Duffus Hall Embezzler

A Moray woman who campaigned for more than a year to raise money to rebuild her village hall has offered to sell her house to avoid prison after admitting she pocketed £15,000 of public funds.

Kathleen Fraser, 44, of Hopeman Road, Duffus, admitted embezzling money from Duffus Public Hall funds while she was acting as treasurer of the Duffus Hall committee between June, 1997, and September, 2001.

The married mother-of-three appeared at Elgin Sheriff Court yesterday for sentencing.

Sheriff Ian Cameron had previously deferred sentencing to allow time for Fraser to secure money to repay the stolen amount. But she had managed to collect only £250, so sentencing was deferred further, until January 19.

If she fails to come up with a repayment scheme, she could face a prison sentence, Sheriff Cameron warned.

Defence agent Simon Booker-Milburn told the court that his client was in consultation with an Aberdeen mortgage company and hoped to buy her council house at a discounted rate, with the intention of selling it and using the profit to pay for restitution.

But according to a spokeswoman for Moray Council, local authority tenants who buy their property at a discounted rate do not benefit from the discount if they sell the property immediately.

She said: "The council is entitled to recover that discount if the house is sold within a three-year period."

Under the 1987 Housing Scotland Act, council tenants can buy their properties at a discount that varies according to the property and tenant.

But the council can withdraw the discount either partially or entirely if the tenant sells the house within three years.

If sold within the first year of the purchase, 100 of the discount is withdrawn, the spokeswoman said. This drops to 33 if sold in the third year.

Duffus Hall was burned to the ground when it was engulfed by a fire caused by an electrical fault in June, 1997.

Shortly afterwards, the Duffus Hall committee held a meeting and elected Fraser the treasurer.

She was featured in several articles in the Press and Journal in the year that followed as she appealed for help from the community to raise funds for a new £331,000 centre.

The project was funded primarily by a combination of insurance payouts and a £165,000 grant from the Millennium 21st Century Halls project. The rest came from local fundraising efforts.

Fiscal Sharon Ralph told the court that Fraser handled six Bank of Scotland accounts in her role as treasurer and all correspondence regarding the accounts was forwarded to her.

Any cheques issued from those accounts were to be countersigned by two other members of the village hall committee, Miss Ralph said. But Fraser falsified the signatures on cheques exchanged for cash and subsequently used for "every-day expenses".

The fraud first came to light in December, 2001, when a debt-collection agency contacted another member of the committee over a bill for £1,100 that had been outstanding since 1999.

Further investigation revealed that five of the six bank accounts under Fraser's control were overdrawn.

The accounts were frozen, an audit was carried out and it was discovered that a significant amount of money was unaccounted for.

Fraser was questioned in May, 2002, and eventually admitted the offence, but seemed surprised at the total amount, the court heard.

Miss Ralph told the court: "She said she had no real experience dealing with such accounts in the past and only volunteered (for the job of treasurer) because no one else wanted it."

Mr Booker-Milburn said: "She does appreciate the seriousness and significance of the matter.

"Her financial position is not good, but it seems one possibility would be to buy her council house, mortgage it and obtain funds."

Sheriff Cameron said his primary concern was repayment of the £15,000.

He allowed Fraser to remain free on bail on condition that she return in eight weeks with a proposal on how she intends to repay the missing cash.

Members of the village hall committee declined to comment yesterday, saying they were acting on legal advice.