ABTA has accused suspended head of legal services
Riccardo Nardi of unlawfully diverting funds over at least nine years.
The association has lodged a civil claim in the High
Court to recover losses, thought to be about £1.23 million, which it says were
“unlawfully diverted” from ABTA over a period covering at least January 1995 to
2004.
The allegation comes as an embarrassment to the
organisation, which has carried out three independent audits of its claims
department – in 1996, 1997 and 2003 – which failed to spot any fraud.
Chief executive Ian Reynolds defended the checks,
saying they were in place to monitor the criteria and paperwork in the process
and not the authenticity of claims.
“Such audits are not designed to check the credibility
of claimants,” he said. “However, just like all insurance companies, we want to
stamp out fraudulent claims and we are seeking independent advice on what
measures to take.”
In the claim, Newman Street says Nardi “caused money
belonging to ABTA to be unlawfully diverted away from ABTA to the benefit of
himself and/or his associates”.
ABTA is claiming damages for reasons including
fraudulent misrepresentation, conspiracy, breach of fiduciary duty and knowing
receipt of money paid in breach of trust.
The bank accounts of both Nardi and his wife Samantha
have been frozen while the evidence is assessed.
The £1.23 million represents about 5% of ABTA’s total
claims payout of £26 million from 1995 to 2004. Trevor Sears, a partner with
ABTA’s lawyers, Davenport Lyons, said the case could be concluded in “weeks”.
Nardi joined ABTA in 1990 as legal adviser and became
head of legal services in 1996. A prominent part of his role has been to lead
the association’s anti-fraud campaign, notably announcing a crackdown on conmen
fleecing the trade through deliberate business failures last year. At the time,
Nardi said: “My brief is simple: stop fraud, protect consumers and travel
agents and put those responsible in harm’s way.”
Nardi is now suspended and
ABTA legal adviser Simon Bunce is acting head of legal affairs.