POL00166685
POL00166685
Royal Mail Group
Statement of Witness
Surname: _. Forenames: RAYMOND.
Maiden Name: N/A Known As or Alias:
Address (Home):
Telephone:
Address (Business/ care of): AS ABOVE
Telephone:
Date and place of birth:
Occupation: _ INVESTIGATION MANAGER
Witness states:
I have been employed by Royal Mail Group in various roles for around 26 years. My current
position in which I have been employed is that as Investigation Manager. One of the main aspects
of this role is to conduct enquiries on behalf of Post Office Ltd into fraud or suspected fraud
against the business by either internal or external persons.
This statement relates to the discovery of a large shortage of cash at Paible Sub Post Office
Branch (SPOB) Branch code 147869. Post Office Ltd Cash Management Team highlighted the
Overnight Cash Holdings at Paible PO, were fluctuating between a few hundred to tens of
thousands pounds. E-mails were sent to various functions within Post Office Ltd and a decision
was made to conduct an Audit at Paible PO. Cash Management also provide a schedule of
Overnight Cash Holdings from the period 01/04/08 to 08/07/08.
Production Copy of E-mail trail.
Production Schedule Paible Overnight Cash Holdings 01/04/08 - 08/07/08.
Paible SPOB is located within Bayhead Shop, Paible, Lochmaddy, North Uist, HS6 5DS. The
Bayhead shop is a retail shop, selling groceries etc. The Subpostmaster for this office was 66 year
Signature of witness: __ Signature witnessed by:
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Royal Mail Group
Statement of Witness
old William John QUARM who had been in post since 28" February 1994. Mr QUARM was
assisted by Sheila ACFORD.
William QUARM was contracted by Post Office Ltd to provide services to customers on their behalf.
In addition to stating the working standards the contract states that under no circumstances is the
sub-postmaster allowed to use Post Office money for their own personal use. There is also a
section of the contract which states that the sub-postmaster is responsible for the safekeeping of I
all cash and stock. I
The Post Office uses a computer based accounting system named HORIZON that records
transactions carried out by the staff at Post Office branches. For example when a clerk sells a
book of stamps the stock is reduced by one book of stamps and the cash on hand is increased by
the value of the stamps.
The Post Office accounting week runs from a Thursday to a Wednesday, these are known as a
Balancing Period. The branch has to produce a Trading Statement at the end of each four or five
week balancing period (dependant on the number of Wednesday's in a month). This Trading
Statement is a record of all transactions made over the period. A transaction is any record of when
cash, stock (stamps) or vouchers (giro cheques) for example have been handed over the Post Office
counter.
When the sub postmaster is completing his Trading Statement, they will obtain a balance snapshot
from the Horizon terminal. This snapshot indicates to the sub postmaster the amount of cash and
stock held, total receipts and total payments made. The sub postmaster will then physically count
the cash and stock to ensure that it is correct.
When the balance is completed any identified shortage in the account has to be made good by the
sub postmaster at the time of the balance. Similarly if there is a surplus in the accounts the sub
postmaster is allowed to remove this surplus. In either circumstance, the sub postmaster should
declare the actual shortage or surplus in the accounts.
On Wednesday 23" July 2008 Post Office Ltd Field Advisors Doug HEED and Alex MCKENZIE
Signature of witness: _.. Signature witnessed by:
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Royal Mail isa trading name of Royal Mail Group plc. Registered number 4138203. Registered in England and Wales. Registered office: 148 Old Street, LONDON, EC1V 9H.
POL00166685
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Royal Mail Group
Statement of Witness I
carried out an audit at Paible PO. Field Advisors are employed to examine Post Office assets.
The audit revealed a shortage in the branch of £40,277.76. A breakdown of the audit result and
details of the audit findings are as follows: I
£ 4026454 (-)_ Identified asa difference in cash figures
£ 0.12 (-) Identified as a difference in stock figures i
£ 13.10 (-) Shortage declared in previous balance period of present trading I
period I
£ _40277.76 Total shortage
Production Paible Audit Report 23° July 2008 Witness HEED
Accordingly the Fraud Strand security team were advised of the audit result and the case was
allocated to myself to conduct further enquiries.
On Thursday 7th August 2008 Raymond GRANT interviewed William John QUARM, Subpostmaster
Paible PO. The interview took place in Paible Post Office, Bayhead Shop, Paible, Lochmaddy, HS6
5DS. There Mr QUARM was interviewed on tape and under caution in accordance with Scots Law.
In accordance with Post Office rules Mr QUARM was offered the opportunity to have a friend
present during interview, and opted for William MACDONALD, Brother in Law. Also present were
Robert DAILY Fraud Investigator and Jonathan BISSET Post Office Ltd, Senior Security Analyst.
The interview commenced at 10.50 hours and concluded at 13.14 hours. The tapes were sealed
with master tape seals numbers 071081, 071078 and 071082.
Production Master Tape seal 071081 Interview William John QUARM 07° August 2008
Production Transcript of Taped Interview 4 William John QUARM 07" August 2008
Production Master Tape seal 071078 Interview William John QUARM 07° August 2008
Production Transcript of Taped Interview 2 William John QUARM 07° August 2008
Signature of witness: a uu, Signature witnessed by:
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Royal Mail isa trading name of Royal Mail Group ple. Registered number 4138203. Registered in England and Wales, Registered office: 148 Old Street, LONDON, ECAV 9H
POL00166685
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Royal Mail Group
Statement of Witness
Production Master Tape seal 071082 Interview William John QUARM 07" August 2008
Production Transcript of Taped Interview 3 William John QUARM 07" August 2008
It was explained to Mr QUARM that Jonathan BISSET was present on a training capacity. Mr
QUARM stated he had no objection to Mr Bisset’s attendance.
Initial discussions took place about office procedures and other staff member's responsibilities,
during which Mr QUARM stated that he was the sole person who was responsible for producing
daily reports, cash declarations and producing the Branch Trading statements.
Mr QUARM was shown a copy of a letter dated 28" July 2008 which he had sent to Brian Trotter
Contracts Manager. After being allowed to read this letter Mr QUARM acknowledged that he was
its author.
Production Letter 28/07/08
Mr QUARM was then asked to comment on its content. He restated that in autumn 2007 his
private retail business was in financial difficulty, and he decided to sell some property assets that
he had. Due to planning delays the sale was not going though as fast as he would like and in
January 2008 he approached the bank with a view of borrowing money on anticipation of the sales
going ahead. He was given agreement in principle from the bank. Further delays meant his
financial position had worsened, Mr QUARM then said he used money from the Post Office to
support his private retail side of the business. Mr QUARM said he needed to pay for the stock for
his grocery business from his main supplier, who by this time was insisting on a weekly payment of
around £4200.
During the course of this discussion Mr QUARM appeared to be in a bit of a daze, and appeared
Signature of witness: Signature witnessed by:
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Royal Mail Group
Statement of Witness
not to be understanding the questions put to him. When asked if he was okay, he replied that
because of the interview he had not taken his daily medication. Mr QUARM was allowed time to do
this and confirmed that he was in a fit state to continue. Mr QUARM acknowledged that he was
fine and wished to continue. It was explained to Mr QUARM that should he begin to feel unwell,
then he should just say so and the interview would be suspended. He advised that he was fit to
continue.
When asked how he removed the money from the Post Office Mr QUARM was at first very hesitant
to give details of how the £40277.76 came to be missing. He then gave an explanation that he
would credit his Alliance and Leicester account no 186 4947 with sums of money equivalent to
around £4200 every week without putting the cash in the till. He would then use this money by
means of drawing on this account by cheque payments to pay his suppliers.
Mr QUARM was shown various Branch Trading Statements and a schedule of the Branch Trading
Statements. Mr QUARM confirmed the statements were signed by him. He was then asked if they
were an accurate reflection of the cash and stock at the Branch at the time of their production. Mr
QUARM said they were not as he had inflated the cash on hand figure, to match what the Horizon
system said he had on hand. He said this was done to disguise the fact that he had taken the
money. Mr QUARM said no one else knew of his actions.
Production Branch Trading Statement, Trading period 01, 21/03/07 - 25/04/07
Production Branch Trading Statement, Trading period 02, 25/04/07 - 23/05/07
Production Branch Trading Statement, Trading period 03, 23/05/07 - 20/06/07
Production Branch Trading Statement, Trading period 04, 20/06/07 - 25/07/07
Production Branch Trading Statement, Trading period 05, 25/07/07 - 22/08/07
Production Branch Trading Statement, Trading period 06, 22/08/07 - 20/09/07
Production Branch Trading Statement, Trading period 07, 20/09/07 - 24/10/07
Signature of witness: i _ Signature witnessed by:
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Royal Mailis a trading name of Royal Mail Group ple. Registered number 4138203. Registered in England and Wales. Registered office: 148 Old Street, LONDON, EC1V 9HO
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Royal Mail Group
Statement of Witness
Production Branch Trading Statement, Trading period 08, 24/10/07 - 22/11/07
Production Branch Trading Statement, Trading period 09, 22/11/07 - 19/12/07
Production Branch Trading Statement, Trading period 10, 19/12/07 - 23/01/08
Production Branch Trading Staternent, Trading period 12, 20/02/08 - 26/03/08
Production Branch Trading Statement, Trading period 01, 26/03/08 - 30/04/08
Production Branch Trading Statement, Trading period 02, 30/04/08 - 29/05/08
Production Schedule Branch Trading Statements
Mr QUARM said he did not have permission to use Post Office money for his personal use. He
stated that he always intended to replace the cash on completion of the sale of his property. Mr
QUARM was asked if he was in a position to repay the missing cash. He stated that although the
loan from the bank had now been received, he had decided to use this money to pay other
creditors, as they had been pushing him for payments. One supplier who supplied Mr QUARM with
fuel for his forecourt business had demanded payment prior to delivery. Once the creditors had
been paid there was insufficient funds left to pay back the money stolen from the Post Office.
Mr QUARM pointed out that he had had several mini strokes last summer and wished this to be
taken into consideration. Mr QUARM also stated that it was his intention to sell another piece of
property in order to provide funds to repay Post Office Ltd.
Mr QUARM has admitted that since at least January 2008 he has taken advantage of his position
as Subpostmaster to use Post Office money for his own personal use and continued doing so until
the audit on 23 July 2008.
Mr QUARM declared he has assets of around £300k. He said it was intention to commission the
sale of these in order to repay Post Office Ltd. To date no monies have been repaid. The loss to
Post Office Ltd currently stands at £40,277.76.
Signature of witness: Signature witnessed by:
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Royal Mail isa trading name of Royat Mail Group ple. Registered number 4438203, Registered in England and Wales, Registered office: 148 Old Street, LONDON, EC1V 9HO
POL00166685
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Royal Mail Group
Statement of Witness
There are Post Office documents available for productions which support the charges of theft and
embezzlement. In addition there is the letter from Mr QUARM dated 28" July 2008, where he
states, “I had no right to use Post Office money to prop up my business, I have lived for the past six
months in day to day expectation of a Bank Loan to make good any Post Office shortage”. The
Branch Trading statements for this six month period do not show any shortages. In effect Mr
QUARM admitted to the production of False Accounts.
Since the interview Mr QUARM has disclosed financial details.
e Alliance & Leicester Bank statements, Account Nod
¢ Bank of Scotland statements Preference Account N
Preference Account N
¢ Bank of Scotland Credit Card statements Account No.
Royal Bank of Scotland statements Account No!
e Royal Bank of Scotland Business Term Loan
¢ Royal Bank of Scotland Short Term Loan
e Royal Bank of Scotland Mortgage
¢ Mortgage Endowment
e Capital Bank
© P60 End of Year Certificate 2007-08 Anne QUARM
The balances were noted on the following accounts.
Alliance & Leicester Accoun'
Bank of Scotland Preference Account
¢ Bank of Scotland Preference Account
¢ Bank of Scotland Credit Card Account
e Royal Bank of Scotland Accoun
Signature of witness: _.. Signature witnessed by:
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Royal Mail isa trading name of Royat Mal Group ple. Registered number 4438203, Registered in England and Wales. Registered office: 148 Old Street, LONDON, EC1V 9H.
POL00166685
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Royal Mail Group
Statement of Witness
It can seen from the above Mr QUARM has a substantial debt.
Production Alliance & Leicester Bank statements, Account Nol
Production Bank of Scotland statements Preference Account N
Production Bank of Scotland statements Preference Account N
Production Bank of Scotland Credit Card statements Account No.
Production Royal Bank of Scotland statements Account No,
Production Royal Bank of Scotland Business Term Loan
Production Royal Bank of Scotland Short Term Loan
Production Royal Bank of Scotland Mortgage
Production Mortgage Endowment
Production Capital Bank Details
Production P60 End of Year Certificate 2007-08 Anne QUARM
Mr QUARM sent a covering letter dated 12/08/08 with the financial documents, declaring his
house and properties are on the market. Expected value
Production Letter 12/08/08
To summarise Mr QUARM has admitted to using Post Office money to maintain his business. He
has done so by crediting his personal bank account without putting the money due in the till. He
then used the money to purchase goods and pay bills to allow his retail business to survive. To
disguise his actions, he has by his own admissions inflated the cash in Paible Post Office at the
period ends to show a balance, thus producing false accounts. Mr QUARM has in effect admitted
to the theft and embezzlement of Forty Thousand, Two Hundred and Seventy Seven pounds and
Seventy Six pence (£40,277.76), of monies belonging to the Post Office. He has stated he has
Signature of witness: oe _. Signature witnessed by:
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Royal Mail isa trading name of Royal Mail Group plc. Registered number 4438203. Registered in England and Wales, Registered office: 148 Old Street. LONDON, EC1V 9H
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Royal Mail Group I
Statement of Witness I
done since at least January 2008. Mr QUARM has made no attempt to blame anyone other than
himself for his actions. The Post Office® is a fully Government owned business and is seeking full
compensation in this matter. I can identify the accused.
Statement noted by:
_.. Job title:
Business/Department:
On (day, date & time):
At (Location):
Also present:
Statement read and signed by witness (Yes/No):
Signature of witness: _ Signature witnessed by:
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Royal Mail isa trading name of Royal Mail Group ple. Registered number 4138203, Registered in England and Wales, Registered office: 148 Old Street, LONDON, EC1V 9HO