Schools Cheque Fraud Alert

Published: 12 July 2023

We have been altered by the National Anti Fraud Network (NAFN) of attempted frauds in Schools.

A NAFN member reported two incidents of cheque fraud targeting schools within their City. School A sent a legitimate cheque by post (box) to a known organisation for a sum under £200 on 31 May 2023 at 15:30. It appears it was intercepted in the postal system and details (signatures and cheque number) copied to create a fake cheque for a significantly higher value of almost £80k. The funds were made payable to an unknown company and in spite of the bank’s safeguards, the payment was taken from the school bank account. The bank has since confirmed the company details (verbally) as SYEDEM CATERING LTD or SYEDM CATERING LTD and the associated bank account is now closed. There is currently no evidence to suggest the company named is in any way involved in the crime.

This initially appeared to be an isolated incident, however a second school with no direct connection to School A, has also been targeted. This has been reported to Royal Mail.

School B sent a legitimate cheque by post (box) to a known organisation for just over £1k on 26 May 2023 at 16:30. Again, the details of the original cheque have been used to create two fake cheques; the first payable to SBM CONSTRUCTION for almost £60k was cashed and a second cheque for over £70k attempted to be cashed the same day but was stopped by the bank. Once again, there is no evidence to suggest the company named is involved.

The total value of the loss is these cases is in excess of £137,000, not including the prevented loss of £70k. The member authority has stressed the importance of undertaking regular bank reconciliations as promptly as possible. Digital access to your bank account means the account can be checked regularly for irregularities rather than waiting for a monthly statement. Please also be wary of undertaking large cheque runs just before finishing for school holidays when bank accounts may not be checked.

In the event that your school falls victim to cheque fraud, we would advise the following:

• Contact your bank with the details and ask them to hold payment of further cheques.
• Contact the police, as your bank will likely require a crime reference number.
• Contact your internal Counter Fraud Team or Internal Audit Team (details below).
• Avoid envelopes, which may show a cheque is inside, for example window envelopes.

If you would like to report any instances of the above information being used in similar fraud attempts, please email:

Tracey Thomas, Senior Counter Fraud Investigator: tracey.thomas@derby.gov.uk
Hannah McDonald, Group Auditor: hannah.mcdonald@centralmidlandsaudit.co.uk

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