Manager jailed after using ARRS to pay fake employees over £100k

An NHS trust manager has been jailed after fraudulently claiming more than £123,000 through the additional roles reimbursement scheme (ARRS). 

Alec Gandy, a senior manager responsible for managing ARRS in PCNs at the now-dissolved Dudley Integrated Health and Care (DIHC) NHS Trust, used his position to pay two other people posing as staff hired through ARRS. 

Mr Gandy, 42, was sentenced to two years and six months’ imprisonment on 16 January after he had pleaded guilty to fraud by abuse of position. 

In 2022, he had set up Matthew Lane, 43, and Kaylee Wright, 37, as ‘ghost’ contractors, with one claiming to be a physician associate and the other an advanced paramedic. He paid them a total of £123,090 between August 2022 and May 2023. 

The court heard in a victim statement from the trust’s director of finance that the money could have been used to provide ‘additional roles within GP practices to supply more healthcare appointments for patients’, and could have paid for four nursing associates for a year.

Following an audit by DIHC that showed neither person was registered to the organisations named on their invoices, the trust notified the NHS Counter Fraud Authority (NHSCFA). 

NHSCFA found both Lane and Wright were receiving payments for these invoices into their respective bank accounts before transferring a large portion of the money back into Gandy’s personal account. All three were arrested on 9 January 2024. 

Lane told police in a voluntary interview he had approached Gandy when ‘in desperate need of money’ and Gandy said he could ‘arrange for him to be paid by the trust he was working for’ simply by submitting an invoice for payment, according to NHSCFA. 

Meanwhile, Wright claimed in an interview under caution that Gandy ‘paid her the money to prevent him from gambling it away’, but she was unable to explain ‘why she had paid large amounts back to him, almost immediately’. 

Financial analysis revealed Gandy spent more than £92,000 of the money on gambling activities and transferred £12,000 to his own businesses.

Lane was sentenced to 12 months’ imprisonment, suspended for 18 months, and 200 hours of unpaid work. Wright was sentenced to 25 days of rehabilitation activity. Both had pleaded guilty to entering into or becoming concerned in the acquisition, retention, use or control of criminal property.  

NHSCFA investigators said they would now use their powers under the Proceeds of Crime Act (POCA) 2002 to trace and recover the money. A POCA mention has been listed for 29 June 2026 at Wolverhampton Crown Court. 

The Dudley Integrated Health and Care NHS Trust was dissolved in October 2024, and its staff, property, services, and liabilities were transferred to the Black Country Healthcare NHS Foundation Trust, Dudley Group NHS Foundation Trust and Black Country ICB. 

Ben Harrison, NHSCFA’s head of operations, described the case as a ‘calculated scheme’ and ‘deliberate abuse of position’ to divert ‘significant public funds away from frontline patient care’. 

He said: ‘This outcome endorses the value of our robust and objective approach to ensuring that anyone who attempts to defraud the NHS is brought to justice. 

‘This was a calculated scheme that diverted significant public funds away from frontline patient care. Our investigation, with the support of West Mercia Police, uncovered a deliberate abuse of position, with Gandy exploiting his senior role to manipulate NHS payment systems for personal gain.’

In 2023, a Labour Party analysis found the NHS had lost almost £7.5 billion to fraud over the previous six years.