$1 million fraud case uncovered

An Auckland accountant has been struck off after fleecing his clients out of more than $1 million in an elaborate fraud that took years to uncover.

Between 1991 and early 2000 Ian Clarke - who ran a small North Shore practice doing accounts, taxes and GST returns for individuals and small companies - stole more than $1 million from his clients, many who had no idea that they were being defrauded until they were told by police.

Last November, Clarke was convicted of 444 fraud-related charges, involving at least 45 clients, and sentenced to three years and three months in jail.

The final indignity came last week when he was struck off the Institute of Chartered Accountants' Register.

Police were alerted to the fraud by a client of Clarke in early 2000, but it took Peter Preece, a senior forensic accountant with Auckland police, more than four years to unravel Clarke's records and reveal the extent of his offending.

He discovered that when Clarke was given a cheque for GST by a client, he would submit a false return to the Inland Revenue Department for a smaller amount. The balance would then be credited to either Clarke's own taxes or that of other clients.

Clients' tax refunds were credited to an account belonging to Clarke.

He then deposited the amount he had told clients they would receive in their accounts and kept the balance for himself.

Mr Preece said it was not often that chartered accountants defrauded their clients, but when they did it was difficult to uncover as often clients had no idea it was happening.

"It is all about trust, and one hopes when dealing with professionals that they won't abuse it."

Mr Clarke had paid back most of the money he had taken from his clients, said Mr Preece.

Last week, as a result of his conduct, Mr Clarke was struck off the Institute of Chartered Accountants. Spokeswoman Lorinda Kelly said its key concern was to protect the public.

"We expect very high standards from our members. If we become aware of unethical behaviour we do not hesitate to take disciplinary action."

- Herald on Sunday