Harrison Isaac Jr. was within a whisker of getting away with his $1.9 million fraud against the Government.

Having abused his position of trust as a successful young management accountant, a breakdown in security checks at the Accountant General's Department meant his crime went undetected for months.

After getting wind of the fact that the spotlight of suspicion had finally fallen on him, Isaac ? a Bermudian national ? decided to flee the country.

However, thanks to a tip-off, the Police caught him red-handed at the Airport on April 15 2004, just as he was about to fly to the States.

In his baggage was damning evidence ? handwritten notes that read "sell everything," "liquidate," and "reset password," plus a print-out from the Bank of New York account at the heart of the fraud and five secure ID cards for that bank account. "If we hadn't got information that day about his planned departure we would never have been able to find this guy, find out how he did it, or be able to prove the case. It was a very good piece of Police work," said Kulandra Ratneser, the former Acting Director of Public Prosecutions who handled the Bermuda side of the case.

The arrest of the fraudster came after an earlier sting at the Airport sent out warning signals about what he had been up to. On March 17 2004, an American national named Teketa Thompkins ? who according to legal documents was at that time Isaac's fianc?e ? was discovered bringing $30,561 US currency into Bermuda stashed in her underwear.

Thompkins, now 33, was detained and is currently awaiting trial in the States on fraud and money laundering charges, which she denies. It is alleged that some of the money stolen by Isaac ended up in the accounts of two US-based companies ? Simply Perfection and All Brand New ? of which Thompkins was president. Fifteen days after she was stopped at the Airport, an investigation into Isaac was sparked at the Accountant General's Department.

The Royal Gazette understands that he had been working as a management accountant at that department since 2000, earning upwards of $80,000, having previously worked at the Bank of Bermuda. He was on disciplinary leave due to an unrelated matter when the probe began. According to legal documents, information from one of the bank reconciliation team members in his department threw the spotlight onto his dealings with the Bank of New York account for which he had full responsibility and out of which it emerged he had been fraudulently transferring cash.

Two weeks after this, on April 15, came the swoop that caught him at the Airport ? but the case was far from sewn up at this stage. According to Mr. Ratneser, Bermuda's then-outdated laws were not up to the job of bringing him to justice.

"The issue was what offence had been committed in Bermuda. The difficulty we had was that the funds were in the United States. When we looked at the facts it appeared that our laws were inadequate. It was a terrible thing to say. Our laws had not been updated to deal with electronic transfers, which are a modern phenomenon. Secondly, the funds were taken within the US and I took the view that if we were to prosecute him (here) we would fail," he explained.

Despite these misgivings, Isaac was charged in Bermuda, with stealing and money laundering. However, Mr. Ratneser was determined to take further action, and so a high-powered delegation of local officials set off from Bermuda to the US in a bid to persuade the initially reluctant authorities in New York to take on the case.

"I told the Commissioner of Police Jonathan Smith that we needed to do something immediately so on the Sunday morning myself, the Commissioner and staff from the Accountant General's office made contact with our counterparts in Washington DC and New York and arrangements were made for us to meet the FBI (in Brooklyn)," he said. "First thing on the Monday morning we met the supervisor of the FBI in New York and sought their assistance. He, through his contacts, put us in touch with the District Attorney's office in New York. We explained to them how important it was ? that something had to be done."

Further meetings were held with Bank of New York bosses, which won their support in the investigation and meant they supplied all the information available to them. "We were able to convince the District Attorney that this was a case they should take on. This was a very small amount of money (by American standards) but both the FBI and the District Attorney's officer were extremely co-operative to secure first of all the conviction and then assist us with the recovery of the funds," said Mr. Ratneser. As soon as Isaac was charged in the USA, the Bermuda charges were withdrawn.

The law has since been updated, through the recently passed Criminal Code Amendment Act, to encompass wire-transfer fraud. The authorities are now working to recover the stolen money, of which $155,235 has been returned to the Government so far. Various assets have also been seized, including the defendant's Volkswagen car.

Mr. Ratneser said: "There are a number of investigations and actions going on in the US in order to recover the money. The government of Bermuda are also looking at remedies in order to secure some of the lost funds but it's unlikely we'll discover everything."

Meanwhile, the man behind the fraud was last night beginning a long stretch behind bars. "This man was trusted. He was supposed to be a fairly clever young man. As a Bermudian he had all the capabilities of rising to a higher level. He had everything going for him but I guess he gave in to temptation," said Mr. Ratneser.