Swindler’s astounding double life

Press, 1 October 1979, Page 31

Swindler’s astounding double life

NZPA London The amazing double life of the building-society chief, Harold Jaggard, who swindled investors for 40 years out of millions of dollars, has been revealed for the first time by an official report.

The chairman of Grays Building Society in Essex, “a short, stout, rather colourless man,” he secretly supported two households tor 18 years and gambled away at least SSM on dpg and horse racing. The East End docker’s son, who was sacked for dishonesty in one of his first jobs, had his suits made by West End tailors, smoked expensive cigars, ran two and sometimes three cars, and shopped at Harrods — all on a salary never more than $10,500 a year.

The lon g-awaited inquiry report — by an accountant, Mr lan Davison, and a barrister, Mr Murray Stuart-Smith, Q.C. — calls for extensive changes to the 1962 Building Societies Act in the light of their discoveries.

Jaggard, aged 79, killed himself when $l4 M was missed in March, last year, from the society’s funds. His fraud, one of the biggest swindles in history, had’ gone on since 1938.

The inspectors say: “His forgery was astounding in its scale, audacious in its

execution, and consistently successful, for by it he hoodwinked the auditors for over 40 years.”

The 228-page report says a good auditor could have detected erasures and alterations in the accounts, and says Jaggard should have been challenged years ago over “bizarre” cash procedures. The society’s board of directors — three were over 80, two in their 70s. and the remaining four all over 60 — are blamed for failing to exercise adequate control.

The auditors are accused of “persistent gross failure” to discharge their professional duties properly. The Building Societies Association is criticised for its “somewhat misguided” efforts to defend Grays from pressure for reform before the crash. Eventually, the Grays’ deficit was taken over by the giant Woolwich in a 8.5. A- . rescue effort. The Registry of Friendly Societies, the movement’s “watchdog,” is rebuked for praising Jaggard’s “impeccable records.”

Among the recommendations, the report to the Chief Registrar of Friendly Societies urges that the law be amended so that a building-society chairman will never again combine

the office with that of chief executive. The inspectors say the three -times -married Jaggard, who stole an average of $130,000 a year, died a relatively poor man. He had $3OOO in his current account, no investments, no life insurance, and his $70,000 chalet bungalow in Hutton, Essex, was in his wife’s name.

Mr Jaggard’s annual forgery of Grays’ antiquated, handwritten accounts is said to have been “swift, effective, and simple.”

The trusted servant stole cash, substituted cheques that had bypassed the accountancy system and, at the end of each year, falsified the summaries of shares deposits and mortgages — “one of the oldest and commonest forms of fraud.”

Jaggard made his staff prepare the summaries in faint pencil. “Try not to press so hard,” he would say, and the only ink allowed was Stephens’ blue — which is not permanent.

With the approach of the annual audit every February or March, Jaggard took the ledgers home and, in spidery handwriting, forged the society’s records on his dining room table while h i s wife watched television.

Jaggard’s third wife,

whom he married in 1960. would see him tug every so often at a big oldfashioned adding machine. “I used to get cross with him because he was working every night,” she said. “I used to think it seemed wrong that he had to do such a lot of work.” The report says Jaggard’s son and two daughters — Olga, now aged 58, John, aged 34, and Rosemary, aged 31 — received substantial gifts of money “looted” by their father from society funds. He financed cars, paid off overdrafts and, in the case of his eldest daughter and her husband, advanced money for a deposit and mortgage payments on a sub-post office in 1973.

“No-one was prepared to admit to us that they suspected that the source of these funds was the cash in the society’s safe. Of those who knew something Of his living standards, some attributed it to successful gambling, others to the fact that they believed he earned more than he did, while the staff of Grays for the most part believed he had private means.”

The avid gambler betted six days a week. The 11 full-time staff led by Mr George Chapman, assistant secretary from 1947 until the crash, knew their boss gambled for he always kept a mid-day racing

paper under his desk. But the staff communicated with the directors only through Jaggard. The report said: "We have formed the view that. although it is possible Mr Jaggard had an accomplice many years ago. he had for the last 30 years acted alone, benefiting from the inadequacy of those with whom he surrounded himself. “Although neither persuasive nor charming. Mr Jaggard managed to dominate the scene.” The chairman’s employment policy was to engage untrained staff. Every member had been engaged from school or soon after, none had professional training and, most important, none had worked at another building society or bank. Mr Chapman told the inspectors that “The scales dropped from his eyes” only when he began working for the Woolwich when it took over. As the years passed, the burden on Jaggard of covering up increased. Even before the auditors’ discovery of the fraud, the inspectors believed he was aware the game was up. He was already being pressed to resign, and mechanisation of the accounts was also being discussed. “Such a change must have revealed his fraud. He took the only wayout.”

In March. 1978, a simple break with routine and nothing more brought Jaggard’s house tumbling about his ears. An accountant, Mr Arthur Nudd, who supervised the Grays’ audit for 27 years, arrived, and for the first time he was not cx[ ected. He broke routine by telling a comptometer operator: “Jump to ledger No. 12.” Jaggard was at her side in a flash, left the office, and was never seen alive again by anyone at Grays. Hours later, he was found dead from a drug overdose in a bath of water at his home. A suicide note, left for his v ife. said: “Do not go to the bathroom alone For 40 years I have tried t<» put somebody else's m’sdeeds right, and 1 can take no more. Chapman no blame at all. Be good to my relations. Love. H.”