An Aberdeen City Council officer who swindled more than £1 million from the local authority will pay back just under half of it, ending court action to recover his ill-gotten gains.
Michael Paterson siphoned off £1,087,444.47 from his employer by exploiting his position of trust during a 17-year deception that started in November 2006.
When the 60-year-old was finally caught out, the jet-setter had already lived extravagantly for years, splurging on exotic holidays, staying in five-star hotels, and enjoying big-name music concerts.
Paterson blamed his greed on worries over financial debts, but was still in the red when he was jailed for four years at the High Court in Edinburgh in July last year.
It came six months after The Press and Journal exclusively revealed that Paterson, a now-sacked council tax and recovery team leader, was under investigation.
Today, the judge Lord Summers heard that Paterson has since sold a home to raise cash, partly to compensate his former employer with £104,630.33.
The city authority had already recovered £417,523 from Paterson’s pension fund.
Despite only earning £35,000 per year, shameless Mike Paterson had regularly shown off his expensive habits to friends and family during his crime spree, boasting about his lavish lifestyle in sun-soaked social media posts.
In reality, his gallivanting was funded by over 600 fake council tax refunds he paid himself.
After Paterson was locked up, prosecutors brought a proceeds of crime action against him.
At the High Court in Edinburgh on Monday, the court recorded Paterson’s total criminal gain as £1,184,000 and made a confiscation order of £167,698.71.
The court ordered Aberdeen City Council to receive £104,630.33 from the money recovered during confiscation proceedings.
Both the Crown and Paterson’s defence representation agreed to bring the matter to an end.
He added that Paterson was able to perpetrate the crime because he was working in positions of trust, 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 said.
He told Paterson he would have faced a sentence of six years imprisonment had he not entered an early guilty plea.
Paterson made 622 false refunds to himself
Paterson, formerly of Great Western Road, Aberdeen, was a first-time offender when he previously appeared in court to admit to the embezzlement.
The court heard that he started working for the local authority in 1988.
Paterson became a £35,000 a year council tax and recovery team leader, supervising a team of 12 public servants.
The team administered council tax recovery and refunds to taxpayers.
Prosecutor Brian Gill KC said: “Over a period of 17 years until he was discovered in September 2023, the accused exploited his position with the council to embezzle funds from it.
“He did so by using his access to the council’s computer systems to wrongfully pay council funds into his own bank account, purportedly as refunds of council tax to taxpayers.”
Mr Gill explained: “[Paterson] had unsupervised authority to issue refunds of up to £3,000 and to change payee account details without authorisation or verification.
“A refund would fall to be made where a taxpayer had left the relevant property and had not claimed a resulting overpayment of council tax.”
In total, Paterson made 622 false refunds to himself.
They went undetected as he had “unrestricted and unmonitored access” to two computer systems used by the local authority.
Vigilant coworker caught on to Paterson’s scheme and was his undoing
Paterson tried to cover his tracks by getting money paid into a second account in 2019 after he learned that the council was introducing counter-corruption measures.
They would alert bosses to payments made to an employee’s bank account.
He previously paid funds into a building society account into which his salary was also paid.
However, in September 2023, a colleague noticed a transaction she thought was odd.
The coworker spotted a suspicious refund of £2899.81 to a customer who was not entitled to one.
She was troubled by the explanation offered by Paterson and reported her concerns to a senior colleague.
The authority’s counter fraud department was alerted and the police were then called in.
‘I know I’ve done wrong. I regret what I’ve done’
Paterson was suspended on full pay before being dismissed in December 2023.
Mr Gill said that when police interviewed Paterson, he made a full admission.
He said: “The accused expressed his remorse, saying, ‘I know I’ve done wrong. I regret what I’ve done’.”
The prosecutor added: “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 the crime spree, he was in approximately £20,000 of debt with credit and store cards and other loans.
Mr Gill told the court: “Although he had paid off his mortgage approximately 13 years previously, he had always spent more than his salary and had been in a state of perpetual debt.”
Greedy thief was ‘still in significant debt’ despite £1 million fraud
Paterson instigated the fraud because of the money worries, however, he continued overspending the ill-gotten gains deposited in his accounts.
“He had not in fact cleared his debts and was still in significant debt,” Mr Gill said.
During the time Paterson was committing the offence, the city council was faced with having to make millions of pounds in savings.
Defence solicitor advocate Iain Paterson KC told the court: “He is thoroughly ashamed of his actions and obviously, as a consequence, was dismissed from the council.
“He was generous to family and friends and clearly was living well outside of his situation as a consequence of the money he was embezzling from the council,” the lawyer added.
“He accepts what he did was totally wrong,” Mr Paterson said.
He told the court that Paterson’s only asset was a two-bedroom flat in Aberdeen, which he faced being taken from him under the proceeds of crime action.
Sineidin Corrins, Depute Procurator Fiscal for Specialist Casework at the Crown Office and Procurator Fiscal Service (COPFS), warned that Paterson may be required to pay further compensation in the future.
She explained: “Confiscation orders have ongoing financial consequences, meaning we can seek to recover further assets from this individual in the future to ensure he pays back the full amount.”
Read more:
Exotic holidays, five-star hotels and Beyonce: Aberdeen embezzler’s life of luxury as he stole £1m
We reveal the jet-setting lifestyle Mike Paterson boasted about online.
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