A gambling-addicted council worker who swindled her employer out of almost half a million pounds while in charge of housing benefit payments has been spared jail.

Joella Preston fraudulently received £493,487 by setting up fake claims in the names of people she knew, such as neighbours and friends, over a nine-year period.

With the money having then been paid directly into her bank account and that of her unwitting husband, she blew it via online slot games, a court heard.

It was not until the 44-year-old, who was employed by Dartford council but also worked for Sevenoaks where their shared revenue and benefits service is based, was on sick leave in 2023 that her deceit — and double life — came to light.

As well as her family being in the dark about both her addiction and criminal activity, it was also revealed in the resulting investigation that she had, in fact, gambled as much as £776,938 and recouped £355,709 in winnings.

But despite facing several years behind bars after pleading guilty to fraud by abuse of position, Preston was told by a judge this week that a community-based punishment was “by far the best way” to prevent any risk of reoffending.

The merciful decision was met with tears from the defendant in the dock at Maidstone Crown Court and cheers from those sitting in the public gallery in support.

Prosecutor Rose Slowe said Preston, whose married name is Waghorne, had been employed by Dartford council since 2001 and, by 2018, was promoted to senior benefits leader working in partnership with Sevenoaks council.

Ironically, her role not only required her to set up and manage housing benefit claims but also to be alert to fraudulent applications, comply with relevant policies in relation to any suspect claims and to liaise with fraud officers.

However, the court heard that between September 2014 and July 2023, Preston created a total of 15 false claims of her own, and used her knowledge of the system to cover her tracks.

As well as averting detection by suppressing entitlement letters being sent out to those whose details she had used, she was aware that checks would focus on new claims when the amount was above a £2,000 threshold and was able to by-pass end-of-year checks by ensuring payments were made manually rather than automatically.

But it was while she was absent from work with anxiety that her financial cheating was finally discovered, explained Ms Slowe.

“The council carried out an audit of listed benefit claimants, including one who had been in receipt of benefits for years and who was asked to provide evidence of his rent,” she told the court.

“But he explained he had never received benefits and owned his own mortgaged property.”

Preston, of Higham Road, Cliffe, had even given her husband’s name as being the landlord, the court was told, and later lied to him about the reason for why she had been suspended from work.

Following her arrest in February last year, she stressed to police that her husband was “completely ignorant” of her offending and that she had gone “to great pains” to hide what she was doing, added the prosecutor.

Preston, who earnt £38,000 a year and described her arrest as “a relief”, was also said to have control over joint finances.

Her lawyer, Christopher Johnston, told the court that the defendant may have “fallen prey” to her addiction after being left “with a residual feeling that something was missing in her life” as a result of being estranged from her mother and unable to conceive.

Expressing her “genuine and deep” remorse for her behaviour, as well as her commitment to “making amends”, he highlighted how Preston had since undertaken a six-week residential course to tackle her addiction and regularly attends sessions with both Gamble Aware and Gamblers Anonymous.

She has also repaid about £3,900 of the money she swindled and faces losing her matrimonial home under confiscation proceedings at a future date.

A large number of character references written for the sentencing hearing on Monday (October 13) also spoke of her “compassion, integrity and honesty”, while a psychiatric report detailed the extent of what was said to be a diagnosed and severe gambling disorder.

Urging the court to show leniency, Mr Johnston said his client was “disgusted” by her actions and had told him she would “never be that person again”.

Passing sentence, Recorder John Brooke-Smith told Preston the consequences of her offending went beyond the “substantial” sum of money which had been diverted away from funds intended for genuine claims.

He said her once-trusting colleagues would have to deal with the “emotional challenges” of her betrayal, and the council was faced with the impact on its reputation that the fraud went undetected for so long, as well as the additional cost of its investigation.

But, highlighting what he called “unusually powerful and persuasive” mitigating factors, including Preston’s early guilty plea, her mental state and previous good character, Recorder Brooke-Smith said he was able to suspend a two-year jail term for two years.

In explaining his decision and remarking that sending her to prison could “stop and potentially reverse” the progress she had made, he added: “I have no doubt it will be seen as the court failing to protect victims, failing to send out deterrent messages.

“So, I stress again, it is because the mitigating factors are wholly exceptional and unusually powerful and persuasive.

“I am convinced that it is by far and away the best way to steer you away from any relapse.”

As part of the suspended sentence order, Preston must complete 200 hours of unpaid work and 20 rehabilitation activity requirements.

Since the issue came to light, both councils say they have reviewed their processes and have put in place more stringent procedures to ensure such actions cannot be repeated.

In a joint statement from both, a spokesman said: “We regret to confirm that a long-serving employee, who was in a position of trust, used their detailed knowledge to abuse the system and commit fraud.

“The fraud, involving DWP funding, was uncovered by council staff following routine checks of benefit claims.

“Police were informed straight away, and the two councils have done everything possible to assist with the investigations.

“We are grateful for the work undertaken by Kent Police and the Crown Prosecution Service in bringing this case to a conclusion.”