When Nicholas Humphery-Smith took his son Michael on as a sales manager in his memorabilia firm, he had high hopes it would help heal a family rift. Michael was unemployed and he wanted to give him a fresh start in life.

“He hadn’t had a job for maybe 15 years,” said Nicholas. “And I hadn’t seen him for quite some time. So we took him on and I said I think I can show you how to do sales.”

With a turnover of £1.5 million, business was going well for Ancestors of Dover, which specialised in designing and manufacturing products for names such as Harrods, Hamleys and English Heritage.

In early 2018 the Kent-based company planned to strike out into uncharted waters, selling branded stationery and keyrings, with Michael at the sales division’s helm. Nicholas took his son to trade shows around the world, including China. “I showed him the ropes…, how to do sourcing and buying, teaching him the promotional marketplace. I’d introduced him as my best friend, my business partner and my son. That was always how I introduced him. And we had fun together.”

But when sales started dwindling with no explanation, a bogus invoice unravelled a twisted web of deceit, cover-up and family betrayal. “He was just taking taking total advantage,” says Nicholas.

Michael Humphery-Smith, 43, was jailed on Monday for 30 months for conning his father’s firm out of £43,000. At an earlier hearing, he had denied committing fraud by abuse of position, but a jury unanimously found him guilty in August last year.

Nicholas says he always introduced Michael as his son and 'best friend' (Photo: Nicholas Humphrey-Smith)
Nicholas says he always introduced Michael as his son and ‘best friend’ (Photo: Nicholas Humphrey-Smith)

Blames father for it going to court

Nicholas and his partners couldn’t fathom why their sales were suddenly so poor and they considered pulling out of the market altogether.

Jurors at at Canterbury Crown Court heard that the reason for the downturn was that income was being secretly siphoned off by Michael, who had worked for the company for six years, after he set up a rival memorabilia firm called Burnt Toast Solutions. After Ancestors sold collectibles to customers, he would send invoices under his new company to divert payments.

The fraudster had got away with it for 21 months. But in September 2018, he slipped up and accidentally emailed a bogus invoice to Nicholas, who looked up Burnt Toast Solution on Companies House and was shocked to discover his son was listed as the director. “I was shaking,” he said. “I felt sick to my stomach.”

Nicholas went into the office that weekend, he searched his son’s computer and found “hundreds and hundreds of emails” sent under the rival firm’s name. When he confronted Michael, he said he gave him “all the excuses under the sun”.

The company, which had ran for almost 30 years, was sold in July 2020 for just £1, leaving it’s 20-strong workforce out of work. Nicholas blames the loss of so many of its customers on the combined effects of the fraud and Covid.

He says he’s been left heartbroken by the ordeal. “Somehow in his head, he feels he is justified in doing this. I’m wanting him to tell me that he’s made a mistake, and he won’t do it again. What he’s done is wrong. And even though I’m his father, he’s got to learn that you just don’t go about taking what isn’t yours. It’s caused an immense amount of mental stress and an immense financial cost.

“Would I want to see him and give them a big hug and try and get him to explain a little and forgive and forget? Yes, of course I would. But I don’t believe I’m going to be given the opportunity. I’m pretty certain he’s never gonna see me again, because he blames me for the fact that the police decided to go to court.”

The rise of invoice fraud

Nicholas appeared on the podcast series Accounts Deceivable, run by Medius, who aid organisations in fighting fraud through secure accounts payable automation and invoice monitoring.  

UK director of Medius, Paul Ellis, said: “One thing we can learn from Nicholas’s story is that fraudsters don’t necessarily operate from outside a business. Nor do they necessarily target unfamiliar organisations. In this particular case, Nicholas’s son was able to manipulate internal accounting practices and customer relations to line his own pockets.

More on Fraud

“Establishing illegitimate vendors is a common way to commit invoice fraud, simply because it’s an easy win for criminals, and because checks are rarely carried out to determine the legitimacy of invoice inbounds.

“Invoice fraud is one of the fastest-growing crimes in the UK. As fraud thrives, the focus of business leaders needs to be on suring up their accounting processes, including the use of smart technology. We are in an age where fraudsters are smarter than ever, so businesses need to be smarter – or risk suffering the same fate as Nicholas.”

Do you have a real life story? Email [email protected].

By admin