Council chief who stole £1million and used the cash to fund lavish holidays and luxury goods jailed for four years

• e-mail

A council employee who stole more than £1 million from his cash-strapped local authority and frittered it on foreign holidays, meals out and luxury goods has been jailed.

Michael Paterson exploited his position as a council tax and recovery team leader to siphon off the cash over a 17-year period. He was only caught after an eagle-eyed colleague queried a suspicious transaction, sparking an investigation.

The 59-year-old claimed he began taking money from Aberdeen City Council in November 2006 to pay off debts but used it to fund a lavish lifestyle, including buying trips abroad and Apple technology, and maintaining his flat. 

By the time he was caught in September 2023, he had embezzled a total of £1,087,444.47 and was still in debt.

Jailing Paterson for four years at the High Court in Edinburgh, trial judge David Young KC told him: ‘This is unquestionably a serious matter and it must therefore bring serious consequences for you today.’ 

Michael Paterson embezzled more than £1million over a 17 year period from Aberdeen City Council

The judge pointed out that the accused was able to perpetrate the crime because he was appointed to positions of trust by his employer, which he repeatedly breached over many years.

‘I am told today you spent money on family and friends but also there was significant spending on yourself.’

The judge told the first offender, who had admitted embezzlement at a previous hearing, that he would have faced a sentence of six years imprisonment but for his early guilty plea.

Paterson, of Aberdeen, started working for the local authority in 1988, and rose through the ranks to become council tax and recovery team leader, earning a salary of £35,000 and overseeing a team of 12.

Advocate depute Brian Gill KC, prosecuting, said Paterson enjoyed ‘unrestricted and unmonitored access’ to two computer systems used by the local 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 he could benefit in situations where a householder had left a property and had not reclaimed for overpayment of their council tax. 

In all, he made 622 false refunds to himself while his crime went undetected.

Mr Gill said Paterson tried to cover his tracks by getting money paid into a second account in 2019 after he learnt the council was introducing anti-corruption measures that would alert it to payments made to an employee’s bank account. 

He previously had funds paid into a building society account into which his salary also went.

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 and a desperate Paterson pretended he had been conducting tests and had accidentally put the refund through the live system instead of the test system.

It was only when she reported her concerns to bosses, who launched a probe into Paterson’s activities, that the scale of his crimes emerged. 

He was suspended on full pay before being dismissed in December last year.

When police interviewed Paterson he made a full confession, admitting: ‘I know I’ve done wrong. I regret what I’ve done.’

Mr Gill said: ‘He explained that he had had no intention of ever repaying any of the sums that he had taken. He had just been hoping that he would not be found out.’

Paterson told officers that when he began his crime spree he had debts of around £20,000 on credit and store cards and other loans. 

The court head he remained ‘in significant debt’ at the time of his arrest.

During the time Paterson was stealing significant sums, the city council was faced with having to make millions of pounds in savings.

Defence solicitor advocate Iain Paterson said: ‘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.’

He said his client’s only asset was a two bedroom flat in Aberdeen which he faced forfeiting under a proceeds of crime action due to be brought by the Crown.

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.’