkessex]

Whilst your friends intentions are probably completely innocent, what she is doing is fundamentally wrong and amounts to little less than theft (I wouldn't say fraud is strictly the correct term). You need only imagine how her actions would be perceived should she fail to get to the bank one day and somebody notice the shortfall in the group's account, to realise that it's not something to even consider doing.

[Peter Bowen]

She'd probably be way better off having the parents put the money directly into the account rather than risk being accused of fraud!

[Ian J]

Originally Posted by tkessex

Whilst your friends intentions are probably completely innocent, what she is doing is fundamentally wrong and amounts to little less than theft (I wouldn't say fraud is strictly the correct term).

I have no idea of the legalities but it obviously isn't fraud as there is no intention to deprive or deceive. I must admit that if I were in her position I would probably have done exactly the same thing without giving a thought that others might view my actions differently as to my mind it is the most practical way of handling what are probably relatively small sums.

[LimeLegal]

It would be viewed as legal fraud as each week the funds are not in the correct account and are being used for her own purposes so she deprives for a few days with small amounts each week.

The correction is made each week but she uses the money for another unapproved purpose on each occasion this is done, a bit like an employee taking from her or his employer's till during the week and paying it back on pay day.

The legal arguments centre on what would happen the one week when she was unable to get to the bank at all or died without the money being repaid? This is why the role of trustee is bound by rules, for the protection of those who give the cash to the organisation and expect to see it in the bank each week in the same form as it was given. Simple rules on lodging it in a secure place and bank each 2 weeks or when there is £150 would be fine, just not this arrangement.

In any event her behaviour with the money gives cause for concern in her position as a trustee. Ideally she needs to start behaving like a trustee and not even thinking of this money as for her own use or resign and give the job to someone else to avoid someone reporting her to the police and this ending up messy and in the news.