ERA finds employee manipulating bond records for personal use
The Employment Relations Authority (ERA) has ordered a former property management administrator to pay $869,112 in damages after being found guilty of misappropriating company funds.
The case, centred around allegations of fraud and breaches of the employee's employment contract, concluded with the ERA awarding full compensation to the employer for the losses incurred due to the fraudulent actions.
The former employee, who had worked for the firm for several years, held a position of considerable responsibility in managing bond payments and rental transactions.
This role involved controlling the company's financial accounts and ensuring that bond payments were processed correctly.
However, in August 2020, the company discovered discrepancies in bond records, leading to an investigation into the employee's conduct. The inquiry revealed that the employee had been misappropriating bond payments by diverting them into a personal account.
Initially, the company became concerned when certain tenant bonds were not lodged with the Bond Centre, as required.
A subsequent investigation showed that the employee had been manipulating bond records, with evidence pointing to fraudulent activity dating back as far as 2015.
Despite the clear evidence against the individual, they failed to engage with the legal process, including missing several case management meetings and failing to submit a defence or attend hearings.
The case, brought before the ERA by the employer, resulted in a ruling that found the employee in breach of their employment agreement and liable for the financial damage caused.
The employer's investigation uncovered that the employee had been systematically diverting tenant bond money into personal accounts. This included creating fake invoices and falsifying bond payment records to cover up the fraudulent activities.
The company also discovered that the employee had been using tenant bond money to pay personal rent and had manipulated the company's accounts for several years.
To assess the full extent of the financial damage, the company engaged with an accounting firm specialising in forensic investigations.
Its report confirmed that the total loss due to the fraudulent activities amounted to $881,240.96, based on detailed forensic accounting of bond discrepancies, fraudulent invoices, and misdirected tenant payments.
The final determination of loss was $869,112 after accounting for money owed to the employee for holiday pay.
In its ruling, the ERA found that the former employee had breached both the express and implied terms of their employment agreement, including the duty of good faith and obligations to manage company funds with honesty and integrity.
The ERA further concluded that the employer had suffered significant financial harm as a direct result of the employee’s fraudulent activities.
The ERA ordered the individual to repay $869,112, with interest to be applied from the date of the ruling until full payment is made.
