A council worker is facing a lengthy prison sentence for embezzling more than £1 million to fund a luxury lifestyle.
Michael Paterson exploited his position as a Council Tax and Recovery team leader at Aberdeen City Council to pocket a total of £1,087,444.47.
The High Court in Edinburgh heard the 59-year-old’s criminal activity stemmed back to November 2006 and he continued scamming the local authority until September 2023.
He initially stole the cash to pay off debts but then continued to take the money for a no-expense-spared lifestyle spending the cash on Apple goods, foreign holidays and shopping.
However, he was still in debt at the time of his arrest.
Michael Paterson, 59, plead guilty to embezzling more than £1m from Aberdeen City Council over 17 years, spending the cash on electronics, holidays and eating out
Paterson used the money to fund extravagant holidays to locations including Dubai, New York, Portugal, Spain, Costa Rica and Paris, where he boasted about climbing to the top of the Eiffel Tower.
He and his partner would routinely enjoy two overseas holidays a year.
His Facebook feed is filled with images of him enjoying lavish meals and expensive drinks at each location.
They pair are also photographed at dozens of luxury hotels, restaurants and attractions across the country over the past decade, including the Balmoral Hotel and Michelin-star restaurant The Kichin in Edinburgh and Harry Potter World in London.
In one post he writes: ‘Having food and drinks. Shocker ehh. Delish’. In another he states: Having a great time so far in glorious Ibiza. The apartment complex is stunning……We are in our element’.
He also attended various concerts to see stars including Beyonce and Michael Buble as well as several theatre productions in London and Edinburgh.
Prosecutor Brian Gill KC told the court how Paterson had unsupervised authority to issue council tax refunds of up to £3,000. He could also alter payee account details without ‘authorisation or verification’ and abused the privilege.
The accused transferred unclaimed council tax overpayments into a Nationwide bank account in his name until he was caught last September.
A colleague spotted the scam after noticing that a refund of more than £2,000 had been made on a computer system using Paterson’s username.
The court heard how she confronted him about the payment and was told it was a mistake. But she reported her concerns to bosses who launched a probe into the team leader’s activities.
The investigation revealed Paterson had been paying council tax money to himself to the tune of more than £1million.
Judge David Young KC heard the council employee was sacked and police were called in.
Detectives eventually arrested Paterson in November last year.
Mr Gill told the court Paterson ‘spoke freely’ during an interview with officers and added: ‘The accused explained the state of his financial affairs. When he had started the embezzlement in 2006, he had been in debt to the sum of £20,000 through credit cards and other loans.
‘Although he had paid off his mortgage approximately 13 years previously he had always spent more than his salary and had been in a state of perpetual debts.
‘He had originally started the embezzlement because he was worried about the debts.
‘But over time he had just continued his overspending. He had spent the stolen money on technology, particularly Apple goods, foreign holidays, eating out approximately once a week, shopping and the maintenance of his flat.
‘He had not in fact cleared his debts and was still in significant debt.
‘The accused expressed his remorse saying, “I know I’ve done wrong. I regret what I’ve done”.
‘He explained that he had no intention of ever repaying any of the sums that he had taken.
‘He had just been hoping that he would not be found out.’
The story emerged after Paterson, from Aberdeen, pleaded guilty to a charge of embezzlement before Judge Young.
He was carrying out the scam as the city council sought redundancies from staff members and paused housing projects in a bid to balance books with cuts of tens of millions of pounds expected in the upcoming budget for the next financial year.
Mr Gill told the court yesterday that Paterson, who joined the council in 1988 rising through the ranks to his last role, made £35,000 per year from his position and has no dependents or previous convictions.
He was in charge of a team of 12 and had ‘unrestricted and unsupervised’ access to two computer systems with user name ‘Mike P’ stealing from his employers over a 17-year period before he was caught.
The prosecutor said the subsequent council probe revealed there had been 490 council tax refunds totalling more than £700,000 to a Nationwide bank account in the ‘accused’s name’.
The local authority also discovered that a further £376,042.85 had been made to another Bank of Scotland account belonging to Paterson before the money was transferred to the Nationwide account.
Paterson is now facing a Proceeds of Crime Action later this year in a bid to recover the stolen cash, the court heard.
Defence solicitor advocate Iain Paterson said that since his client was a first offender, he’d reserve his mitigation until a future hearing to allow for background reports.
Mr Paterson added: ‘The accused accepts imprisonment is inevitable in relation to this case and there’s no application for bail.
‘He has attended today expecting to be remanded.’
Judge Young deferred sentence on Paterson and remanded him in custody.
He added: ‘I’m going to adjourn to obtain a Criminal Justice Social Work Report on you.
‘You will understand that it is a strong possibility that a considerable custodial sentence will be imposed on you in this case.’
Following the hearing Detective Constable Tom Cameron said: ‘Paterson portrayed himself as an honest and professional individual and instead used his position to obtain a significant amount of money.
‘I hope this investigation highlights our commitment to fully investigate all reports of financial crime.’
Aberdeen City Council apologised to those affected and said it will be in touch with anyone due council tax refunds adding its financial controls and processes have since been strengthened.
Paterson will be sentenced on July 5, 2024 at the High Court in Edinburgh.
