Victims of Aberdeen Council embezzler share £300,000 payback

More than £300,000 of council tax has been returned to Aberdeen residents after a former official stole £1 million to fund his lavish lifestyle.

Michael Paterson embezzled £1,087,444 from the local authority over 17 years in his role as council tax and recovery team leader.

He first started taking cash in November 2006 before being reported by a fellow colleague in 2023.

Over a lengthy period, he spent the money on foreign holidays, five-star hotels, and fine dining.

The 60-year-old appeared at the High Court in Edinburgh last July and was jailed for four years.

The court heard that Paterson started taking cash illegally to pay off debts of £20,000.

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Michael Paterson was still in debt after spending stolen money on foreign holidays, dining out, buying Apple goods, shopping and his flat.

Overall, he made 622 false refunds to himself due to “unrestricted and unmonitored” access to two computer systems.

Earlier this year, it was revealed that the council had received £104,630 from the sale of a home owned by Paterson.

Meanwhile, a further £417,523 was recovered from his pension fund.

The Audit, Risk, and Scrutiny Committee recently received a further update from the Accounts Commission on efforts to repay the stolen cash.

They were told that the full value embezzled has been recovered either from Paterson or council insurers.

Money has also been received from further prosecution under the proceeds of crime laws.

The local authority’s top solicitor, Alan Thomson, told the committee: “In this case, they had an identifiable victim and they were able to give us some of that money back.”

Chief finance officer Jonathan Belford said the council was the “victim of the crime” and has been endeavouring to get as much of the stolen cash back.

He added: “We’ve checked over 1,800 different accounts in relation to that and we have managed to repatriate over £300,000 of the money directly to individuals.”

Councillor Kairin van Sweeden asked if the audit committee could have done more to prevent this crime from happening.

She added: “The worst aspect of this was the length of time that it continued, and this is an embarrassment for us as an organisation.”

Mr Belford replied that “lots of things” could have been done in hindsight.

“Trying to make sure that we’re improving the controls where we can as speedily as we can is something that we now need to continue,” he stated.

“In terms of the struggle with internal controls, I can’t hand on heart say to you that every control is 100% secure at any particular point, as people are devious and are looking for ways around things.

“What we can do is continue to put energy and effort into maintaining those controls, follow up and take action, and that’s what we continue to try to do.”

Mr Belford told the committee that officers are working to find opportunities to improve its controls across its finance systems.

He said that changes, including enhanced scrutiny of refunds and strengthening of segregation of duties, are now in place.

This means that the risk of similar fraud occurring has been “significantly reduced”.

Aberdeen City Council has also updated its policies and training on counter fraud and whistleblowing, while a fraud group has been set up.