I was searching the Internet last night to see if my Fraud Resource web site had moved up Google’s ranking at all and came across a link to my name concerning a job I did around 4 years ago. It is interesting to see the contents of a forensic accounting report being quoted in the press as usually the forensic accountant remains in the background in criminal prosecutions even when his or her work is critical to the proper outcome of the matter.
The article was by ComputerWeekly.com and highlighted the plight of a number of postmasters who ran 7 of the Post Office’s 14,000 or so branches throughout the UK. All of them had been convicted or accused of stealing typically £40,000 from their branch. One of the cases was mine. I am quoted as saying that the Post Office system was unlikely to be flawed otherwise you would see systematic problems through many of the 14,000 branches [inferring not just those run by postmasters who just happened to also have financial difficulties?]. I have to say that the contents of my report should not have been disclosed but hopefully no harm has been done in this case.
What the article did not say was that I had a couple of similar cases a year or two previously where I did examine the Post Office Horizon computer system in more detail. I concluded then that the system was essentially straight forward and could be considered to be an “Excel spreadsheet” with a fancy front end. There were unlikely to be such substantial and regular errors on the Post Offices part limited to only a few individual cases – however the apparently disadvantaged postmasters failed to consider the most obvious facts:
1. The deficit typically grew by a few £1000 per week over a few months.
2. The deficit was discovered by a Post Office audit that would probably be triggered by the increasing funds drawdown compared to usual.
3. The postmaster was responsible for reconciling his accounting system with the Post Office daily and weekly. Any deficiencies should be reported immediately so that they could be sorted (the Post Office would often bear a loss in this way).
4. The postmasters knowingly carried forward an increasing error by falsifying returns – failing to report the differences.
5. Whether or not the postmaster stole the money, a member of staff stole it or it was negligently overpaid regularly to customers of the branch in error – the fact remains that the postmasters were responsible for reporting problems to the Post Office and because they allowed the error/loss to mount up – they were responsible for it – either as criminals or incompetents.
In the most recent case that was being reported I had been asked by the barrister to advise the defendant in conference of my findings and as a result he pleaded guilty to false accounting – in return the prosecution dropped the theft charges for which he would I am sure have been convicted. His sentence was accordingly much lighter. 12 weeks in prison against probably a couple of years at least.
Hopefully this was a just outcome. If he had been convicted of theft he would have face confiscation proceedings for the £40,000 and given the nature of the alleged offences may even have endured the lifestyle assumptions. Clearly the postmaster had little in the way of assets and if he had defaulted on the confiscation his whole term in prison could easily have reached five or even more years!