POL00166761
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POST OFFICE LTD CONFIDENTIAL: INVESTIGATION,
PERSONNEL
POLTD/0809/0082
Theft, Embezzlement, and Money Laundering
Name: WILLIAM JOHN QUARM
Rank: SUBPOSTMASTER Identification 1
Code:
Office: PAIBLE SPOB Branch Code 147869
Age: 66 Date of Birth:
Service: 14 YEARS 5 Date Service 28 FEBRUARY 1994
MONTHS Commenced:
Personnel Printout: At Appendix: C
Nat Ins No:
Home Address:
Suspended/Contract for 23/7/2008 ON AUTHORITY OF Brian Trotter Contracts
Services Suspended: Manager
Discipline Manager: Brian Trotter Contracts manager
Discipline Manager
The following report relates to an incident at Paible SPOB Branch code 147869 Bayhead
Shop North Uist HS6 5DS. The incident was identified by Doug Heed of Post Office Audit
team. The audit had been requested because of the risk generated by a higher than
normal level of cash being held at the Branch. This had been identified earlier in the year
during Operation Cupid but because of the remoteness of the Branch no physical
attendance had taken place. However due to the diligence of Alex McKenzie Audit officer
this Branch was once again put in the headlights. Mr McKenzie brought the matter to the
retail line’s attention which in turn led to the intervention. A copy of the email trail has
been sent to you separately; consequently the audit took place on Wednesday 23 July
2008.
Financial assets to the value of £3943.84 were physically verified compared to the amount
due to Post Office® of £44221.60.
The difference between these figures is broken down as follows:
£ 4026454 (-) Identified as a difference in cash figures
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£ 0.12 (-) Identified as a difference in stock figures
£ 13.10 (-) Shortage declared in previous balance period of present
trading period
£ 40277.76 Total shortage
There were discrepancies found in stock unit AA where the stock unit was understated
and the ATM stock unit was overstated. Cash declarations did not match the actual figures
on hand. The figures were double checked at the time and the results recorded onto a
P32 audit report. This is held by Doug Heed Audit Officer. At the time of the audit no
explanation was given by Mr Quarm. All cash and stock were removed from the Branch
and a final account produced. The results were cascaded to the contracts manager and
the Fraud Strand security team. Mr Quarm’s contract for services was precautionary
suspended on the authority of Brian Trotter Contracts Manager. A copy of the auditor's
written report has been sent to you directly
Subsequently the case was allocated to Raymond Grant for further enquiries to be made
Contact was made to arrange an interview with Mr Quarm. This interview took place at
Paible SPOB on Thursday 7th August 2008. Those present were Raymond Grant, Robert
Daily and Jonathan Bisset form Post Office Ltd and Mr William Quarm and William
Macdonald.
The interview was tape recorded and commenced at 1050hrs. Mr Quarm was cautioned
prior to any questions being asked. He requested that his friend Mr William Macdonald be
allowed to be present. Initial discussions took place about office procedures and other
staff members 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 he was asked if he was its author, he acknowledged that he was. The original letter
is held by you. Mr Quarm was then asked to comment on its content. He restated that in
autumn 2007 his private retail business was in financial difficulty, 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 used
money from the Post Office to support his private retail side of the business. He needed to
pay for 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 was not understanding the questions put to
him. He was asked if he was OK, he replied that because of the interview he had not
taken his daily medication. Raymond Grant allowed him 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 could be suspended. He advised Raymond Grant that he
was fit to continue. When asked how he removed the money from the Post Office Mr
Quarm was very hesitant to give details of how the £40277.76 came to be missing. He
gave an explanation that he would credit his Alliance and Leicester account no 1864947
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. He was shown various Bank Trading Statements and
asked if these were signed by him. He stated they were. He was then asked if they were
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an accurate reflection of the cash and stock at the Branch at the time of their production
he said they were not as he had inflated the cash on hand figure to match what the
Horizon system said he had on hand. This was done to disguise the fact that he had taken
the money. No one else knew of his actions. He knew that 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. When 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, indeed one supplier who supplied Mr Quarm with fuel for his
forecourt business had demanded payment prior to delivery. Once these 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. The
interview concluded at 1314 hours. The tape transcripts have not yet been prepared
Copies of the tapes are available for examination should they be required.
Due to the health condition of Mr Quarm and the inability to contact anyone in authority
because of the remote location of Paible SPOB it was decided by Raymond Grant
following a discussion with colleagues present that it would not be appropriate to conduct
searches of Mr Quarm’s home address. Mr Quarm gave assurances that he would forward
copies of all his bank, mortgage, and credit card accounts within one week of the
interview.
Mr Quarm has admitted that since at least January 2008 he has taken advantage of his
position as sub-postmaster to use Post Office money for his own personal use and
continued doing so until the audit on 23 July 2008.
In addition to that is the letter dated 28 July 2008 which contains a statement which says”!
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 these six months do not show any shortages. In effect
Mr Quarm is admitting to the production of False Accounts.
Mr Quarm lives on a remote Scottish island within a close knit community his status as
sub-postmaster has led to several letters coming in to support him. In his letter dated 28
July 2008 he states that his health has not been good over the last year and he cites this
in mitigation of him making improper judgements. He has self declared assets of around
£300k and has commissioned the sale of these in order to repay Post Office Ltd.
The current loss to Post Office Ltd is £40277.76.
This loss has been posted to the final account team at Chesterfield by Doug Heed on 23
July 2008.
Since the interview Mr Quarm has disclosed details and provided 12 months worth of
statements of his bank, credit card and mortgage accounts. These have still to be
examined. Mr Quarm has sent another letter dated accompanying these documents which
declares that his house and properties are on the market. Expected value £305k. These
are in the possession of Raymond Grant. In view of their volume they have not been photo
copied but can be made available for examination on request.
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This office was identified as being at risk in February 2008 under “operation cupid”
however it was deemed to be of a lower risk than other offices which were also
identified at the time. The office should have been subject to either telephone
enquiries or rescheduled for a visit later in the year but this did not happen. The
matter was again brought to the attention of the retail line in July 2008 by Alex
McKenzie Audit Officer who highlighted the level of cash holdings to his
supervisors who in turn reacted swiftly to rectify the issue of ONCH levels of risk.
This led to early intervention and identification of the offender. Mr McKenzie should
be acknowledged to having played his part.
Mr Quarm has admitted to having abused his position as Sub-postmaster and taking
advantage of this position by crediting his personal bank account without putting money in
the till. He then went on to spend this money on goods which allowed his retail business to
survive it is clear that he gained a material advantage in doing so.
This report is submitted in order that consideration is given to the facts reported and to the
future conduct of this case.
Raymond Grant
Eraud Advisor
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