Wednesday 24th June, 2015

Last week a former BMW-Mini accountant was jailed for £6m of fraud after a random audit found he had been pretending to pay suppliers, but instead transferring the money into his own back pocket.

Johannes Franken was jailed for five years and four months after he admitted money laundering and five counts of fraud between September 2011 and December last year. The 60-year-old diverted millions of pounds into his own bank account while working at the BMW Mini plant in Cowley by making up 59 fake payments to suppliers. He used the £6m to buy cars, jewellery and a diving school in Mauritius, which was described by the judge as “a grotesque breach of trust”.

Finance Director and General Manager of Invu, Ian Smith, says: "The processes in place at many businesses we’ve worked with show there’s a bit of ‘pantomime’ effect taking place around invoicing. How firms record supplier information and sign off invoices is in a rather muddled state and this shows that it is crucial to have the right systems in place to stop miss-payments, let alone fraud from your very own employees!

“This type of fraud is related to the payment process but it also impacted the supplier invoice processing too. This reinforces the importance of ensuring your company’s Purchase Order Processing (POP) practices are streamlined. We recently commissioned a piece of independent research that found these practices are fragmented - a healthy hunting ground for a fraudster.

While working as a team leader, Mr Franken made false entries in the Cowley plant’s computer system showing payments to supplier Total Security Protection, while actually entering his own bank details.

Almost £3m remains unaccounted for.