Jail for £1m lavish lifestyle council fraudster

A worker who enjoyed a lavish lifestyle while embezzling more than £1m from Aberdeen City Council over 17 years has been jailed.

Michael Paterson, 59, exploited his position as a council tax and recovery team leader to keep taking the money, starting back in 2006 until last year.

He began stealing to pay off debts, but then started spending the money on foreign holidays, eating out and technology. He was only caught after a colleague raised suspicions about a transaction, prompting an investigation.

First offender Paterson, who admitted the crime, was jailed for four years at the High Court in Edinburgh.

Paterson’s crimes took place between November 2006 and September 2023.

He had started working for the local authority in 1988, and rose through the ranks to become council tax and recovery team leader.

Paterson had unsupervised authority to issue council tax refunds of up to £3,000.

He could also alter payee account details without authorisation or verification, which he did to transfer money to himself.

Paterson realised that he could benefit in situations where a householder had left a property and had not reclaimed for overpayment of their council tax.

He had started the embezzlement as he was worried about his debts.

However he would instead spend the money he was stealing on foreign holidays, eating out, and technology – particularly Apple goods – as well as maintenance of his home.

Prosecutor Brian Gill KC said: “He had just been hoping that he would not be found out.”

The scam worked until a colleague noticed that a refund of more than £2,000 had been made on a computer system using Paterson’s username.

She confronted him as she thought that the account was not due a refund.

He told her he had been conducting tests and had accidentally put the refund through the live system instead of the test system.

She reported her concerns to bosses who launched a probe into Paterson’s activities – and the scale of his crime emerged.

Police were called in, and he said: “I know I’ve done wrong. I regret what I’ve done”.

The final total taken was £1,087,444.47.

Paterson – whose salary was £35,000 a year – was still in debt at the time of his arrest.

Proceeds of Crime action against Paterson, in a bid to recover money, will be held later this year.

Defence solicitor advocate Iain Paterson said the former council worker accepted imprisonment was inevitable.

He told the court: “He is thoroughly ashamed of his actions and obviously as a consequence was dismissed from the council.

“He accepts what he did was totally wrong.”

Judge David Young KC pointed out that Paterson was able to perpetrate the crime because he was appointed to positions of trust by his employer, which he repeatedly breached over many years.

“This is unquestionably a serious matter and it must therefore bring serious consequences for you,” he said.

“I am told you spent money on family and friends but also there was significant spending on yourself.”

The judge told Paterson he would have faced a sentence of six years but for his early guilty plea.

The council said it was in the process of checking records and would be in touch with anyone affected with a view to reinstating any council tax credit due.

“The council apologises to any resident affected,” the statement said.

“The council’s financial controls and processes – including council tax refund arrangements – have been reviewed and strengthened.”

Moira Orr, who leads on homicide and major crime for the Crown Office and Procurator Fiscal Service (COPFS), said: “This was an egregious betrayal of trust by a council worker who took advantage of his position to embezzle public money from his employers.”

Det Con Tom Cameron of Police Scotland said: “Paterson portrayed himself as an honest and professional individual and instead used his position to obtain a significant amount of money.

“I hope this investigation highlights our commitment to fully investigate all reports of financial crime.

“Anyone who believes they’ve been a victim of a financial crime, or has information about such offences, is urged to contact Police Scotland.”