SUM OF NEARLY £11,500 INVOLVED.

Star (Christchurch), Volume XLIV, Issue 643, 22 December 1932, Page 11

SUM OF NEARLY £11,500 INVOLVED.

Ex-officials of Assurance Company Plead Guilty to Theft. DEFALCATIONS BEGAN IN 1924. THE CASE in which two ex-employees of the Alliance Assurance Co., Ltd., were charged with the theft of nearly £11,500 from that company was heard in the Police Court this morning before Mr H. A. Young, S.M. Clarence Alfred Palmer, an insurance clerk, aged thirty years, 116, Stapleton’s Road, and Walter Vernon Wiseman, insurance clerk, aged thirtythree years, 60, Lindsay Street, were jointly charged that on or about December 15, 1924, and on other dates between then and October 30, 1932, while in the employ of the Alliance Assurance Co., Ltd., they stole £11,431 4s 4d in money, the property of the Alliance Assurance Co., Ltd. The accused pleaded guilty, and were committed to the Supreme Court for sentence. Bail was fixed in the sum of £SOO with two sureties of £2OO each.

Mr Lascelles appeared for the accused. Chief-Detective Carroll stated that the two men had been in the employ of the company for fifteen years. Palmer was cashier and Wiseman was chief clerk. They had begun the thefts in 1924. The system they had worked on was that when the monthly returns were made Palmer deducted the amount of their defalcations from the total and entered the resulting figure. They had kept a careful check on their thefts. In 1924 they had stolen only £3 19s, and in the following years, £252, £470, £Bl3, £1413, £1643, £2401, £2554 and until October, 1932, £1907. They had checked each other’s work. The books had been audited and the total sum involved was £11,431 4s 4d. The accused admitted stealing these sums. Herbert Thomas Francis, manager of the Christchurch branch of the firm, 135, Hereford Street, stated that for some time past the premium income had fallen away. Until October last he had no idea of the reason. At that time he gave notice to clients, whose premiums were shown to be overdue. Usually these notices went from Wiseman, but in October some went out without passing through his hands. One of the clients wrote in, added witness, and as a result of this witness spoke to Wiseman. A matter of about £lO was involved. Wiseman said that the amount had been cross-debited. Witness looked into the books, and found this was un-trye. Palmer as cashier was then questioned in Wiseman’s presence, and Wiseman said that he had borrowed this amount from the cash and forgotten to pay it back. Witness was not satisfied. The general manager for New Zealand came to Christchurch, and Palmer was again interviewed in his presence. Wiseman was then on holidays, but returned soon after, and he also was again interviewed. He admitted the theft of £3OO or £4OO. Palmer had also made a statement admitting thefts. The system had first been used to cover a small theft, and they had carried on when they found it was so easy. The money had been spent paying instalments on houses, buying motor-cars and furniture, and in living expenses. Following these admissions the books had been audited, and the total theft discovered. Palmer had been employed by the company for fourteen years, and was earning £3OO a year. Wiseman had been with the firm for sixteen years, and was earning £350. Men Suspended. In answer to Mr Lascelles, witness said that the two accused had been suspended. They had given assistance in discovering the full +otal of thefts. Palmer had asked that “ another person ” who was involved should be given the opportunity of owning up to the offences. They had both agreed to hand over all their assets to the company. The ledgers kept by these men had been the principal record of the company’s income. Palmer’s figures were checked by another clerk, but Wiseman was responsible for the correcness of the books. The books had never been checked by an auditor. There was no audit of the cash box account. The same system was used in other branches of the company. Accused Man’s Statement. In a statement submitted to the Court, Palmer stated that about January, 1930, he found one day that the cash in the box was short. He had discussed the matter with Wiseman, whom he knew also had a key. When the matter was discussed they had not the money to make up the shortage

and discussed means of hiding it through the books. He could not remember whether the first suggestion of dishonesty came from, himself or Wiseman. They had agreed that the best method was by inserting incorrect totals for the additions in the renewal premium ledger. In order to keep the percentage of reinsurance normal they also had to falsify the re-insurance borderau.

Wiseman, in a statement, made on December 2, said that in 1928 or 1929 he commenced to falsify the books of the company in collusion with Palmer, by inserting false totals of premiums in the fire renewal premium register and the accident new and renewal premium registers. The individual items were correctly entered, but in adding up the totals for transfer, he inserted the wrong totals, which were less than the correct totals by the amounts he had taken. He believed Palmer treated the fire register in the same manner. The correct individual premiums had in each case been entered in the fire renewal premium register and in the accidnt new and renewal premium registers, so that a correct record was preserved which would show the differences m totals. The suggestion in the first instance came from Palmer, continued Wiseman. In the first instance the additions were prepared by Palmer in pencil and checked by Dixon, wrong totals then being inserted in ink. This was done to deceive Mr Francis, as he was repeatedly asking for comparative statements to account for the fall in the nett premium income. Wiseman said he was aware of this as it was necessary to keep up the Alliance nett premiums in the No. 2 return by reducing the reinsurance premiums, as Mr Francis, at the end of each month, required from him so much detailed figures to account for the fall in the nett premium income. As far as he was concerned, continued Wiseman, the amount he had appropriated in cash was about £3OO to £4OO. “ Frittered Away.” He had been to the races occasionally, but did not bet heavily. The money had simply been frittered away. Wiseman stated that he purchased a house within the last twelve months for £I3OO, but,there were mortgages of £BOO and £3OO on it. The furniture belonged to his wife. He had an endowment policy for £2OO. He owned an Essex car, for which he paid £3BO tw r o years ago, but he still owed £6O or £7O on the car to Dominion Motors, Ltd. He had no other assets and no expectations. He was willing to transfer his equity in the house, the car and the policy to the company. With regard to the three amounts which Palmer alleged to be missing from the cash box during his (Wiseman’s) absence, and to other sums for which he could not account, he was certain that no other member or members of the staff were concerned with the misappropriations. Evelyn Wright, accountant of the company at the head office, Wellington, gave evidence regarding the auditing of the books and the amount of the thefts. All the falsifying was done in the additions. Detective Edwards said that he arrested the two accused at their homes. They admitted stealing money, but had no idea of the total amount taken When they were later faced with a statement of the shortages made up by Mr Wright, each said that they did not think the totals would be as large, but they w’ere satisfied with Mr Wright’s figures. They made statements admitting this.