Post Office Scandal

Reporting the Post Office Horizon IT Scandal

Post Office Scandal

Reporting the Post Office Horizon IT Scandal

Penny’s Printouts

Nick Wallis

18 comments

5 min read
Penny Williams

This is Penny Williams. Penny ran the Manaccan Post Office in Cornwall between 2007 and 2013.

I have just come off stage with Penny at Launceston Town Hall where she spoke about her experiences at the hands of the Post Office.

During our conversation, Penny revealed she has paper evidence of what appears to be fraudulent back-end transactions at her Post Office. That is, computer printouts showing that money was withdrawn from her accounts, over a period of twelve months to 2013, during times when the branch was closed and no one was logged on to her Horizon IT terminal.

The Story

After a successful tenure as Manaccan Subpostmaster, Penny was selling up. She had run the branch without a problem for six years and fancied a change.

In September 2013, whilst she was away supply teaching, Post Office auditors descended on her branch and started an audit. Penny was contacted by phone after the audit and told she was £20,000 short. Penny was suspended pending an investigation. The Post Office wanted to know how she proposed to settle the outstanding amount.

Penny was alarmed. She had been audited eighteen months previously and there were no problems. Rather than settle the amount, Penny asked the Post Office to show her how and where this discrepancy had arisen. The Post Office refused, instead they invited her to interview under caution. 

Penny asked if she could bring her lawyer. The Post Office again refused, so Penny declined the invitation and reiterated her suggestion the Post Office provide her with evidence of the negligence, carelessness or error which caused the £20,000 deficit. Penny used to work for Morgan Stanley.

Penny on stage in Launceston

That’s not to say she wasn’t in some distress. Penny knew the St Keverne Subpostmaster, Sue Knight, who was being prosecuted by the Post Office. Penny rang Sue and Sue put her in touch with Alan Bates from the Justice for Subpostmaster’s Alliance. Alan put Penny on his mailing list and told her to make sure any communication and correspondence from the Post Office went through her lawyer.

Penny began to receive letters from the Post Office’s debt recovery team, who demanded she give them £20,000. Penny held out, but her suspension had an immediate effect. The deal to sell the Post Office fell through. Rumours she was a thief spread round the community. People stopped coming into her shop and the pub she ran as a tenant landlady. Her income dried up. 

The mysterious packet

Whilst all this was happening, Penny received a packet in the post. A brown envelope filled with dot-matrix computer printouts which appeared to be financial data relating to her branch. There was no covering letter.

Penny recognised some of the transaction data, but there was a lot of information requiring a proper forensic examination. She gave it to her sister, who worked in the payroll department of a major UK plc. Penny’s sister and her boss, a qualified accountant, began to work through the documents. According to Penny, they established beyond doubt that over the months covered by the printouts, during periods when the branch was closed, hundreds of small debit transactions (Penny mentioned a recurring £29 and the occasional £14.65) were being made at her branch. They added up to more than £16,000. 

In 2014, Penny was made bankrupt by HMRC. Her pub was taken from her. Due to the internal ramifications of the independent investigation by Second Sight, the Post Office had decided to stop prosecuting people, so she was “lucky” in that respect (Sue Knight’s prosecution was dropped because, she was told, it was no longer in the public interest, without further explanation).

Penny was left to pick up the pieces of her life and career, which she did by continuing to teach, eventually turning her hand to pie-making. Penny’s Pies has become a successful business with a shop in Falmouth, an outlet at the Great Cornish Food Store in Truro and a dedicated pasty and pie-making facility in Helston (pictured).

Penny still has possession of the computer printouts. She still doesn’t know who sent them or why. I have asked if I can possibly have sight of them. If they corroborate her sister’s interpretation, she is sitting on a national news story and possibly the first concrete evidence of internal fraud at the Post Office during the Horizon IT scandal. 

Penny, who very kindly brought some of her delicious pasties for us to sample after her talk, has said she will try to dig out the documents as soon as possible.

I am currently touring Post Office Scandal – the Inside Story. Please do come and see us as we make our way around the country (all dates here). I’ll be at the Acorn in Penzance with Penny once more at 7.30pm tonight. Come and hear her story.

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18 responses to “Penny’s Printouts”

  1. Judy avatar
    Judy

    any events in north of england?

    Reply
  2. Frances avatar
    Frances

    Your presentation I went to in Leatherhead (with Seema Mistra) was outstanding, so I highly recommend these. I just wish I could see all the stories told in each region.
    It looks as if Penny’s story should be reported to the public inquiry for a start off. The issue is, presumably how she can get access to PO and Fujitsu data for a forensic accountant and expert witness. I’m guessing that would be very difficult without a court order (and given the attitude of the thugs running the PO).
    It could be the right moment to start up crowd funding for the costs. I’d definitely be happy to contribute.

    Reply
  3. Nick Shand avatar
    Nick Shand

    Remote Access is key vulnerability many scammers rely on to siphon funds from the unsuspecting. The Architect of the Horizon System, Gareth Jenkins (who has deficiencies in his own personal integrity) was also likely responsible for the integrity of Horizon as well. It is easy for me to imagine a scenario where someone was able to get a hold of an unused/broken Horizon unit and methodically examine it offline until the inevitable vulnerabilities were fully exposed. Any hacker/s were then greatly aided by the Post Office’s willingness to crucify SPMs with all the debts that future hacks tagged to them. When Penny lost everything, the individual who sent the brown envelope felt bad about the injustice of it all. Wasn’t me your Honor, but if it was I now don’t recall.

    Reply
  4. Richard Gladwell avatar
    Richard Gladwell

    Many thanks for this. I am following the Live broadcast of the Inquiry from NZ, and have seen many of the replays. As one who has spent the majority of their working life in large computer system operations, worked for a computer consultancy interacting with contracting teams working on projects. What has happened with the Post Office system is not surprising. The same thing happened here with the Inland Revenue Department – who shared many of the same attributes:
    – a computer system on which users could not track their own transactions and balance those against paper records.
    – a government body give the right to prosecute outside the criminal system
    – investigators with no legal or other training
    – a view that all clients were tax-dodgers unless they could prove otherwise
    – use of statutory powers to weaponise the State against selected people
    – the ability to raise much bigger claims by imposing substantial penalties as a negotiating ploy
    – having “villains” pay purely because they could not longer foot the legal bills
    – in bankrupting “villains” the IRD did not receive any more money, and in fact lost more through expensive prosecutions.

    The organisation at that time was a Brit who brought to the role many of the attributes, we have seen in the POL to IRD.

    There were many suicides by people (often farmers) who received very large tax bills, and who could see no way out.

    Their computer system was always right until proven inaccurate.

    Since the retirement of that particular commissioner, IRD have introduced a new computer system. They have an attitude of working with people rather than abusing them. A taxpayer has full and instant access to their records.

    From my software house and computer operations background it is standard practice to roll out systems which do have bugs in the code – as you get to the point that not all permutations of user behavior will be known, and what should happen is that these bugs are known and quietly fixed, wiyh all patches incorporated in the next release – so you don’t get band-aids on top of band-aids.

    The bottom line is that computers are just a fallible as the manual systems they replace.

    Their output should never be used for criminal prosecution or legal proceedings. The accurate compilation of bugs via an Issues Register is the standard practice – that way the numbers/areas/issues can be totalled – and these get fixed and specific test cases created.

    Outside of UK no-one in their right mind would buy an ICL system. Fujitsu was a good company in the mainframe market and gave IBM a necessary hurry-up with cheaper and better hardware and OS. They made a huge mistake trying to buy the ICL software development – in an attempt to buy UK market share, and presence.

    It has blown back on them in a way that is probably terminal. No company director should ever sign off on purchasing one of their systems, once the Inquiry’s Report is published.

    RG

    Reply
    1. Frances avatar
      Frances

      Fascinating how similar these issues are. I’ve never heard of the NZ matter at all, yet it clearly is a pointer to all sorts of problems in other countries.
      Too many establishment people in the UK still maintain the view that British is best, rather than looking around the world to see what can go wrong and what truly best practice might be.

      Reply
    2. Brian Poster avatar
      Brian Poster

      I am puzzled by the condemnation of the Fujitsu system itself. Listening to the evidence it appears that Horizon worked remarkably well – it seems to have convinced a lot of people that it worked perfectly.
      The problem was the people involved who seem to have had no idea of the sort of errors that digital systems produce.

      Reply
  5. Boyd Johnston avatar
    Boyd Johnston

    I have to ask how somebody would be able to turn these small debits in Horizon into real cash? How could a phantom debit be turned into cash if it wasn’t physically taken from Penny’s shop?

    The horizon ‘shortages’ that saw postmasters prosecuted didn’t involve real money, at least not until postmasters were coerced into paying up, so how did Penny’s case work? Interesting one to follow.

    Reply
    1. Frances avatar
      Frances

      I entirely agree with you that whoever did this would have had to have access to real cash.

      It could just be that someone in Fujitsu had very pally relations with someone in the PO security team and an agreement for a percentage of the PO person’s bonus for prosecuting this sort of case. Let’s face it both companies had the same staff for years.

      Reply
      1. Roger Tilbury avatar
        Roger Tilbury

        If someone makes a transaction and receives cash and then someone in the skunkworks deletes the Horizon transaction there’s a profitable business as long as there’s no other record of the transaction. Wouldn’t work with a withdrawal against a bank card for example, but there are many other ways of getting cash. I am not familiar with giros or pension books, but maybe they could be presented multiple times somehow.
        After 40 years in IT I am sure there were bugs, especially around how comms/power failures were handled, but I am pretty sure there was personal fraud too, and NOT by SMPRs.

        Reply
  6. Paul avatar
    Paul

    I keep asking: Where are all the whistle-blowers?

    It seems there are more than we imagined, but they are being understandably very cautious

    We need better protection for whistle-blowers, who almost always lose everything

    Reply
  7. Julian avatar
    Julian

    Incredible scoop if corroborated. We know that remote access to Horizon terminals was possible, and completely unregulated, so the possibility of corrupt employees within the Post Office and Fujitsu using the chaos the system was generating to develop a scheme to defraud subpostmasters is entirely plausible. Having seen some of the thugs on the investigations and audit team on display at the inquiry – the ex-head of POL security is surely a former bent copper, given how coy he was about revealing his police career ?! – it would not surprise in the least.

    If the police can trace the accounts receiving the direct debits, it could be definitive proof of criminal conspiracy and fraud. If the enquiry hears this evidence, then a full forensic audit of the suspense accounts where SPM money was held is the next step.

    Reply
  8. John Mortimer avatar
    John Mortimer

    I for one, having read your book, appreciate your efforts in bringing to light the scandal within the Post Office from Paula Vennells and others downwards.
    Excellent, punchy journalism hitting right at the heart of hypocrisy from the earliest days when Tony Blair and Jack Straw gave Horizon the “seal of approval” and have never been challenged by the Metropolitan Police for their misdeeds in allowing an incompetent computer system for to go ahead.

    Reply
    1. Gill avatar
      Gill

      Yes, and Alice Perkins is Straw’s wife. I too read Nick book 3 years ago. I knew Angie Vennells, sadly died

      Reply
  9. Magistrates' Blog avatar
    Magistrates’ Blog

    Credit to Penny for standing firm against Post Office Limited’s menacing enquiries and bully-boy tactics. Glad to see her current business is doing so well. Hope she doesn’t need to wait too long for the sincere apologies and substantial compensation she, and her fellow subpostmasters, so richly deserve.

    Reply
  10. Jenny Hurley avatar
    Jenny Hurley

    Good luck. Hope Penny finds the printouts.
    Jenny.

    Reply
  11. Julie Allen, Launceston Post Office avatar
    Julie Allen, Launceston Post Office

    I was in the audience in Launceston today and the whole presentation was gripping – I think we could have listened all afternoon!
    So pleased to see that Penny has founded such a successful business – we’ll be looking out for her pies in future.
    Good luck with the rest of the tour.

    Reply
  12. David Mercer avatar
    David Mercer

    Bless you Penny. With Nick’s help the list of heroes/ heroines that will eventually expose the full story of this scandal continues to grow. As a valuer employed by receivers In the early 2000s, I witnessed a number of families losing their village stores/sub POs after unexplained PO deficits, just like Penny. The sight of children in tears, clutching a toy for comfort and just not understanding what was happening – will never leave me. Hope you can find space in your busy schedule for an event in Cambridgeshire in due course, Nick – please!

    Reply
  13. Tristram Hicks avatar
    Tristram Hicks

    Thank you for this interesting post. I am trying to gather information on the ‘Bonusgate’ aspect of the scandal.

    Reply

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