Council worker who embezzled more than £1million over 17 years while working as a tax and recovery team leader is jailed for four years

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A former local authority worker who 'brazenly' embezzled more than £1 million from Aberdeen City Council over a 17-year period to fund a luxury lifestyle has been jailed for four years.

Michael Paterson, 59, set up an internal pathway which allowed him to fraudulently issue council tax refunds into his own bank account.

Between 2006 and 2023, Paterson, who was employed as a council tax and recovery team leader, issued 622 refunds totalling £1,087,444.

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.

Michael Paterson, 59, who embezzled more than £1 million from Aberdeen City Council over a 17-year period to fund a luxury lifestyle has been jailed for four years

Paterson was jailed for four years at the High Court in Edinburgh on Friday after pleading guilty to a charge of embezzlement last month, the Crown Office said.

He will now face confiscation proceedings to recover the money he embezzled.

It was formerly reported 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.

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Facing jail, council worker who embezzled £1m to fund luxury lifestyle

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.

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.

The 'brazen' council worker initially stole the money to pay off debts but continued to fund a luxury lifestyle that included going to various concerts, including Beyonce

'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.'

Paterson carried 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 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.

Moira Orr, who leads on homicide and major crime for the Crown Office and Procurator Fiscal Service (COPFS), said: 'This was an egregious betrayal of trust by a council worker who took advantage of his position to embezzle public money from his employers.

'Embezzlement is not a victimless crime. This was a brazen example of an individual inflicting serious financial harm on a local authority.

'Michael Paterson embezzled a significant sum of money. We take such criminality very seriously and COPFS has commenced proceedings to recover the benefit he gained from his criminal enterprise.

'This conviction should send a strong message to others involved in this kind of criminal behaviour.'

Paterson carried out the scam as Aberdeen City Council (pictured) sought redundancies from staff members and paused housing projects in a bid to balance books

Prosecutors said Paterson had unrestricted and unmonitored access to a system which allowed him to issue refunds to council taxpayers of up to £3,000.

In September last year, a colleague spotted an unusual refund conducted by 'mikep' to the value of £2,899.81 to a customer who was not entitled to one.

As a result, the council's counter fraud department was alerted, and a widespread investigation eventually revealed the scale of Paterson's crimes.

It showed that between 2019 and 2023, the total sum of £376,042.85 was paid into a specific account by user 'mikep'.

Further investigations revealed that between 2006 and 2019, a total of 490 refunds worth £711,401.61 were paid into the same account in which Paterson received his monthly council salary.

Paterson was suspended from his job in September 2023 when the matter was reported to police and was dismissed from his employment three months later.

The Crown Office said the 59-year-old will now be the subject of confiscation action under Proceeds of Crime legislation.