A rogue financial controller at property company Hurford Salvi Carr who plundered client accounts of £1.3 million did not make off with leaseholder funds.
Stephen Hurford told LKP that the block management accounts were not touched by Karen Chin, 45, who was based at HSC’s London HQ in Clerkenwell.
“Leaseholders’ money was not touch at all,” says Mr Hurford. “She took the money from the other property accounts but had not access to the block management division.
“The client money the was taken has been paid back in by me and my partners.”
Chin was found guilty last month at Blackfriars Crown Court and is behind bars pending her sentencing on February 13.
The court found that she had diverted client funds at the upmarket London estate agency and property management company into multiple bank and credit card accounts that she controlled.
Chin blew the cash on high-living, luxury goods and holidays, including the rental of a private plane and a £35,000 family vacation to Mauritius.
Chin was employed four days a week as a financial controller on a £38,000 annual salary and worked at HSC from 1999 until she was sacked on June 25, 2013.
She had made a total of 304 money transfers into her own accounts between 2008 and 2013.
‘She was trusted with the company chequebook and all the online payments, but an audit report revealed she had been dishonestly siphoning off client account funds into her own accounts,’ said the prosecution.
On her conviction, Judge Richardson said: ‘You are plainly going to prison and the only question is for how long. I want to know what you have done with the money and if it is true you have been shifting assets.
‘I have no intention of leaving you outside prison where you may cause further mischief in relation to your assets.’
On 28 June 2013 the High Court froze Chin’s assets, including her £1.5m family home, but only £12,000 of the stolen cash has been recovered. A £50,000 cheque she wrote to her former employers bounced.
A spokesman for HSC said: “An audit carried out in 2013 identified a number of accounting irregularities. These were reported to the police and have culminated in a former employee pleading guilty to nine counts of fraud at Blackfriars Court. No financial losses were incurred by clients, tenants or third parties.”
LKP has sympathy for Hurford Salvi Carr, whose employee turned out to be criminal.
Fortunately, all the money that was stolen, which belonged to the company’s clients, has been returned.
LKP is relieved to hear from Stephen Hurford that none of the money stolen was held in the leaseholders’ accounts.
Leaseholders’ funds are held in a vague “trust” by property managers and they have been stolen in the past: by rogue employee Simon van Houten, of Rendall and Rittner who made off with £122,000 and was jailed in July 2012 and conman residents’ management director Brian Copsey, who stole £1 million off his neighbours, and went to prison in April last year.
It is blindingly obvious that there should be better protections for these funds, which amount to millions of pounds with the larger property management companies.
Apart from the risk of being plundered, the funds also risk being pooled, with contingency fund shortfalls in one site, being made good by the fund of another.
It is an area where the greatest transparency is required.