Carpetbaggers

A yacht manager was instructed by the owners to settle the fees of an artisan carpet maker who had renewed the interior carpet of a yacht. The owners liked the work and ordered some extra carpets.

The manager then received two invoices from the supplier – for the first job and the second. They registered them in their system and paid them out of the owner’s funds. A day later a different person within the yacht manager’s office asked the yacht’s captain if they should proceed to pay the supplier for the work done. The captain authorised the payment. The yacht manager paid the supplier’s invoices again but with a slightly different reference number. As a consequence of the erroneous double entry of the invoice in the system, the supplier received the funds twice.

By the time the yacht manager realised the issue, the supplier had used the money to pay off some debts and did not have the funds to repay the owners. Furthermore, he then fell ill and was hospitalised. It became clear that the extra funds remitted would not be returned. Owners put pressure on the yacht manager to credit the additional money back to them.

The yacht manager had to pay the sum of EUR 90,000 back to the owners in respect of the loss they suffered. The yacht manager was reimbursed by ITIC.