Manager stole £160,000 from credit union to fund scratch-card habit

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A CREDIT union manager has been jailed for two years after defrauding his employer of £160,000 to fund a scratch-card addiction and luxury holidays.

Over a period of four years Malcolm Elcoat “splashed the cash” to make him popular among family and friends, Newcastle Crown Court heard.

The 55-year-old was a trusted manager employed by Sunderland-based Great North 2000 Transport Credit Union since 2007. He had previously worked as a bus driver since 1990.

Prosecutor Paul Rowland said that after volunteering with the credit union, which lends money to transport workers in financial need, he was taken on full-time.

However, he soon started helping himself to money deposited as savings by members – his own former colleagues.

While employed by the credit union, which has its head office at the Wheatsheaf Depot in New Bridge Street, Monkwearmouth, Elcoat created fictitious memberships and even authorised loans in the names of his children without their knowledge.

“He had splashed the cash, he said, on scratch cards, takeaway food, holidays and clothing.” Mr Rowland said.

Elcoat eventually came clean to his employers and was sacked for gross misconduct in September 2012.

Mr Rowland said he had been able to cover up his deceit by taking out more fraudulent loans and had paid back £28,725, leaving a net loss to the credit union of £135,866.

“He was essentially robbing Peter to pay Paul,” he added.

The credit union received an insurance payout of £159,958 to cover its losses, the court heard.

Elcoat, of Norbury Grove, Walker, Newcastle, admitted three counts of fraud by abuse of position.

Peter Walsh, defending, said he had an addiction to scratch cards.

“He tells me if he had won the lottery, he would have paid the money back,” he said.

“He has betrayed the ethos and the trust of the credit union. He has betrayed the trust of those he worked with.”

Jailing Elcoat, Judge Richard Gioserano, said: “You made the decision that you were going to treat your family and your friends, and so it was that you began granting loans to yourself, and you granted loans to members of your family, and you created fictitious members so loans could be granted to them.

“This ability to spend money on other people made you feel important and powerful.

“The problem is that it wasn’t your money to spend. Your wife thought you had a pay rise in order to pay for these luxuries.

“She could, of course, not have been more wrong. You planned and carefully executed this fraud month after month, year upon year.”

A proceeds of crime hearing will be held in March.