ALLEGED DEFALCATIONS

Otago Daily Times, Issue 22787, 24 January 1936, Page 5

ALLEGED DEFALCATIONS

CHARGES AGAINST INSURANCE AGENT OVER £2300 INVOLVED Alleged defalcations, totalling £2378, were embodied in charges preferred against Leslie David Woolf, insurance agent, in the City Police Court yesterday morning before Mr H. W. Bundle, S.M. To the charge of having stolen the sum of £9O from the Australian Alliance Assurance Company,: of which he was a servant, on December 16, 1935, originally preferred against the accused, the followcounts were added:— / That on divers dates between October 1 and December 16, 1935, he. stole the sum of £242 13s. That on divers dates between April l x and September 30. 1935, he stole the sum of £337 3 S 7d. • That on divers dates between December 20, 1934, and March 31, 1935, he stole the sum of £482 12s 2d. That on clivers dates between September 3, 1932, and July 24, 1934, he .stole the sum of £1316 6s sd. ' All the charges were in respect to the funds of the Australian Alliance Assurance Company. The accused was represented, by Mr A. G. Neill. .Detective. Sergeant Hall said that he did not intend to offer evidence regarding the first charge involving £9O, as that sum was included in the other amounts.

With the court's permission, the charge was withdrawn. * : » .?.<".

Woolf waa appointed chief agent iit Otago for the Australian Alliance Assurance Company, Ltd., on April 1, 1932, said Mr Hall, and had been given authority to open an account with the Commercial Bank of Australia to cover his own claims and commissions. It was alleged that sums of money were overdrawn by the accused, and- also that he had no, authority to withdraw the money that formed the subject of the charges.

Charles Everest Harrison, manager in New Zealand for the Australian Alliance Insurance Company, said his head office was in, Auckland. On April 1, 1932, he appointed the accused chief agent in Otago for his company. A banking account was opened in the Commercial Bank in Dunedin in the name of the company on June 20,. 1932. The credit was in the vicinity of £36. Permission was granted to the accused to sign cheques on behalf of the company.and to draw on the account, no one else in Dunedin having that authority. The accused was.allowed to draw cheques for the payment of claims, sundry expenses, and" his own. commissions. He was entitled to draw commissions monthly on the" total ; amount of;premiums of the various' insurances'' effected, 1 'irrespective of whether oj: not the premiums had been received by; him' on: that particular date. He ; was: required-tc-send a list/of the outstanding premiums'-at the end of each quarter." The last list received by witness was for the. quarter ended .'.September, 1935.. He desired to obtain' frqm the 'accused particulars of the. various items'' comprising the-'amount shown as .outstanding,, and these 'the accused "failed to seiid forward as requested. ' Witness instructed Mr Kuddim'an to make inquiries in Dunedin, and on December 19 the result of'those inquiries was placed before him.. ' On December 23,- he received a letter from the accused -in which he admitted having overdrawn the 1 account at the bank and expressed regret: at his action. • ■■",'-• : ' •

, Witness saw the accused in Christ-_ church on December 31, and endeavoured to ascertain from him; the cause of his alleged misappropriations. The accused replied that' the overhead-expenses of - his business had.been;too great, and he had taken'the money- as a. means of carrying on- He said,he had not stolen the money as he had, debited his own account in the company's books. Witness replied that he had.without any doubt whatever misappropriated the funds and covered up his transactions by forwarding to head office incorrect reports regarding the out- , standing premiums. On January 1 witness came to Dunedin and obtained, the services of Mr Smith, a public accountant. The accused's two ledgers, cash book, and journal were audited and a total of £2378 16s was found to have been misappropriated. The accused admitted that his returns of Outstanding premiums had been incorrect. Various premiums had been received from clients and agents and had been correctly accounted for by the accused, the money being paid into the company's bank account and official receipts issued. The accused had, however, drawn cheques from _ the company's bank account, and had paid them into his.own account and had then debited his account on the company's banks as commission, to which he / had no right.. . In his statement regarding the outstanding premiums, he included the amount misappropriated as outstanding. The accused held other. ', mercantile agencies.

To Mr Neill, witness said that the appointment of Woolf as agent, was in writing. letter was addressed to L. D. Woolf and,Co., of which the accused was the only member at that time. Actually the company, and not the accused, was agent for the Australian Alliance Company, Ltd. On October 25, 1935, witness received advice that L. D„ Woolf and Co. had been turned into L. D. Woolf Insurance, Ltd. Witness agreed to the bank account being operated upon by the accused's company, and all returns thereafter were received in the name of L. D. Woolf Insurance, Ltd. The accused was riot permitted to draw an advance against commissions. The accused's books were. never inspected or audited while he was the company's agent, as such a practice was not usual in connection with a chief * agent. An . inspection would have'disclosed the deficiency. Woolf had to deal directly with the Auckland head office. He was allowed to chaise travelling expenses, in moderation, which came under the heading of general expenses. Witness was unable to state whether he had ever, taxed the accused with over-charging for expenses, without referring to correspondence. In connection with the auditing of accounts, witness said that the company had two firms operating as chief agents for 72 years without ever having their books audited by the company. The inspection of the accused's books by Mr Ruddiman immediately disclosed theposition. The books were correctly kept-in regard to each separate account, and all premiums received by the accused were correctly kept in the books. The money received for premiums was paid into the company's bank account, commissions were drawn from the account, and the amount alleged to be misappropriated was shown in the accused's books as debited against himself. The certificates received from the bank tallied with the statements forwarded by the accused to"i witness's office. The outstanding agents', balances .were supposed to represent the "gross premiums presumably unpaid .-by agents or pther clients. It had not been noticed that for one quarter the debits had increased beyond the income received by way of premiums. .He did not recognise the money mentioned in the charges as debts owing by Woolf to the company. Thomas Ruddiman, manager in Dunedin of the London and Lancashire Insurance Company, said he held, a subpower of attorney for the Australian Alliance Assurance Company. On the receipt of instructions he saw the accused in his office on December 18. The accused said he might as well make a clean breast of the whole position, and threw his ledger open, saying it was all there. On December 19 witness exercised his power of attorney and took possession of the accused's books, giving them to a public accountant for auditing. George Humble Glaister Smith, public accountant, said that he made an inspection, of the . accused's ■ books, covering a period extending from May, 1932, to December, 1935. He prepared a schedule showing the amount overdrawn each month. He gave details of the amounts overdrawn during various periods, which had been made the subject of the charges. Keith Russell Reed, bank officer, employed by the Commercial Bank at Duncdin, produced 11 cheques totalling £407 18s Bd, drawn by the accused from the bank. The cheaues were drawn by L. D. Woolf and Co., and also by L. D. Woolf Insurance, Ltd., and signed by L. D. Woolf. Witness also produced 17 cheques, totalling £697 Is 9<l, 14 cheques totalling £4OB 10s, and 76 cheques totalling £2056 15 6 lOd, covejring a period from September, 1932, onwards. These cheques had been signed by the accused as agent for the Australian Alliance Assurance Company. At this stage the magistrate adjourned the case until this morning, when evidence will be given by another witness. The accused was released on the same bail aa previously.