Dishonesty - A load of rubbish

Presented facts (names changed to preserve confidentiality).

My client company, Waste-is-us Ltd, buys and sells waste materials. As suppliers of waste do not generally have facilities to enable the weight of waste in each skip to be measured, the company itself weighs the waste it collects and issues self-billing invoices.

Skips of waste are weighed on the lorry as they arrive at the company's premises, and the known weight of the lorry with an empty skip is deducted from this gross weight to arrive at the net weight of waste purchased.

However the lorry weight is based on a full tank of petrol and the heaviest empty skip the company owns. In practice this means that the waste purchased is always under-recorded and under-billed.

Last year the total weight of waste sold by Waste-is-us Ltd comfortably exceeded the total purchased according to the self-billing invoices, which confirms the systematic under-recording of purchase weights.

Is this reportable to SOCA?

MLRO Support Ltd - Our Opinion:

You do not indicate whether the company is aware of the under-recording of purchases, or how weights sold have been ascertained.

The key to this problem is dishonesty.

If there is an innocent systematic error which causes purchased weights to be under-recorded then the matter is not reportable.

On the other hand, if there is deliberate or reckless deception of suppliers leading to under-payments then the matter is reportable. The matter may well fall within the scope of section 15, Theft Act 1968.

If, as seems likely, the company is aware of the under-recording of purchase weights, and has taken no steps to remedy the errors, the matter should be reported.

Depending on the circumstances, dishonesty may also be inferred from the company's use of a different system to calculate the weight of waste it sells.