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guernsey states defrauded

31 Jul 12

An official in Guernseys government has resigned, in the wake of the discovery last week that fraudsters had tricked his department into paying out £2.6m by pretending to be a major contractor.

An official in Guernseys government has resigned, in the wake of the discovery last week that fraudsters had tricked his department into paying out £2.6m by pretending to be a major contractor.

The official who resigned was Dale Holmes, who headed up the States of Guernsey’s Treasury and Resources Department.

The BBC quoted Guernsey Treasury and Resources minister Gavin St Pier as saying "no pressure was put on Mr Holmes, but it was no doubt a decision made due to the fraud”.

"What he’s done is a courageous thing to do, he is a man of integrity and honour… I’ve got a huge amount of admiration for him making that decision," St Pier added.

Holmes had been a States of Guernsey civil servant for 34 years, according to a statement issued by the Guernsey Policy Council. Mike Brown, chief executive of the States, said in the statement that Holmes "has spent his entire working life serving the community of Guernsey" and praised him for his “honesty, integrity, dedication and professionalism…throughout his time in public service."

‘Fraudulent theft’

In a press statement  last week, St Pier reported that there had been “a fraudulent theft of £2.6m of taxpayers’ money from the States of Guernsey”, which is "currently the subject of an ongoing police investigation”.

He could not give full details of the incident, given that the investigations were ongoing, St Pier said, although he said it was his understanding “that an arrest has been made in the UK in relation to this incident, and a small percentage of funds have been recovered”.

“I am not at this stage able to comment on the recovery of the remainder of the funds,” he added.

In his statement, St Pier noted that the Treasury and Resources Department had been notified on 10 July “that a legitimate payment of £2.6m – which was contractually due to Lagan Construction in respect of the Guernsey Airport runway refurbishment contract – was paid to a third party and not Lagan Construction. This resulted from the Department receiving a fraudulent letter that appeared to be from Lagan Construction that advised a change in their bank account. These instructions appeared to be genuine.

“The Department made the change to its systems, and when due, the monthly payment was fraudulently paid to the third party’s account and not Lagan Construction.”

"As this is now a criminal investigation, I am limited in what I can say, but I will take this opportunity to assure taxpayers and the people of Guernsey that my Department is cooperating fully with both the police inquiries and the external review.” 

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