A property management firm launched an investigation and discovered "significant discrepancies" in bond reconciliation records. Photo / 123rf
A former office worker at a property management firm siphoned more than $860,000 from the company, mostly in bond money from tenants, to help pay her own rent.
The company was alerted something was amiss in August 2020 when a tenant got in touch about a problem over their bond.
It ended with the former long-serving and trusted employee breaking down at a meeting and admitting what she had done.
“It is what you think it is,” she cried.
She has now been ordered by the Employment Relations Authority (ERA) to pay damages of $869,112 for what the employer contended was misappropriated funds.
And the amount keeps growing.
In a recent costs decision by the ERA, the woman was ordered to pay a further $17,483 as a contribution towards the costs incurred by the business in pursuing the application.
The woman does not have name suppression but cannot be named without risking identifying the business for whom a permanent and wide-ranging non-publication order was made.
The firm, named as WVS in the authority’s recent decision, contended the money was taken over several years.
An insurer assessed the loss at $881,240, of which $789,307 related to bond money the woman had either not paid or underpaid, evidence showed.
She also took money from the business in general after setting up a “ghost account” that she used to pay herself money from WVS.
ERA member Rowan Anderson said the former worker had not substantively responded to the claims, nor had she meaningfully engaged with the authority’s investigation.
The woman began working at one of the firm’s suburban offices as an office administrator in 2003 and then became a property management administrator until late August 2020 when her employment ended.
The role involved control over rental incomes, trust accounting systems and payment schedules, the general manager told the ERA.
Part of her job was to pay tenants’ bonds to the Bond Centre, which she did in batches of six to 10, usually on a weekly basis.
It was later found she had been holding back payment of one or two bonds each time, which she used to help pay her own rent.
Things began to unravel when a tenant contacted the business in August 2020 with concerns about the bond.
The tenant’s email was later deleted from the property manager’s inbox by the woman in an apparent attempt to prevent her actions being discovered.
However, the ERA said in an earlier decision this was done without her realising the manager was working late and had already seen the email.
Other instances were later discovered of bonds not having been lodged at the Bond Centre as they should have been.
The firm’s senior management investigated further and found discrepancies in bond reconciliation records.
The administrator was asked to provide reconciliations and sent a document purporting to be one, but “significant discrepancies” showed up when compared to that from the Bond Centre.
A meeting was called at which the woman broke down and admitted what she had done, followed by her acceptance that she could no longer continue working for the company.
At a later meeting attended by the woman and her husband, she discussed how she had initially made a mistake but continued with her actions because she had not been caught.
She confirmed she had altered landlord accounts for her benefit, and had set up a different bank account she used from February 2018 onwards to pay herself money from WVS.
She also confirmed she usually received around eight bonds per month, two of which she would use to pay her rent or pay into her “ghost account”, and that she had manually manipulated bond lodgement documents.
A later meeting was held to discuss a repayment plan, followed by a message from the woman to the general manager in which she acknowledged she had “done wrong” and was ashamed.
In an email that followed, she expressed remorse, that she wanted to pay the money back but would need time to sell her belongings, and that she didn’t want to go to jail.
The police confirmed in October 2023 they had opened an investigation but could not say then if charges would be laid.
In April last year, police told the ERA their investigation was at an early stage and they were waiting to hear whether WVS wanted the probe to continue.
NZME has approached the firm’s CEO, who declined to comment on the decision or whether it intended to pursue criminal charges against the woman.
WVS claimed the total owed was $869,112 after taking into account $12,129 in holiday pay that was withheld by the company with the woman’s agreement.
The ERA concluded the uncontested evidence established the losses suffered by WVS were directly attributable to the former administrator, and in doing so, she was in breach of her employment contract.
The parties had been unable to agree on costs after WVS sought a total contribution of $29,764.
In a decision last month, the ERA ordered the woman to pay a costs contribution of $17,483.
Tracy Neal is a Nelson-based Open Justice reporter at NZME. She was previously RNZ’s regional reporter in Nelson-Marlborough and has covered general news, including court and local government for the Nelson Mail.