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Alex J.
Alex J., Solicitor
Category: Law
Satisfied Customers: 3758
Experience:  Solicitors 2 years plus PQE
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We are a company and accidentally paid an incorrect recipient.

Customer Question

We are a company and accidentally paid an incorrect recipient. We contacted the recipient and requested the funds to be returned however we have since had notification that he is now bankrupt.
There was a series of amounts paid until the error was picked up, the last amount was on the 12.12.14 and we were issued with the bankruptcy notice on the 17th !
Can this be deed as theft, as he knowingly received the money then went bankrupt?
Submitted: 2 years ago.
Category: Law
Expert:  Alex J. replied 2 years ago.
Alex J. :

Hi, Thank you for your question and welcome. My name is ***** ***** I will assist you.

Alex J. :

Have Santandar made him bankrupt?

Alex J. :

How much does he owe you?

JACUSTOMER-2t8zrk2w- :

Hi, as far as i am aware he has declared himself bankrupt. i have spoken with the official receivers and they will be interviewing him later this month although when i explained the situation they were most concerned that he had not mentioned the receipt of our funds and the fact that the last payment was made on the 12th December 2014 and subsequently making himself bankrupt on the 17th December 2014. I am in the process of sending the audit trail of payments wrongly made to his account so that they can raise the point at interview. I did mention that we may go to the police and they said that decision would be down to us and would not hinder their case.

JACUSTOMER-2t8zrk2w- :

Also i explained that the payments that were made should have been to a sub contractor who is VAT registered and that an element of the payments were government money!

Alex J. :

Hi Thank you. The only thing you can do is register your interest with the Official Receiver and hope that you might receive something as an unsecured creditor.

Alex J. :

Ultimately he may be guilty of defrauding HMRC for the VAT but essentially they will just become another creditor.

Alex J. :

If you made the payment under a mistake then you would normally be entitled to sue him under the Law of Mistake for repayment of the money.

Alex J. :

The fact is he has been made bankrupt and you cannot sue him.

Alex J. :

The only way this could become a criminal investigation is if the wrong payments were systematic and he had shown deliberate of accepting and concealing them.

Alex J. :

Simply paying him by mistake one or two times is not theft.

Alex J. :

The fact that he used the money knowing it is not his may be fraudulent, but that does not mean he is prevented from going bankrupt.

Alex J. :

Are you certain he has spent the money you paid to him?

JACUSTOMER-2t8zrk2w- :

He has received a total of 5 amounts from Sept to Dec and would be fully aware that they were from our company, as we did work for him in Oct 13 whereby we made a reimbursement by bacs, from the same account that he has received the money from. We do not know how to go about checking that he has spent the money other than waiting for the outcome of his interview with the receivers, who will now tackle him over this situation.

Alex J. :

Hi, Thank you. I can only suggest you wait to see what the OR says and if your money can identified ring fenced if he has not spent. You do not have any other choice because you are barred from taking legal action against him because he is bankrupt.

Alex J. :

If following the interview he knew full well that the money should not have been spent, then I would consider a criminal complaint to the police.

Alex J. :

Only do this after the interview, otherwise the police are unlikely to pursue the claim unless they have really strong.

Alex J. :

*evidence

Alex J. :

The threshold of proving fraud is very high and therefore the police need conclusive proof in order to pursue and prosecution.