A trusted finance director who found himself “out of his depth” stole money from his motor dealer employer on a regular basis over a 14-month period.

Despite having an annual salary of £60,000 Kevin Smith was said to be living beyond his means and took money from Sherwoods Motor Group using various methods to defraud the business of a total of £15,414 in 2019 and 2020.

But Durham Crown Court heard that it cost Sherwoods a further £36,608 in increased auditors’ fees to reconstruct company accounts after his activities came to light.

The 47-year-old defendant, of Low Hogg Street, Trimdon Colliery, admitted nine counts of fraud at a magistrates’ court appearance last month.

His case was sent by the magistrates to the crown court for sentencing.

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Shaun Dryden, prosecuting, told the sentencing hearing that Smith was employed by Sherwoods in 2018, having worked for a former “incarnation” of the group previously.

His activities began to come to light as company accounts were being prepared for the auditors for the year end in December 2019.

Mr Dryden said the company accounts director was approached by the auditors in May 2020, questioning the figures, as they did not match those on the purchase ledger.

The figures had previously matched, so to resolve the discrepancy she compared what was on the computer system with the figures sent to the auditors.

Mr Dryden said it appeared that Smith changed those figures and sent the altered version to the auditors.

Smith claimed he omitted details of the company’s Barclaycard account as he said it was, “a mess” and he did not want to answer “difficult questions” from the auditor.

Some of the account figures were found to be wrong, which concerned the accounts director, and other account figures were checked and found to be either deleted or amended.

Mr Dryden said it led to a further investigation of Smith’s financial conduct as it raised, “serious concerns”, with a number of discrepancies uncovered.

It emerged he had awarded himself use of a company fuel card, to which he was not entitled, running up a bill of £2,680.

The list of employees entitled to fuel cards was sent to the managing director, but Smith removed his name and changed the figures for those genuinely included.

Expense sheets also showed discrepancies, with payments of £1,978 and £5,000 into Smith’s bank account in March and April 2019, with no explanation what he was being recompensed for, while he twice claimed more than £3,000 for computer equipment, forging the managing director’s signature to approve the payments.

Mr Dryden said there were further sums of £483 and £831 transferred from the company to Smith’s account, again supposedly “approved” with the use of the managing director’s forged signature.

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He also gave a customer his own account details for a £1,000 payment to Sherwoods and supplied auditors with a screen shot of the company’s accounts, having falsified the figures.

Smith was to admit altering VAT returns and the bank statement, sending the incorrect version to the auditors.

Mr Dryden said Smith’s employment was terminated in July 2020 and when later interviewed he said he felt “pressured” in his job which was “too much for him”, as he did not have an accounting background.

He said the pressure was exacerbated by a medical condition from which he suffered, and in a later interview he provided a statement in which he apologised to the directors and said he felt ashamed of his actions.

Mr Dryden said Smith admitted “living beyond his means”, despite his “fairly substantial salary.”

The overall loss was put at £15,414, but the accounts director said the costs of further investigating his fraudulent activity came to £36,608 in increased auditors’ fees, so the direct cost to Sherwoods of his actions came to £52,022.

She added that the fear was at the time that it may have affected the company’s credit rating.

Christopher Bevan, in mitigation, said the defendant suffers from depression and took an overdose of paracetamol and alcohol in March last year, for which he was prescribed with anti-depressants.

Mr Bevan said the defendant, who is of previous good character, was under “great stress” at the time, but fully accepts the prosecution case and is “deeply remorseful” for the impact on the company.

He said the defendant had ruined the good reputation he had built himself working for many years in the motor industry.

Mr Bevan said the defendant initially intended to pay the money back, but his offending continued and he knew he would eventually be caught.

Smith still wants to reimburse Sherwoods, which Mr Bevan said would be easier if he were not to receive an immediate prison sentence.

He added: "It seems there wasn’t significant planning and it was more of an opportunistic crime to 'support his lifestyle', living beyond his means."

Judge Jo Kidd, however, said Smith was, “manipulative, calculated and deeply dishonest” and questioned Mr Bevan’s claim that it was not well planned and “opportunistic”.

She said the defendants' offending had to be seprated from his, "woeful incompetence" in a job in which he was, "out of his depth".

But she agreed to would be easier for the defendant to repay the money if he retains his liberty.

She, therefore, imposed a 20-month prison sentence, suspended for two years, during which Smith must complete 200-hours’ unpaid work.

Proceeds of crime proceedings were put in place with a hearing on March 13, at which Judge Kidd said Smith would be told to make his first repayment to Sherwoods 28 days afterwards.

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