POL00044867
POL00044867
POST OFFICE CONFIDENTIAL: INVESTIGATION LEGAL
Juliet McFarlane
Criminal Law Team
POLTD/0506/0401 — Hughie Noel Thomas
Gaerwen Post Office — Audit Shortage £48,454.87
This purpose of this report is to provide additional information on the nil
transactions undertaken at Gaerwen Post office, for which Mr Thomas has
stated, is the reason for the audit shortage which occurred on October 13"
2005. Mr Thomas claimed this loss had started some twelve months prior to
this audit.
As requested by the Criminal Law Team, I obtained and analysed 3 periods of
Horizon data covering a twelve month period. The periods are Nov 18" to Nov
24" 2004, May 19" to May 25" 2005 and Sept 14" to Oct 12" 2005. A
schedule of these findings can be found in appendix B of this file.
Fujitsu had no concerns with the integrity of the data received from Gaerwen
Post Office, similarly, the Horizon System Helpdesk (HSH) who monitor the
working of the system have not been alerted to any hardware problems
through there off site monitoring or by any complaints raised by the staff at the
branch.
I will summarise each week in detail.
November 18" to November 24" 2004
During this period a total of 70 on line banking transactions were undertaken
with a nil value. Of this 70, 59 are standard balance enquiries. At the
conclusion of this transaction, the Horizon system will request that the
customer removes their card and a printed balance will be produced and
handed to the customer. If the customer then wishes to make a withdrawal,
they will be required to reinsert the card into the pinpad and enter their PIN
number again.
On 4 occasions, the nil transaction related to the customer requesting to
change their PIN number. In order to do this, the customer must first correctly
enter their original PIN number. The pinpad machine will then request the
customer to input their new PIN number twice.
On 3 of these occasions this was undertaken correctly. On one occasion, a
customer entered his original PIN number incorrectly, thus invalidating the
transaction and the customer having to restart the process.
POST OFFICE CONFIDENTIAL: INVESTIGATION LEGAL
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POST OFFICE CONFIDENTIAL: INVESTIGATION LEGAL
During this period a total of 4 withdrawal requests were declined, all due to the
customer incorrectly entering their PIN number. Out of the 4 declined, 3 seem
to be attributed to the same customer as all took place consecutively, by the
same clerk, Ethia Thomas, and within 1 minute 41 seconds from the first
request to the last. This time lapse is consistent with a customer having to
start the transaction each time from the beginning. If the customer makes
three failed attempts to enter their PIN number, the system will lock them out
requiring intervention from the relevant card provider.
On 3 occasions the on line facility at Gaerwen Post Office was not operational
and requests for a withdrawal of funds could not be verified from the card
provider.
May 19" to May 25" 2005
During this period a total number of 45 on line banking transactions with a nil
value were undertaken. 30 of these were for standard balance enquiries, all of
which were authorised and processed.
A total of 12 withdrawal transactions were undertaken which were declined.
The reason for this were incorrect PIN number being entered by the customer
or the card provider failing to authorise the transaction due to insufficient funds
or other concerns with the card or account.
On 3 occasions, the card provider declined a debit card payment for services.
September 14" to October 12" 2005
During this 4 week period, a total of 82 on line banking transactions with a nil
value were undertaken. 39 of these were for standard balance enquiries that
were authorised and processed.
A total of 43 withdrawals produced a nil entry. The main reason for this is due
to an incorrect PIN number entered by the customer. Other reasons were
insufficient funds, Usage violated, which means the withdrawal limit has been
exceeded, or where the customer has been timed out and taken too long to
enter their PIN number.
A schedule of the nil transactions was compiled which also includes the
following transaction undertaken. It was found that in the majority of cases, a
nil transaction was immediately followed by a further transaction of the same
POST OFFICE CONFIDENTIAL: INVESTIGATION LEGAL
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POST OFFICE CONFIDENTIAL: INVESTIGATION LEGAL
type that was authorised. For example on Nov 22™ 2004, at 11.09.07, a
customer requested a withdrawal from their Post Office Card Account (POCA).
This was declined as the incorrect PIN number had been entered. The next
transaction undertaken at the branch was at 11.09.41, again fora POCA
withdrawal. This was authorised and £89.00 was entered. These transactions
were undertaken by the same clerk, Eira Thomas, the suspect's wife, and on
the same terminal number 1.
This pattern is repeated throughout the data examined. Out of 42 declined
withdrawals, 38 (90%) were immediately followed by an authorised withdrawal
that was performed on the same terminal and by the same clerk.
It was also noted that the nil transactions were performed on both of the
terminals installed at the branch and by both Mr and Mrs Thomas.
A schedule of this information can be found in appendix B of this file.
In conclusion:
e No problems highlighted with the integrity of the data or the system
e All nil on line banking transactions examined have valid reasons for the
transactions having no value attached to them.
e The majority of declined withdrawals with nil value are immediately
followed by an authorised withdrawal for various amounts and are
undertaken by the same clerk on the same terminal.
e The nil transactions are undertaken by both Mr Thomas and Mrs
Thomas and on either terminal 1 or 2.
This report is submitted for the present position to be noted. Mr Thomas is
bailed to appear at Holyhead Police Station on 10th January 2006. Please
can this file be returned to me by this date with advice on if a further interview
is required based on the evidence or if charges are to be made at the bail or if
Mr Thomas is to be released from bail pending charges by summons at a later
date.
Diane Matthews
Investigation Manager
poe Oh Deneve ina lee DOO Feeney /
GRO
POST OFFICE CONFIDENTIAL: INVESTIGATION LEGAL
POL00044867
POL00044867
POST OFFICE CONFIDENTIAL: INVESTIGATION LEGAL
POST OFFICE CONFIDENTIAL: INVESTIGATION LEGAL