Former insurance company employee sentenced after stealing nearly £140k through fake insurance claims

A man from North Tyneside has been sentenced for submitting false insurance claims through his employer and misusing his access to the company’s system in order to pocket the money.

Damian McMenzie, 36, of Weetslade Crescent, Dudley, NE23, received a two year sentence suspended for two years for Fraud by Abuse of Position on 25 January 2021, at Newcastle Crown Court. The former Household Claims Negotiator abused his position as a trusted employee at an insurance company to defraud the company of £136,425 over a four-year period.

Detective Constable Deborah O’Loughlin-Whitby, from the City of London Police’s Insurance Fraud Enforcement Department, said:

“McMenzie faced financial difficulties because of a gambling addiction and should have sought help, rather than defrauding his employer and deceiving fellow colleagues who had trusted him.

“The outcome at court for this case reasserts that insurance fraud will not be tolerated by law enforcement, or the judiciary system, no matter the reason behind the crime.”

McMenzie started working for the insurer in 2011, managing reports of household damage from clients, as well as agreeing settlements and processing payments. In this role, McMenzie was able to settle claims in line with the company’s procedures, authorising payments up to £10,000 without seeking further authority.

Having quickly earned a reputation as a trustworthy, hard-working member of staff, McMenzie was assigned extra responsibilities such as deputising for the team leader and providing cheque approval authority. Unbeknownst to his colleagues, he was in fact exploiting this relationship for his own benefit.

McMenzie acted by reviewing the system to find genuine claims that were approaching the end of their lifespan. Once he had located a suitable claim, McMenzie would add a further payment directed to his personal bank account.

In order to process payments higher than his personal £10,000 limit, McMenzie later confirmed in an interview that he gained access to his supervisors’ passwords by looking over their shoulder whilst they logged into the system.

The offences were discovered by colleagues when a customer reported that they had not received the payments associated with their claim on the system. A review was conducted into the computer system, which uncovered over fifty payments that were all made to the same bank account in McMenzie’s name.

The case was referred to IFED by the company for investigation. During an interview with IFED officers, McMenzie admitted to the offences in full, explaining that the money was used to clear ‘payday’ loans which he had taken out to cover losses from gambling.