Luton Borough Council: Criminal group stole £1.1m missing from account

A crime group stole £1.1m that disappeared from a council bank account, an inquiry has found.

The money was supposed to help pay for a new education block at Mark Rutherford School in Bedford and was being held by Luton Council.

It went missing in April 2020.

A National Investigation Service (Natis) inquiry found a "highly sophisticated and organised criminal group" was responsible, but the money had not yet been traced.

Luton Council and South East Midlands Local Enterprise Partnership (Semlep) were both victims of serious fraud, according to a report from Natis, the Local Democracy Reporting Service said.

The Semlep grant, intended for the school, was being held by the council, which was Semlep's accountable body.

The council said the Natis report concluded the theft was "perpetrated by a highly sophisticated and organised criminal group, with ties to money laundering and cyber-enabled crime".

It found a user account of a Semlep employee was "illegally compromised by a criminal entity, which then contacted the council to advise of a change of bank account details for the school where the payment was due to be made".

The report made a number of recommendations to both the council and Semlep to further strengthen their internal processes, and these had been implemented.

The council's chief executive Robin Porter said: "I'm pleased the report has been finalised and evidence presented.

"The findings confirm that it wasn't the council's system which was compromised and we're pleased that the investigation clears this up.

"As a result of this incident, we've introduced higher levels of risk management to further strengthen our payment policies and ensure extra checks are made when we're sent requests such as change of bank details."

In a statement about the investigation, the council said: "Despite extensive inquiries and identifying several potential suspects, Natis has been unable to recover any of the funds.

"Its investigation continues and is likely to be long-term and worldwide."

The school, a state-funded secondary with sixth form, has since received the funding that it was meant to get.

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