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POST OFFICE LTD CONFIDENTIAL: INVESTIGATION, PERSONNEL
POLTD/0506/0401
OFFENCE
Theft
False Accountin'
Name: Hughie Noel Thomas
Rank: Subpostmaster Identification 1
Code:
Office: Gaerwen FAD Code 160604
Age: 58 years 10 Date of Birth:
months
Service: 11 years 4 Date Service 09/06/1994
months Commenced:
Nat Ins No:
Home Address:
Contract for Services 13" October 2005 on the authority of Emlyn
Suspended: Hughes, Service & Contracts Manager
Handed into custody: 13" October 2005 by PC 2208 Iwan Jones
At: Holyhead Police Station
To be prosecuted by: Royal Mail Group (including Post Office Ltd)
Designated Tony Utting , National Internal Crime &
Prosecution Authority: Investigation Manager
Discipline Manager: Emlyn Hughes
Discipline Manager
These papers refer to an audit shortage at Gaerwen Post Office on Thursday
13" October 2005.
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Mr Hughie Noel Thomas has been Subpostmastmaster at Gaerwen since
June 1994. The branch has 4 users listed on Horizon, these being Mr
Thomas, his wife,daughter and daughter in law.
The audit findings shown a loss of Post Office funds of £48,454.87.
At 1015 hours on Thursday 13" October 2005, I received a call from Paul
Dawkins informing me of the audit shortage at Gaerwen Post Office. I
contacted the lead auditor, Alison Edwards and was informed that the
majority of the loss was in the cash element of the balance. No loss or gain
had been declared in the previous nights cash account for week 29.
Ms Edwards stated that Mr Thomas had told her that he was having trouble
with the Horizon system and that his on line banking reports had several
transactions showing nil amounts. He
said that these transactions are for amounts of money which have been paid
out to customers but the system is not recording the value. Consequently his
accounts have been short with losses accruing to some £48,000 over a
period of time. A statement was obtained by Ms Edwards from Mr Thomas
stating that he balanced each week by adding the amount of the shortage to
the cash on hand in his branch. Mr Thomas duly signed this statement.
Accompanied by my colleague, Steve Bradshaw, we arrived at the branch at
12.42 hours. We introduced ourselves to Mr Thomas and shown him our
identity passes. I informed Mr Thomas of the reason for our involvement and
that I would discuss the situation with him once I had established the facts
with Ms Edwards. We were then informed that the office had been
transferred to the Federation Representitive; Mr Jim Evans as Interim
Subpostmaster and the branch has resumed service some 60 minutes earlier
on your authority.
Ms Edwards informed me that her colleague, Branch Auditor Mal Rannard,
who was assisting at the audit, had contacted Horizon System Helpdesk
(HSH) to obtain advice on the nil transactions. He spoke to Kevin and was
given reference number H21903612. Kevin said to obtain a report every hour
of Horizon and check the transactions. This was undertaken and contained
one nil transaction which Mr Evans remembered as a customer not
completing the transaction.
Due to the amount involved, I decided that the interview could not be
delayed. We therefore sought assistant from North Wales Police. A decision
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was taken to arrest Mr Thomas on suspicion of Theft of £48,454.87 of Post
Office Funds. The arrest was made at Gaerwen post Office at 1420 hours.
Mr Thomas was taken to Holyhead Police Station where he was booked into
custody. Mr Eilian Williams, solicitor from Tudor, Owen,Roberts & Williams,
was acting on behalf of Mr Thomas. I was informed at this point that Mr
Thomas would be answering no comment to the questions put to him during
the interview. The interview commenced at 19.52 hours.
Mr Thomas was asked for an explanation for £48,454.87 being short in his
account at the audit earlier that day. He replied at the moment I am not
commenting. No comment.
Mr Thomas stated that he did not know when the loss first started without
looking through his papers. He said he was finding it difficult to remember
what happened 2 weeks ago so cannot remember the figures from 29 weeks
ago. He said he was an old fashioned chap who was used to pen and paper
rather than a computer. Mr Thomas added that there was no paperwork
directly referring to the losses, only the cash accounts and the envelopes
containing the weekly work. Mr Thomas stated that the loss built up over a
period of time.
During the interview, Mr Thomas demonstrated that he was fully aware of his
obligations as Subpostmaster with relation to making good his losses and
gains. He stated that he has to make good all losses and can remove the
gains. Making the necessary adjustments within the week in which they
occur.
Mr Thomas was asked if the cash accounts accurately reflect the state of his
office in any particular week. He replied well I cant really comment on that.
Mr Thomas stated that he has tried to make the shortages good but did not
know which weeks he has put the money in and which he has not made the
loss good. He then declined to answer any further questions put to him
surrounding the making good of shortages. With regard to the specific loss of
over £48,000 in
week 29, Mr Thomas stated that he did not make good this shortage and
would not comment on why there was such a shortage at Gaerwen Post
Office.
During the interview, Mr Thomas was asked if the cash accounts were a true
reflection of his branch, he replied no comment. He stated that he is
responsible for completing the balance each week and he signs the cash
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accounts. Mr Thomas said the only other person who has access to the
Horizon system is his wife and that nobody else has a user identity or
password allowing access to Horizon. Mr Thomas stated that neither his son
nor daughter has ever worked behind the counter. This however is not the
case as a user Summary report taken at the time of the audit shows that his
daughter, Sian, who was subject to a previous investigation for Giro
suppression and where Mr Thomas repaid £11,000, and his Daughter in Law,
Gail both have access.
Mr Thomas stated that he secures the cash away each evening and he also
declares the ONCH figures on a nightly basis. Mr Thomas was asked if the
ONCH declared was a true record. He replied no comment. Mr Thomas was
asked if he had stolen £48,000 of Post Office funds, he replied no comment.
Mr Thomas is in the process of selling the Post Office and has a buyer. He
was asked if he was hoping to repay the money prior to the transfer. He
replied no comment. Mr Thomas stated that he was aware that a full
verification of his office would take place on the day of the transfer but
had not thought about what would happen if the money was not there. He
was asked if he was making provision to put the money back prior to the
transfer in order that the transaction could go ahead. He replied no comment.
During the interview, Mr Thomas was asked if there was any reason that he
knew of as to why he was having losses in his office. He replied that it was
due to basic mistakes on the Horizon system and not understanding it. He
added that we should check the error notices that he receives.
The latest error notice that Mr Thomas remembers if for a transaction for
£1,500, which he believes, he put through as £15.00. He was asked if the
loss or gain for this was shown on his cash account. He replied no. When
asked why a corresponding loss or gain was not declared he replied no
comment.
Mr Thomas stated that the Horizon system was installed in his office around
2001. He added at first he had some problems and complained to his retail
line manager, which I believe was yourself, after which, he received one
extra training session on a balance day. Prior to Horizon being installed, Mr
Thomas stated that he operated the Capture accounting system to aid
balancing. Mr Thomas stated that there was a previous problem with Horizon
where he had to pay half the total of a loss with the Post Office contributing
the other half. After discussing this with yourself, it seems the Post office
wrote off a loss of approx £1,200 as part of the exceptions process, in the
immediate months after migration onto Horizon.
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During the interview, Mr Thomas was asked what other complaints he has
made regarding Horizon. He stated that he has contacted the Helpline on 2
or 3 occasions regarding small matters mainly when having to reboot his
system. Mr Thomas was asked if it is his opinion that Horizon has contributed
to or is responsible for the £48,000 loss. He replied that he has got doubts
about it. When asked if there was any other explanation for the loss he stated
no.
Mr Thomas then stated that he was concerned over the number of zero
entries that was contained on his weekly on line withdrawals summary. He
stated that although the report shows
nil entries on some of the transactions, he has handed the money over the
counter to the customer and that the losses are accruing, as the amount has
not registered properly on his system. Mr Thomas agreed that the majority of
on line banking transactions did have an amount and that the zeros were not
confined to one specific group, for example all the Barclays transactions. Mr
Bradshaw offered two possibilities where nil entries will appear on the
summary. These are due to incorrect PIN numbers entered or no funds
available for withdrawal from a Post Office card account.
Mr Thomas was asked that if £48,000 has not been handed out over the
counter to customers, then would he not agree that it has to be by somebody
having access to the counter. He replied no comment. Mr Thomas was
shown the cash account for Gaerwen for week 29, week ending 12 October
2005. Mr Thomas agreed that he prepared this document and his signature is
on page 1. Mr Thomas was then asked if the cash locked up figure of
£69,534.23 was a true reflection of the cash on hand at his office last night.
He replied yes. Mr Bradshaw added that if he went to the safe last night
would he have found £69,534.23 in his safe. Mr Thomas stated no comment.
He also answered no comment when asked if he had inflated the cash and
thereby falsifying the accounts for the Post Office for that week.
Cash account weeks 28 and 27 were shown to Mr Thomas. He stated that he
had prepared both the documents and that it was his signature recorded on
the front pages. Mr Thomas then replied no comment to questions relating to
the inflating of cash and falsifying the accounts. Mr Thomas stated that he
couldn’t remember when the shortages started. He added that he did not tell
anyone about the losses, as he was too worried. He is a member of the
Federation of Subpostmasters but made no approach to them for help or
advice.
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Mr Thomas stated that it was not one large loss that had been stolen and
that he did not suspect anybody else in his family. He stated that if the losses
were proven, he would accept full responsibility for the £48,000 audit
shortage.
The interview was concluded at 20.36 hours. One tape was used which has
been transcribed and is available if required. Mr Thomas was released from
custody and bailed until 29" November 2005.
Mr Thomas has not divulged exactly how long he has been he has been
covering up the losses, only that it built up over a period of time. He has
indicated to the audit team that it was over a 12 month period.
Mr Thomas is convinced that the Horizon system is affecting his balance
results, as the On Line Banking summary contains several zero totals.
There are a number of legitimate reasons why a zero entry would be present
on the summary.
e Acustomer places their card into the pinpad terminal and enters an
incorrect PIN number.
¢ Acustomer requests a withdrawal but no funds are present in their
account
e Accustomer has previously entered an incorrect PIN on 3 separate
occasions and the card provider blocks the transaction
e The card has been reported stolen and the card has been cancelled.
e The transaction does not receive online authorisation from the card
provider even with a correct PIN entered.
If Mr Thomas has paid out funds in respect of the above transactions and a
loss occurred then this is down to incompetence and not the failings of the
Horizon system.
Fujitsu have been contacted to check the Horizon system in respect of the
comments made by Mr Thomas. The branch remains closed at this time.
Loss to Post Office Ltd £48,454.87
No failures in procedures or security have been highlighted in the
investigation of this matter.
This report is forwarded to you for the present situation to be noted in respect
of any contractual issues pending.
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Diane Matthews
Investigation Manager
25" October 2005
I Capstan House, 35 Broadway, Salford Quays, Manchester, M41 6FW.
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