By Emma Reynolds
Last updated at 7:44 PM on 5th October 2011
Seven family members have been arrested after a council mistakenly paid £118,000 into a dementia sufferer’s bank account.
The 69-year-old widow and her relatives were arrested after South Tyneside Council failed to rectify the error it had made with paying her pension.
Northumbria Police seized cash and a car from the daughter’s house in Greenside, Gateshead, Tyne and Wear, and arrested the mother, daughter, son-in-law, two grown-up grandchildren and two others.
The council – the lead authority for the Tyne and Wear Pension fund – wrongly put £118,000 and £48,000 intended for Northumberland County Council into two random accounts, through ‘human error’.
The £48,000 payment was returned, but most of the larger sum paid to the widow, who is reported to have dementia, is believed to have been spent.
Police charged the pensioner’s daughter, son-in-law, and two grandchildren with money laundering and they appeared at South Tyneside Magistrates’ Court in April.
The Crown Prosecution Service has now discharged the case – which police said was in effect an adjournment – to allow detectives more time to gather evidence.
The widow has not been charged with any offence and the inquiry is ongoing, police said.
A Northumbria Police spokeswoman said: ‘On July 23 2010, police received a report from South Tyneside Council of the wrongful credit of an amount of cash into a pension account by the Tyne and Wear Pension Fund.
‘Following enquiries, police made seven arrests in connection with the report.’
Two men aged 23 and 28 who were arrested faced no further action, police said.
A South Tyneside Council spokesman said: ‘This case refers to an Interfund transfer payment that was paid to an incorrect bank account,’ he said.
‘This mistake was due to human error, however once it was discovered the council made attempts to retrieve the money and notified Northumbria Police.
‘The council has carried out a thorough investigation into the matter and has reviewed its financial systems.
‘As this case is the subject of an ongoing police investigation we cannot comment further.’