'I trusted her, I feel such a fool' says company director whose firm has been left a third smaller by actions of fraudster

Company director Phil AustinCompany director Phil Austin
Company director Phil Austin
The director of a family-run TV firm has revealed how his workforce has been left a third smaller after a couple who were employed by him defrauded him of tens of thousands of pounds.

Karen Corless and Colin Vernon, of St Paul’s Road, Lancaster, were employed in the finance department of Life Channel Group Limited in Clifton, near Preston, which produces programmes and provides equipment and programmes to schools.

But several staff reportedly left the firm because they were unhappy their roles and responsibilities were being changed.

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Director Phil Austin, 63, says it is now clear Corless was bringing in the string of changes in order to cover up her crimes.

Colin Vernon and Karen CorlessColin Vernon and Karen Corless
Colin Vernon and Karen Corless

He said: “The upheaval was horrendous. It has taken two years of my life to fully investigate what has happened.

“I trusted her implicitly. I feel like I’ve been a fool.

“Their activities increased as soon as Colin Vernon also became employed.

“The company could have been in danger because of their actions. The loss is substantial and the whole shape of the company has changed.

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“We haven’t had to cut jobs but around a third of the staff left - we’re the smallest we’ve been for 20 years - because she started changing systems to cover things up. We’ve lost some really good people.

“We had the Inland Revenue chasing us up for three months and had to employ tax specialists.”

In April 2017, faced with being exposed by a pending audit, Corless, 41, confessed to Mr Austin in a letter that she had been taking money from petty cash to pay off her own credit card and to deposit in her own account fraudulently.

Preston Crown Court heard she told him she had also used the company’s Paypal account to pay for items she kept herself, such as televisions.

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She admitted to taking £8,500 from the company and steadfastly denied that she took any more, or that her partner Vernon knew anything about it.

However, a probe revealed a loan of £1,099 had been falsely ‘authorised’ to be paid to Vernon.

And on December 23, 2015 - before Vernon was even employed by the company - a payment for his wage was paid into their joint account.

An additional unauthorised salary payment was paid into Vernon’s account on February 25, 2016.

In total, it is believed she stole more than £19,000.

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Investigators also identified an accounting anomaly where more than £66,000 worth of computer equipment was unaccounted for, making a total loss to the firm of £85,000.

Mr Austin added: “The irony is that she was earning £60,000 a year and he was earning £30,000 - they were already getting £90,000 from the company before the thefts.

“I don’t expect to get any of the cash back, they’ve had two years to get rid of it.”

Corless pleaded guilty to stealing £4,500 petty cash and two TVs between November 1, 2015 and April 29, 2017.

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She also admits committing fraud over the same period by using the company’s finances to purchase goods from Amazon, eBay and eBuyer, and false accounting, relating to falsifying stock, money recording records and the firm’s petty cash spreadsheet.

Recorder Robert Lazarus imposed a 12-month jail term suspended for a year, and a curfew.

Vernon, 44, pleaded guilty to one count involving the fraudulent loan agreement and was sentenced to 150 hours of unpaid work.

Both will face proceedings under the Proceeds of Crime Act, to determine how much they benefited by, on November 4.

Mr Austin said the fact they had avoided an immediate jail term sent out the wrong message to other businesses in Lancashire.

Phil Austin

Colin Vernon and Karen Corless