Treasurer defrauded pre-school of up to £44,000 leaving account with ONLY 58p, court hears

A treasurer fleeced a pre-school charity of up to £44,000 in a long-running scam branded a ‘complete nightmare’ and a ‘terrible, damaging ordeal’, a court heard.

Mother-of-two Gemma Waterhouse left the trustees and staff of Leven Pre-school, in Beverley, feeling ‘very angry, betrayed and deceived’ and the fraud had caused serious damage to its reputation.

She left a bank deposit account belonging to the pre-school with just 58p in it but covered up the losses and even forged the manager’s signature, Hull Crown Court heard.

Waterhouse, 39, of Bewholme, near Hornsea, admitted fraud by transferring money from a charity bank account between January 2012 and January 2019. 

She also admitted falsifying year-end financial reports and bank statements.

The case was adjourned as lawyers for Waterhouse disputed the figure of £44,000 put forward by prosecutors and said the actual figure taken from the accounts was closer to £28,000. 

The judge warned the 39-year-old that she should prepare for ‘the very real risk that [she] might get locked up’ when the case came back before the court for sentencing.

Stephen Welch, prosecuting, said that Waterhouse was on Leven Preschool’s committee and worked as the voluntary treasurer.

Pre-school treasurer and mother-of-two Gemma Waterhouse (pictured) is facing prison time after admitting defrauding a pre-school charity of up to £44,000, Hull Crown Court was told

A letter from Her Majesty’s Revenue and Customs was received in January 2019 showing a £16,235 debt over failure to make Pay As You Earn and staff National Insurance payments since April 2012.

It came as a surprise to manager Dawn Whiting as payslips showed that payments and deductions had been made.

She saw Waterhouse at a garden centre and the treasurer said: ‘It’s a complete mess.’

Mrs Whiting said: ‘I know it’s a complete mess. Can you let me know what has been going on?’

Waterhouse replied: ‘Everything. This. My life. At home. Everything.’

Mr Welch told the court: ‘She said that she had been struggling for years, didn’t know how to handle things, she didn’t know how to ask for help and that things had got worse and worse.’

The fraud had been going on for more than five years. She had joined the committee in September 2011.

Waterhouse said of the breach of trust: ‘I know and that makes me feel worse. I have to put it right. I want to try and put it right but I need time. It’s all gone. There’s nothing left.’

Staff at Leven Pre-school (pictured) near Hull described the fallout of Waterhouse's offending as 'a complete nightmare' and a 'terrible ordeal' as they say they struggled to stay open

Staff at Leven Pre-school (pictured) near Hull described the fallout of Waterhouse’s offending as ‘a complete nightmare’ and a ‘terrible ordeal’ as they say they struggled to stay open

A total of £89,743 had been paid into accounts belonging to Waterhouse or her husband’s business.

A total of £51,869 was returned. The sum of £9,808 was found to have been legitimate payments to Waterhouse’s husband for work done at the school.

The prosecution claimed that the total actual loss was £44,067.

‘The defendant has expended considerable efforts to conceal her wrongdoing,’ said Mr Welch.

This included changing addresses on correspondence from the Pre-School to her home without the knowledge of the other trustees or staff.

She changed committee meeting minutes over the pre-school’s bank account to require only one signature and also falsified Dawn Whiting’s signature.

Rachel Scott, mitigating, said that Waterhouse has no previous convictions.

She had two children, aged 12 and 11, and worked making bespoke gifts to sell online.

Waterhouse (pictured), who was bailed until sentencing, was warned she should prepare for 'the very real risk' she could be jailed for the offences she admitted at Hull Crown Court

Waterhouse (pictured), who was bailed until sentencing, was warned she should prepare for ‘the very real risk’ she could be jailed for the offences she admitted at Hull Crown Court

Waterhouse regretted her actions as it affected the trust that the public had in a charitable organisation.

‘She is very remorseful for the fact that she has dented that trust,’ said Miss Scott, adding: ‘It started with a little bit of borrowing to pay for her bills.’

Waterhouse was not working at the time and intended to return the money.

She felt that she could not talk to her husband about it and ‘dug herself a hole’ by taking money from the charity but being unable to put it back. 

The false accounting meant that only 58p was left in the deposit account but Waterhouse covered this up. 

Waterhouse was adamant that the total loss to the pre-school was £28,139 – not the prosecution’s net figure of £44,067.

Judge David Tremberg said: ‘There is a dispute over the amount of the net loss.’

The court needed an accurate figure before Waterhouse could be sentenced and the case was adjourned for further investigations, probably including an accountant.

The case was adjourned to January so lawyers could investigate the actual sum that was taken

The case was adjourned to January so lawyers could investigate the actual sum that was taken

Judge Tremberg told Waterhouse: ‘It’s regrettable that we find ourselves in this situation but, having said that, there appears at least to be significant daylight between what the prosecution say you did and what you admit you did and it’s daylight that needs to be sorted out before the court proceeds to sentence.

‘You must prepare yourself for the very real risk that you might get locked up when this finally proceeds to sentence.’

The case was adjourned until January and Waterhouse was allowed bail.

After the hearing, the five people in court connected with the pre-school declined to comment at this stage but confirmed that it was still operating.

Leven Pre-School caters for children aged two to five from Leven and surrounding areas. 

Manager Dawn Whiting said: ‘For the charity as a whole, when this first came to light, there was a real fear that the pre-school may have to close.

‘Although we tried to keep the investigation in-house, in a small village this was very difficult.

‘Some children who had made initial contact to bring their children to Leven Pre-School chose to go elsewhere and we were worried that this would escalate. It was a very stressful time for all and this continues. 

‘When this theft came to light, the committee had no alternative but to cancel one of our largest annual fundraisers, further impacting on our current funds. 

‘Personally and, I know, other members of staff and the committee feel very much let down and angry by Gemma Waterhouse’s actions.

‘She involved herself in many of the pre-school’s activities and fund-raising events and had become a good friend and confidante, who I and staff turned to both professionally and personally for advice. 

‘It is only through dedicated staff and working together and the support of the current committee that we have come through this terrible, damaging ordeal.

‘The last 21 months has been a complete nightmare not only for me but for many people involved with the pre-school, who feel very angry, betrayed and deceived.’

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