Timothy Barker from Harrow – who worked at Lloyd’s brokerage Besso Ltd as an insurance broker – was found guilty of siphoning off his clients’ cash in order to trick his employers into paying him a higher salary then he had really earned.

The 51-year-old fraudster received an extra £270,000 in salary, commission and bonuses over a four year period, but claimed that the money on his work account was the profit from selling financial insurance products.

Barker’s deception was exposed when Besso discovered it owed money to one of his clients, and after an internal investigation he was arrested in 2006.

Bosses from the brokerage contacted Barker while he was on holiday in Cyprus, and he admitted to the deceit, telling them it had “got out of hand and spiralled.”

The court heard how he had previously been sentenced to 18 months in prison in the mid-nineties after stealing £35,000 from a travel agency where he worked. 

Besso also came under fire in 2006 after their failure to notify the FSA of the managerial appointment of an employee who later committed fraud.

It later transpired that the fraudulent activity could have been prevented if the regulator had received an approval application as the employee’s previous convictions would have been detected. Besso were fined £20,000 as a result.

Besso refused to confirm if the individual involved in the case was Timothy Barker.

Margaret Cole, the FSA Director for Enforcement commented on the situation in 2006, and said: “This case visibly illustrates the potential risks that can arise where firms fail to follow the correct regulatory procedures. It is very important for firms to submit applications for approval at the right time and in the proper way.

“If Besso had acted correctly the current alleged fraud could perhaps have been avoided. Other firms should take heed."

The FSA acknowledged the prompt and decisive remedial action that was taken by Besso on discovery of the misconduct, and commended the firm for its co-operation with the FSA throughout. If it weren’t for this then the penalty fee would have been higher.