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POST OFFICE LTD — CASE REVIEW.
R. v. THOMAS GEORGE BROWN
Newcastle Crown Court
Offence
1.
Thomas George BROWN faces two charges of False Accounting, alleging that
between the 29" February 2008 and the 25" November 2008 (charge 1) and between
the 20" November 2008 and the 25" November 2008 (charge 2) he made false entries
into Horizon so as to conceal a shortage of £85,426.80.
Case history
2. The defendant appeared before the Newcastle Magistrates Court on 2™ October 2012.
He indicated a Not Guilty plea and the Magistrates deemed the case unsuitable for
summary trial. The case was adjourned for the preparation of committal papers and the
committal hearing took place on the 11" December 2012. The committal was
unopposed and the case was committed to Newcastle Crown Court for a Pleas and
Case Management hearing on the 10‘ January 2013 at Newcastle Crown Court.
Counsel who attended at the first Magistrates’ Court hearing was on that date informed
that the case would be contested, on the basis that there must have been an error in the
Horizon accounting system.
The matter next came before the Newcastle Crown Court Pleas and Case Management
on the 10‘ January 2013, when the defendant entered not guilty pleas. The matter was
listed for trial to commence on the 17" June 2013.
Following adjournment the trial is now listed to commence on the 18" November
2013.
ll.
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Prosecution case
The defendant Thomas George BROWN was the Sub-Postmaster at the North Kenton
Post Office Branch, Newcastle-upon-Tyne. He also owned the associated shop and
employed a Post Office Manager and three other staff. Mr. Brown’s User ID was
TBRO04.
Prior to purchasing the business in February 2008, BROWN was employed by Finlays
at the Benton Estate Post Office, from the 15" July 2003 to the 2s September 2006
and at the Kenton Post Office from the 25" September 2006 to the 29" February 2008.
On the 25" November 2008 at approximately 8.30am an audit was conducted at the
North Kenton Post Office; this revealed a total shortage of £85,426.80. A large part of
that shortage seemed to derive from a transaction completed on the 20" November
2008: at 8.01lam that day a single transfer of £82,614.24 out of Lottery funds and into
Main stock had been actioned on the ‘Horizon’ system under the User ID TBR004.
That transfer had not been accepted on Horizon when a snapshot check was conducted
at 8.41am on the 25" November, some 5-days after the transfer had been actioned.
Accordingly the £82,614.24 was ‘lost’ in the system.
At 2.59pm on the 25" November the audit team noted that the transfer had been
accepted; this, according to ‘Horizon’ ,had occurred at 10.21am on the 25" November
and again under the User ID TBR004 — Thomas BROWN had been present and in the
secure area throughout the proceedings. It is to be noted that this transfer occurred
about one hour and forty minutes afer the audit had commenced.
The effect of these two transfers was a deficit at the Post Office of £82,614.24. The
audit further small shortages resulting in the final figure of £85,426.80.
. When asked during the audit, Thomas BROWN said he had no knowledge of the
transfer.
In addition to Thomas BROWN, four others were employed at North Kenton: Helen
ALLEN; Kayleigh ALLEN; Victoria OLIVER; and Deborah MEIN: each has
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provided a statement in the following terms:
Helen ALLEN
Post Office Manager since December 2006 and prior to BROWN taking the
business over. Before he came she attended to all of the cash ordering, daily
reports and lottery returns. When BROWN took over he relieved her of these
duties and invariably conducted them himself. Always counted the cash himself at
close of business. BROWN then began to alter a number of accounting and
security procedures; this made Ms. ALLEN unhappy. She complained to him but
he dismissed her complaints with varying but irregular explanations. Conducted
cash checks herself because of her concems and found substantial shortages. The
Post Office was “...a/ways short of cash.”. On occasions BROWN would make
up shortages in the Post Office with shop takings and repay the shop when the next
cash remittance. At one point on the 25" November BROWN asked Ms. ALLEN
to stand with the audit team as he wanted to leave the office.
Kayleigh ALLEN
Clerk since February 2008 (and daughter of Helen ALLEN). Not involved in cash
balancing or accounts. Overheard a conversation between BROWN and Victoria
OLIVER: Ms. OLIVER told BROWN that “\.she did not want to be entering
cash into the computer that wasn’t there. Tom said it was fine as the Post Office
knew about it and not to worry.....” Cash remittances arrive twice-weekly, on
Tuesdays and Thursdays but often the Post Office would run out of cash. When
this happened BROWN would send staff out to clients to see if they were due to
deposit large sums; if so they were asked to lodge the deposit early. Confirms her
mother found a cash shortage of £20,000 on one occasion.
Victoria OLIVER
Clerk. Confirms BROWN’s alteration of procedures. Confirms BROWN using
shop money to supplement Post Office shortages. He would also ask them to
reissue torn and Scottish notes when short. Refers to an occasion when short
£18,000 and was unhappy about how it was dealt with.
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Deborah MEIN
Clerk. Confirms two occasions when, due to staff concerns about running out of
cash, the staff counted and found shortages of £22,000 and £37,000.
Searches
12. The usual searches were conducted. That of Thomas BROWN’s home revealed bank
and financial documents suggesting that he was in considerable debt. Also found were
two Alliance & Leicester paying-in slips made out to ‘Finlays (North East) Ltd’ in the
sum of £1747.40 dated 7/10/2005 and £2642.50 dated 1/6/2006.
13. Subsequent enquiries with Alliance & Leicester suggest that these sums were not
credited to Finlays account. It also appears that between 2005 and 2007 a number of
deposits lodged by Finlays at the Benton Estate Post Office had not been credited to
their account; these discrepancies amount to some £48,000.00.
Interviews
14. Two interviews conducted: firstly on the 15" December 2008 and later on the 2™
August 2011.
15. 15" December 2008:
He had borrowed £150,000 to purchase the business, it had cost £140,000.
It had belonged to the Finlays.
Confirmed his password was confidential;
The money had been in the Lottery for months and he didn’t know where it
was;
He had never taken any money from the Post Office;
He had made the transfer on the 20" November but that it had not been
accepted into stock unit AA. He had left the cash in the lottery and so that
should have been over by the £82,000. He was dumbfounded as to where
the money had gone. There must be something wrong with the lottery.
On the day of the audit the auditor had asked him (Brown) to log-in and the
auditor had then worked two computers: one under BROWN’s log-in and
the other under his own. BROWN had not worked on any computer himself
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on the day of the audit and so could not have executed the 10.21lam
transfer.
Often the girls would count the cash at the close of business; Helen
(ALLEN) helps him with the branch trading statement.
2™ August 2011:
Mr. BROWN denied taking any money from any of the Post Offices he had
worked at;
The Alliance & Leicester paying-in slips were at his home because he used
to accept them at the Benton Estate Post Office and he always had “loads of
stuff” in his pockets;
He did not know why the sums indicated on the slips had not been paid into
Finlays’ account;
Since he had been suspended Zubair PATEL (‘ZUBES’ ) had taken over as
sub-Post Master; ZUBES had also suffered losses of £12,000 during his
first 2 months of tenure but these losses had stopped when Deborah MEIN
had left;
Accordingly he believed that Deborah MEIN was responsible for all of the
losses;
He could not remember the losses referred to by his other staff;
He agreed that he had instructed the staff not to physically count the cash —
in 30 years he had never counted cash;
He had not reported the losses because he believed the money would be
‘found’ and he feared for his position;
Where the accounts had not balanced he had inflated the cash figures to
show a balance;
It was always he who inflated the cash figures, none of the other staff did
SO;
He had falsified the accounts — “Yes yes guilty”
It was dishonest and misleading to have altered the cash figures to disguise
losses.
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Defence case
16. In interview the defendant indicated that he did not know how the losses arose and
offered a number of speculative explanations. He admitted false accounting to hide the
losses.
17. This defendant has yet to serve a Defence Statement. I have however discussed this
case with outside prosecuting counsel Chris Rose of New Park Court Chambers,
Newcastle. The defence case appears to be that, whilst Mr. Brown admits covering his
unexplained losses by altering cash figures and moving cash into and out of the
Lottery Unit, he did so without any dishonest intent.
Prosecution response to defence
18. Gareth Jennings has provided a statement in this case.
Other relevant factors.
19. Mr. Brown is now 67 years old and has been declared bankrupt; both of these factors
militate against any effective recovery.
Discussion
20. Throughout this case the defendant sought, at least implicitly, to rely for his defence
on what he asserted to be failings on the part of Horizon. Further, this is a case in
which Gareth Jennings has provided one of his (pro forma) expert witness statements.
2
. Because this matter has not yet reached the trial stage, it is not, and cannot be, the
purpose of this review to determine the merits or otherwise of the defence case, not
least because we have yet to receive a Defence Statement. Our only task at this stage is
to determine whether or not we are required by our disclosure duty to serve the Second
Sight Interim report and the Helen ROSE report. The answer to that question is simply
put: s.3 of the Criminal Procedure and Investigations Act requires us to disclose
material in our hands which meets the test for disclosure and this material does meet
the test, based upon what the defendant said in his interview.
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22. Accordingly our duty is now to serve on the defence those documents. I advise that we
comply with that duty in this case. Chris Rose agrees with this advice.
23. Subject to the receipt of instructions as to the continuance of this prosecution (for
which see paragraphs 24-26 below, and specific instructions to the contrary, I will
draft a letter to the defence for Post Office Ltd’s approval and, in accordance with your
instructions to us, serve that letter and the reports on defence solicitors.
Other considerations.
24. What remains is the decision as to whether the continued prosecution of Mr. Brown
remains in the Public Interest (and that of POL). In addressing this issue I take into
account the following matters, which operate in favour of continuing the prosecution:
i. The loss, some £85,000;
ii. The apparent extent of the defendant’s dishonest conduct;
iii. Prolonged course of conduct, committed over 9-months and
encompassing many false entries;
iv. The fact that the defendant deliberately cast suspicion on Deborah
MEIN (see para.15 above).
25. Conversely, factors which operate in favour of terminating the proceedings include:
i. His age, now 67;
ii. The fact of his bankruptcy;
iii. Any Confiscation Order would be nominal, he having no assets;
iv. The passage of time since the original shortfall was identified — 25"
November 2008. The 5" anniversary of the audit will fall within the
trial listing of the 18" November 2013;
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v. No members of the public suffered loss;
vi. The cost of continuing the prosecution.
26. The decision to continue or terminate this prosecution lies with POL: the considered
opinion of prosecuting solicitors lies with terminating the prosecution. We arrive at
this view primarily because of the almost impossible recovery scenario coupled with
the ongoing cost of continuing. Lesser factors include the defendant’ s age.
Simon Clarke 15" July 2013
Barrister
Cartwright King Solicitors