Edinburgh Fringe 2015: Organisers fall victim to 'sophisticated £220,000 fraud campaign'

Swindle emerges less than two weeks before start of world's largest art festival

Chippendales promote their Edinburgh Fringe show on top of Calton hill (Getty)

The organisers of the Edinburgh Festival Fringe have fallen victim to an alleged “sophisticated fraud campaign”, saying £220,000 was taken over eight years. The swindle emerged less than two weeks before the world’s largest arts festival is due to start.

The Edinburgh Festival Fringe Society called in the police earlier this year after allegedly discovering a series of “complex financial disbursements” made by an employee, who no longer works for the organisation. The society said it subsequently recovered all of the losses.

Kath Mainland, chief executive of the Festival Society, said: “We have been a victim of a sophisticated fraud campaign conducted by one individual in a position of responsibility over an extended period of time.”

Over the course of eight years, the former employee, whose name has not been released due to the ongoing police investigation, is alleged to have taken out about £26,000 a year, less than one per cent of the Fringe Society’s annual turnover.

Members of the public, walk past a street entertainer on the Royal Mile (Getty)

The fraud was discovered after suspicions were raised in January and an internal investigation was launched. A spokesman for the Fringe Society said: “The investigation confirmed our suspicions and we reported it to the police in March.”

He said it was a “sophisticated case of embezzlement that used multiple different techniques to remove the money”.

Subsequently, the society called in independent forensic accountants Aver to review the process and to ensure the lost funds were identified and recovered. Ms Mainland said the incident would have no bearing on the event that gets underway on Friday next week.

Appropriate measures have been taken to beef up its financial processes. Ms Mainland said: “I am satisfied that not much more could have been done to prevent us falling victim to such a deliberate and sophisticated crime.”

“The disappointment at having identified the crime is certainly alleviated by our success in recovering the funds swiftly and being able to move on,” she added.

A street entertainer performs on Edinburgh's Royal Mile (Getty)

It took a couple of months to recover the funds, the spokesman revealed, adding: “The important message was our own systems unearthed it and we’ve had the full amount returned.”

A spokeswoman for the organisation said: “Police Scotland is carrying out an investigation into a possible fraud following a complaint from the Edinburgh Festival Fringe Society.”