POL00059890
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72102/0551
IN THE BRADFORD CROWN COURT
BETWEEN:
REGINA
KHAYYAM ISHAQ
OPENING NOTE
1. This is a case about theft - the theft of £21,168.64 by the defendant
Khayyam Ishaq from the Post Office between September 2010 and
February 2011.
2. The defendant was appointed as the sub-postmaster of Birkenshaw
Post Office on the 5‘ July 2008. As you will appreciate, post masters
can handle a great deal of money and other valuable items such as
stamps, and so the Post Office require all those appointed to such
positions to undergo training to ensure that they understood how the
accounting and security systems work. This defendant was no
exception. He completed and passed his training course and went on
to receive further on site training at Birkenshaw P.O. from 4/7/08 to
7/7/08. As part of the support provided after appointment the
defendant also received visits or phone calls from post office staff.
However since taking over at Birkenshaw the defendant never once
asked for assistance with the running of the branch.
3. If there are problems then it is in the interests of the postmaster
concerned to seek help because the sub postmaster is responsible for
all losses caused through his own negligence and deficiencies due to
such losses must be made good straight away. This is really common
sense because otherwise a person who was in fact stealing from the
post office could claim it was merely a mistake and avoid
responsibility for their dishonesty. That said, the post office are
always willing to help any sub postmaster who has genuinely and
innocently got into difficulty to remedy the problem.
. In order to reduce mistakes and to promote the efficiency of post
office business, the Post Office operate a computer system that
records all transactions and can be used to ‘balance the books’, It
was designed specifically for the P.O. and has been in operation for
over 10 years. It is called ‘Horizon’.
. It is this system which, say the prosecution, demonstrates that the
defendant stole the money alleged. The defendant for his part may
claim that the computer system must be wrong — as he would have to
if he maintains he did not steal this money.
. It follows that during the course of this trial we will have to look at
how the Horizon system works and examine some of the data that
was produced during the period set out in the indictment. For the
moment I am going to provide a short summary of what is involved
but please don’t worry if at first it seems a little difficult to grasp;
evidence will be given by experts who will explain how the system
works and how it fits in with the way in which sub postmasters are
meant to operate their business.
. Horizon is a fully automated accounting system. Each P.O. is
recognized by a unique code under which all individual transactions
are recorded. The code for Birkenshaw is 163 306, and so we know
that in this case we are looking at the correct P.O.
. Each counter position has a computer terminal, a visual display unit
or screen, a keyboard, a barcode scanner, printer and pin pad. All
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clerks working at the counter have their own user ID and unique
password. The user ID is normally the first letter of their first name
and the first 2 letters of their surname, followed by 001 - so John
Smith would be JSMOO1. All clerks are required to log on to the
system using their user ID and password, so we can ID who
conducted a particular transaction. Where more than 1 person has
access to cash and stock it is referred to as a Shared Stock Unit. That
was the position in this case, but as you have heard, each person
accessing the system will be identified by his or her user name and
password, so whoever is responsible for a particular transaction can
be easily identified.
9. The system records all transactions carried out by staff at a P.O.
branch on a double entry basis, so for example when a clerk sells a
book of stamps the stock is reduced by 1 book and the cash (which is
the property of the P.O.) is increased by the value of the stamps.
10.The system records all transactions inputted by a clerk and provides
daily and weekly records enabling SPM’s and clerks to produce a
balance of cash and stock on hand. The SPM can at any stage obtain
a Horizon printout known as a ‘balance snapshot’ and this enables
him to identify whether all is in order or whether there is a deficit.
11.All P.O. branches are required to balance and complete a ‘Branch
Trading Statement’ (BTS) at the end of a Branch Trading Period (BTP).
ABTS is a signed declaration of the cash and stock held - it’s a legal
requirement - and must be kept at the branch. We will look at these
when the evidence is called.
12.It is also a mandatory requirement to make daily accurate cash
declarations on the Horizon system.
13.Now lets look at the facts of this case by reference to what we know
about the system.
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14.In August 2010 the defendant was assisted at Birkenshaw by Umir
Liaquat. It was a Shared stock Unit. His user name and password
were set up for him by the defendant and told the defendant of any
new password because he thought that what was he was meant to
do. He never knew the defendant’s password. The defendant took
responsibility for daily cash declarations and completed the weekly
balances. When he asked the defendant about balances he was
always assured they were fine. He recalls the defendant counting
money before putting it in the safe, and did the same with the stock.
He was completely unaware of any discrepancy — but as we shall see,
there was a discrepancy.
15.On the 8"" February 2011 auditors arrived at Birkenshaw to carry out
a full cash and stock audit. It revealed major discrepancies in the
stock of stamps. When checked further it emerged that a number of
sales reversals had been made at the branch. Reversals are
adjustments of stock and occur when for example through human
error it is thought that 10 stamps have been sold when in fact the
customer only bought 5. Of course because of the double entry
system employed by Horizon this mistake would soon be apparent
because the amount for cash received would be equal to that paid for
5 stamps. In any event, human errors of this sort will tend to involve
fairly small amounts. That is not the position in this case. £21,000
odd amounts to a lot of stamps.
16.By reversing out stamps you are putting the stamps back into stock,
thus increasing the number of stamps held at the branch. With the
increased stock level the amount of cash needed to balance would
reduce by the same value. And here is the problem. The selling and
reversing of stamps in this case would have created a substantial
cash surplus in the P.O. accounts — and there has been no surplus
cash declared on any of the Branch Trading Statements, begging the
question — where has that cash gone. It cannot be explained by a
surplus of stamps returned to stock, because none were found.
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17.If a balance of cash and stock took place once per week the
discrepancy would have been found. If the balance only took place
when the Branch Trading Statement was due, it would have been
found when this was produced on 15/12/10. The only sensible
explanation we submit is that the defendant was carrying out this
process of reversing in order to conceal his theft of money received for
stamps sold. He was able to conceal this deceit for a time, but that
time ended when the audit took place.
18.It may be that the defendant will try to place the blame on others for
this loss. That was certainly an assertion he tried to make when
interviewed about the offence. But examination of the data that
identified who was responsible for the transactions that give rise to
the loss revealed that save for those conducted on 24/11/10 were
conducted by KISOO1 or KISO02 - Khayyam Ishaq.
19.That being the case it may be that the defendant will accept
responsibility for the transactions but claim that there is some sort of
problem with the Horizon system. If so he has yet to produce any
evidence to demonstrate that is so. The Crown will call evidence from
the designer of the system to prove that there is no fault in the
system at all.
20.The defendant was suspended from his duties at the Birkenshaw
P.O., and a new SPM was introduced in his place, Abdullah Patel. For
more than a year he has run the P.O. and in that time there have
been no problems reported at all - no unexplained Horizon
malfunctions, no stock discrepancies requiring huge reversals, no
mysterious disappearances of cash.
21.Burden and standard.
22.This case involves the reversal of a substantial quantity of stamps
that have given rise to a significant loss. If it had been necessary to
carry out these reversals of stamps - and we say it clearly was not - it
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would have been obvious to the defendant that something was
seriously wrong:
(i) he would have had to have received them in the first place, and
he had not sold stamps in this quantity before;
(ii) the volume of that number of stamps would have been evident
in stock;
(iii) I stock was increasing but with no corresponding sales;
(iv) if he had sold them, he would have lots of money.
23.The only plausible explanation is that the defendant has cooked the
books. By increasing apparent stock holdings of stamps the amount of
cash needed to balance the books would reduce by a corresponding
amount and that amount has disappeared. The defendant we submit is
guilty of theft.
Mark Ford
Lincoln House Chambers
Manchester
24" February 2013