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REGINA
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PETER HOLMES
EXPERT ACCOUNTANT’S REPORT
OF PETER M SMITH BSc (Hons) FCA MEWI
28 JULY 2009
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PETER HOLMES (Defendant)
CONTENTS OF THE EXPERT ACCOUNTANT’S REPORT
OF PETER M SMITH BSc (Hons) FCA MEWI
1. INTRODUCTION...
2. DEPOSITS MADE TO BARCLAYS BANK ACCOUNT NO. 4517491
3. EXPERT’S DECLARATION ..
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PETER HOLMES (Defendant)
SCHEDULE OF EXHIBITS REFERRED TO IN THE EXPERT
ACCOUNTANT’S REPORT OF PETER M SMITH BSc (Hons) FCA MEWI
1 Peter M Smith — Summary of Professional Qualifications & Experience
2 Indictment
3 Accounts of Mrs M Holmes, trading as I for the
year ended 5 April 2008
4A to4C Calculation of Gross Takings of Mrs Holmes’ business for the period 1
August 2007 to 19 September 2008
5A to 5D Accounting schedules provided by Mr Ingram in respect of Mrs Holmes’
business takings
6 Summary of deposits to Mrs Holmes’ Alliance & Leicester business
account between 1 August 2007 to 19 September 2008
7 Summary of deposits to Mr & Mrs Holmes’ Barclays Bank account
between 1 August 2007 to 19 September 2008
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uantis
Chartered Accountants
REPORT TO THE NEWCASTLE UPON TYNE CROWN COURT
IN THE MATTER OF:
REGINA
-v-
PETER HOLMES (Defendant)
1. INTRODUCTION
Author
Ll My name is Peter Maurice Smith.
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13 Newgate Street
Morpeth
Northumberland
NE61 TAL
Tel: 01670 511 999
Fax: 01670 511 333
www. forensic-accountants.co.uk
I am a Fellow of the Institute of Chartered
Accountants in England and Wales and Managing Director of Quantis, Chartered
Accountants. This report has been prepared by myself. The opinions given in this
report are my own. I understand that my duty is to the Court and I have complied
with that duty. I attach a summary of my professional qualifications and experience
at Exhibit 1.
( ; Background and my instructions
1.2
I am instructed on behalf of the Defendant, Mr Peter Holmes (‘Mr Holmes’), to
assist in examining the accounting evidence in respect of monies allegedly stolen by
him from the Post Office amounting to £46,049.
held this position since 1 March 1995.
1.4
auditors from the Post Office, a shortfall of £46,049 was identified.
Fe wSTITUTE OF IFA. THE NATIONAL NETWORK
CHARTERED esr om
Accountants G2 eaten
IN ENGLAND & WALES: i [EXPERT FINANCIAL WITNESSES.
Director: Peter M Smith Fca mewn ase (Hone) I Associate: Victoria E Smith aca 34 ton)
Registered Office: Quants Limited I 13 Newgate Street I Morpeth I Northumberland I NEG1 AL Company Nor 5173758
Mr Holmes was the Post Office Manager at the Jesmond Sub-Post Office. He had
On 18 September 2008, following an audit of the Jesmond Sub-Post Office by
ew
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1.5 Given this shortfall, Mr Holmes was questioned about transactions amounting to
£48,000 which had passed through the Barclays Bank account, held in joint names
with his wife, over the period 21 July 2007 to 21 August 2008.
Mr Holmes
contended that these sums related to the takings from his wife’s business and that he
had till receipts for these.
1.6 I have sought to establish whether or not sums in the region of £48,000, which were
paid into this Barclays Bank account, relate to the takings from his wife’s business. I
consider this within Section 2 of my report.
Summary of my findings
1.7. My review of the accounting records maintained by Mrs Holmes’ business has led
me to the view that the monies deposited into the Barclays Bank joint account of Mr
& Mrs Holmes, amounting to £43,605 during the period 1 August 2007 to 19
September 2008, derive from the takings of Mrs Holmes’ business, as opposed to
being monies allegedly stolen by Mr Holmes from the Post Office.
1.8 This view is strengthened by the fact that regular deposits have continued to be made
into this account after the date that Mr Holmes ceased working as the Manager of the
Jesmond Sub-Post Office.
Scope and limitations
1.9 This report has been prepared solely for use in relation to the matter of Regina -v- Mr
Peter Holmes, and I understand that it will be made available to the Defendant,
Counsel, the Prosecution and the Court. In all other respects, this report is
confidential. It should not be used, reproduced, or circulated for any other purpose,
in whole or in part, without the prior written consent of Quantis. Neither I, nor
Quantis, accept any responsibility to third parties for breaches of this obligation, or
for any opinions expressed or information included within this report.
NEA, THE NETWORK OF
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The information presented in my report has not been the subject of any independent
audit verification by Quantis or myself. My report should not be construed as
expressing opinions on matters of law, which are outside my area of expertise and for
the Court to determine, although it necessarily reflects my understanding thereof.
In preparing some of the Exhibits to this report I have used Microsoft Excel and
minimal arithmetical differences may occur within the program as a result of
roundings.
Independence
Prior to accepting instructions to act in this matter, I made reasonable enquiries to
identify any actual or potential conflicts of interest in connection with the parties
concerned. These enquiries did not identify any matters preventing me from acting
in this matter.
Documents provided
In addition to the documentation attached as Exhibits to the report, I have been
provided with access to the following documentation:
. Horizon transactions from 21 August 2007 to 17 September 2008;
. Interview transcript with Mr Holmes dated 19 September 2008;
. Audit notes of Post Office Investigators;
. Alliance & Leicester Bank statements for Mrs M Holmes’ business trading as
HR {0m I August 2007 to 19 September 2008;
° Barclays Bank statements for Mr & Mrs Holmes from 1 August 2007 to 30
March 2009,
. Accounting records of Mrs M Holmes’ business trading a:
Several of these documents were photocopies. I have not verified or carried out an
audit of these documents.
Regina -v- Peter Holmes
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1.15 The opinions I have expressed within this report are necessarily based on the
documents and explanations provided to me. Should further information become
available, then I reserve the right to modify my opinions where necessary and
acknowledge that I have a duty to do so.
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2. DEPOSITS MADE TO BARCLAYS BANK ACCOUNT NO. 4517490
Given the alleged theft by Mr Holmes, amounting to £46,049, auditors from the Post
i)
Office sought an explanation from Mr Holmes regarding approximately £48,000 of
deposits made into his Barclays Bank account, which he held jointly with his wife.
2.2 It was claimed by Mr Holmes that these deposits related to the takings from his
wife’s business. I have sought to establish whether or not this is the case.
Mrs Holmes’ business
2.3. Mrs Holmes operates a cake shop and also provides cake making tuition. The
business trades as I The business’ accounts for the year
ended 5 April 2008 are attached at Exhibit 3. They indicate that the business is both
profitable and solvent. The business employs the services of Mr EE of
Tax Assist Direct, to prepare its annual accounts from the accounting records that are
maintained by Mr Holmes, on behalf of his wife.
2.4 On 22 July 2009, I met Mr I at his offices and discussed the preparation of the
business accounts with him. It was his view that takings from Mrs Holmes’ shop
were paid into the jointly held Barclays Bank account. However, when preparing the
accounts of the business, he relied upon the accounting records prepared by Mr
Holmes and did not check the personal bank statements of Mr & Mrs Holmes for the
purposes of establishing the business’ takings.
2.5 Therefore, I have carried out a separate exercise to establish whether the deposits
paid into Mr & Mrs Holmes’ Barclays Bank account relate to the takings of Mrs
Holmes’ business. I have considered the period from 1 August 2007 to 19 September
2008, being the period of the Indictment.
Gross takings from 1 August 2007 to 19 September 2008
2.6 From the accounting records of the business provided to me by Mr EE at Exhibit
4A I have calculated that the gross takings of the business (inclusive of VAT)
amounted to £137,423 during the period 1 August 2007 to 19 September 2008.
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Bankings made to Alliance & Leicester business account
WITNESSES
2.7. Mrs Holmes’ business operates a bank account with Alliance & Leicester. From the
bank statements provided for this account, at Exhibit 6, I have established that the
deposits paid into this account during the period 1 August 2007 to 19 September
2008 amounted to £70,239.
Bankings made to Barclays joint personal account
2.8 At Exhibit 7, I have identified that during the period 1 August 2007 to 19 September
2008, Mr & Mrs Holmes’ joint account received deposits amounting to £43,605,
excluding Mr Holmes’ wages from the Post Office of £16,591 and a loan for £8,100.
Cash expenditure of Mrs Holmes’ business
2.9 In order to understand the extent of cash banked by Mrs Holmes’ business from the
gross takings it receives, I asked Mr Holmes whether any monies were deducted from
the cash takings prior to them being banked. I was advised by Mr Holmes that the
employees of the business were paid in cash at the end of each week. The wages for
these individuals are recorded within the accounts of the business. During the year
ended 5 April 2008, the wages paid to employees amounted to £18,075 (Exhibit 3).
2.10 Therefore, on a pro-rata basis, I estimate that the cash wages paid during the period 1
August 2007 to 19 September 2008, would be £20,551 !.
1 £18,075 x 454 / 565 days
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2.11 Having considered the accounting records of Mrs Holmes’ business, I set out below
my summary of the funds that would be available for banking within the Barclays
joint account, after the deduction of funds paid to the Alliance & Leicester account
and the cash payments made to employees:
Period 1-Aug-07 to 19-Sep-08 Ref £
Total gross takings of Mrs Holmes’ business 2.6 137,423
Less:
Banked at Alliance & Leicester 2.7 (70,239)
Cash wages paid 2.10 (20,551)
Cash available for banking into Barclays Bank joint account 46,633
Actual cash banked into Barclays Bank joint account
43,605
2.12 My calculations set out above illustrate that there was sufficient cash available from
Mrs Holmes’ business to explain the deposits made into Mr & Mrs Holmes’ joint
bank account during the period 1 August 2007 to 19 September 2008.
2.13 In addition, I have noted that three deposit slips were found at Mr Holmes’ house
following a search by Post Office Investigators. These were for deposits made into
the Barclays joint account of Mr & Mrs Holmes. Each of these deposits are included
within the above totals and are capable of being derived from Mrs Holmes’ business
takings.
Deposits made after 19 September 2008
2.14 When carrying out my review of Mr & Mrs Holmes’ Barclays Bank account, I
identified that cash continued to be deposited on a regular basis into this account
after Mr Holmes ceased his duties as the Manager of Jesmond Sub-Post Office. The
pattern of regular cash deposits into this account continues from September 2008 up
until 30 March 2009 (being the last statement provided to me).
Regpromrronmsc, Regina —v- Peter Holmes
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2.15 Therefore, in my opinion, the continuation of regular deposits into the Barclays
account provides further evidence that such deposits derive from Mrs Holmes’
business.
Conclusion
2.16 My review of the accounting records maintained by Mrs Holmes’ business has led
me to the view that the deposits into the Barclays joint account of Mr & Mrs Holmes,
amounting to £43,605 during the period 1 August 2007 to 19 September 2008, derive
from the takings of Mrs Holmes’ business, as opposed to the monies allegedly stolen
by Mr Holmes from the Post Office.
2.17 This view is strengthened by the fact that regular deposits have continued to be made
into this account after the date that Mr Holmes ceased working as the Post Office
Manager at Jesmond Sub-Post Office.
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3. EXPERT’S DECLARATION
I, Peter Maurice Smith, declare that:
i. [understand that my duty in providing written reports and giving evidence is to help
the Court, and that this duty overrides any obligation to the party by whom I am
engaged or the person who has paid or is liable to pay me. I confirm that I have
complied, and will continue to comply, with my duty;
ii. I have endeavoured to include in my report those matters which I have knowledge of
or of which I have been made aware, that might adversely affect the validity of my
opinion. I have clearly stated any qualifications to my opinion;
ili. I have indicated the sources of all information I have used;
iv. I have not, without forming an independent view, included or excluded anything
which has been suggested to me by others (including my instructing lawyers);
v. I will notify those instructing me immediately and confirm in writing if, for any
reason, my existing report requires any correction or qualification;
vi. I know of no conflict of interest of any kind, other than any which I have disclosed in
my report;
vii. I do not consider that any interest which I have disclosed affects my suitability as an
expert witness on any issues on which I have given evidence;
viii. I will advise the party by whom I was instructed if, between the date of my report and
the trial, there is any change in circumstances which affect my answers to points vi
and vii above;
ix. I understand that:
a) my report will form the evidence to be given under oath or affirmation;
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b) questions may be put to me in writing for the purposes of clarifying my report and
that my answers shall be treated as part of my report and covered by my statement of
truth;
c) I may be required to attend Court to be cross-examined on my report by a cross-
examiner assisted by an expert;
d) Iam likely to be the subject of public adverse criticism by the Judge if the Court
concludes that I have not taken reasonable care in trying to meet the standards set out
above;
e) the Court may at any stage direct a discussion to take place between experts for the
purposes of identifying and discussing the expert issues in the proceedings, where
possible reaching an agreed opinion on those issues and identifying what action, if
any, may be taken to resolve any of the outstanding issues between the parties;
59) the Court may direct that following a discussion between the experts that a statement
should be prepared showing those issues which are agreed and those issues which are
not agreed, together with a summary of the reasons for disagreeing;
x. I confirm that J have not entered into any arrangement where the amount or payment
of my fees is in any way dependent on the outcome of the case.
xi. Ihave read Part 33 of the Criminal Procedures Rules and I have complied with their
requirement.
xii. I have acted in accordance with the Code of Practice for Experts.
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I confirm that, insofar as the facts stated in my report are within my own knowledge,
I have made it clear which they are and I believe them to be true, and that the
opinions I have expressed represent my true and complete professional opinion.
Peter Maurice Smith BSc(Hons) FCA MEWI
Quantis
Chartered Accountants
13 Newgate Street
Morpeth
Northumberland
NE61 1AL
28 July 2009
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NEWCASTLE-UOPN-TYNE_
CROWN COURT
THE QUEEN
v
PETER ANTHONY HOLMES
ACCO! 'S REPO!
General Counsel to.
Royal Mail Group Limited
Legal Services
6a Eccleston Street
Victoria
LONDON
SW1W SLT
zAcriminal work folders\mefarlane julieymcfarlane juliet - crm\261295 - holmes\backsheets.doc
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