Oh My Fraud

The US Postal Service has long been the butt of jokes for poor service, but nothing that comes close to this. In this transatlantic episode, Caleb and Greg unpack the story of hundreds of British subpostmasters whose lives were turned upside down when they were falsely accused of stealing from the Post Office. 



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Greg Kyte, CPA
Twitter: https://twitter.com/gregkyte
LinkedIn: https://www.linkedin.com/in/gregkyte/

Caleb Newquist
Twitter: https://twitter.com/cnewquist
LinkedIn: https://www.linkedin.com/in/calebnewquist/

Email us at ohmyfraud@earmarkcpe.com

Sources: 
Post Office scandal explained: What the Horizon saga is all about — BBC
Secret papers reveal Post Office knew its court defence was false — BBC
British Post Office scandal — Wikipedia
Post Office Horizon scandal explained: Everything you need to know — Computer Weekly
Post Office scandal: from suicides to jail time with child killers — the heartbreaking stories of the postmasters — The Standard
A Brief History of the United States Postal Service -  The Smithsonian
The History of the Post Office — Automatic Access Limited Blog
Royal Mail - Wikipedia
A short history of the Post Office — The History Press 
Post office numbers — House of Commons Library
Subpostmasters get raw deal in Post Office pay structure - Apex Insights
How independent retailers can make money from Post Offices — The Grocer
How to start a post office — PDQ Funding

Creators & Guests

Host
Caleb Newquist
Writer l Content at @GustoHQ | Co-host @ohmyfraud | Founding editor @going_concern | Former @CCDedu prof | @JeffSymphony board member | Trying to pay attention.
Host
Greg Kyte, CPA
Mega-pastor of @comedychurch and the de facto worlds greatest accounting cartoonist.

What is Oh My Fraud?

"Oh My Fraud" is an irreverent podcast from CPA/comedian Greg Kyte and blogger/former CPA Caleb Newquist.

The two come together to unpack their favorite frauds and explore the circumstances, psychology, and interpersonal dynamics involved. They also fully indulge in victim-blaming the defrauded widows, orphans, infirm and feeble-minded—because who can resist?

If you fancy yourself a trusted advisor—or prefer your true crime with spreadsheets instead of corpses—listen to this show to learn what to watch out for to keep your clients, your firm, and even yourself safe.

Greg Kyte: A lot of people have said that the horizon IT scandal is one of the worst miscarriages of justice in British history. And remember, the British did colonization, slavery and the fucking Crusades.

Earmark CPE: If you'd like to earn CPE credit for listening to this episode, visit earmark Cpcomm. Download the app, take a short quiz, and get your CPE certificate. Continuing [00:00:30] education has never been so easy. And now on to the episode.

Greg Kyte: Hello and welcome to Oh My Fraud, a true crime podcast where our victims aren't killed, but sometimes they literally die waiting for the legal system to mete out justice. I'm Greg Kite.

Caleb Newquist: And I'm postmaster Caleb Newquist.

Greg Kyte: So, postmaster, before we get into it, uh, you cool? If I read a listener review [00:01:00] real quick, please. Awesome. This one comes from Samantha Bee, CPA. Samantha says, oh my fraud is one of my top go to podcasts. And I've been raving about it to all my colleagues at my firm, Greg and Caleb often have me chuckling to myself as I listen to their entertaining stories on the biggest scandals and fraud cases I never knew existed.

Caleb Newquist: Ah, that's an amazing review. Why am I talking in an Australian accent? [00:01:30] Oh, I don't know. What an.

Greg Kyte: Amazing.

Caleb Newquist: Review. Amazing review. Um, we need to hire her in, uh, to write ad copy for us, I think. I think so too. I think that was. Yeah. Why not? Yeah.

Greg Kyte: Brilliant.

Caleb Newquist: Brilliant. If you like. Oh, my fraud. Please take a minute to write us a review. Even if you're not great at writing ad copy. Uh, who knows? Uh, we still may read it on the show.

Greg Kyte: Also, uh, if your firm is looking for in-house ethics or fraud training, that does not suck. We do that. We also do keynote addresses [00:02:00] at events and conferences. And don't worry, we can work clean. Uh, but we can also work extra filthy, too. It's kind of. If you hire us, it's up to you.

Caleb Newquist: Yeah, there's a spectrum. Yeah. So if you want more info on pricing and availability, send us an email at oh My fraud@imaqtpie.com.

Greg Kyte: Perfect. So Caleb let's change subjects.

Caleb Newquist: Okay I.

Greg Kyte: Want to know, have you personally ever been falsely accused of something, could be falsely accused by [00:02:30] the authorities, could be falsely accused by your sister or anywhere in between. Uh, has that ever happened to you?

Caleb Newquist: Yeah, I'll. I don't know if this really counts or not, but. I have a I have a I have a story. Okay. One one summer I was in college, I and I went to a small house party and some guy was like going around and asking people what year they graduated high school. And he was.

Greg Kyte: So wait, [00:03:00] so is.

Caleb Newquist: This is this.

Greg Kyte: From a 1980s teen movie? I mean.

Caleb Newquist: It kind of feels like. Yeah, except it's it's it's not that old. Okay. Not quite that old. Okay. I mean, if it if it had been you, if you had been telling this story, it would, it would have it would have been a 1980s teen movie. Likely. Yeah. Yeah. No, but this one was it was 90s and it was me. And so it was, it was more, you know, ironic and lots more flannel.

Greg Kyte: Okay. Good. Right. Good. Yeah. Appropriate.

Caleb Newquist: Anyway. Yeah, totally. Anyway, so this [00:03:30] guy is going around and he's asking people what year they graduated high school, and he was whooping and high fiving people who were, uh, class of 98 because he was class of 98. Hell yeah. Yeah. And so he gets to me and asks, hey, man, you class of 98? And I said, yeah, I'm class of 98. And he whoops and high fives me so hard that I thought he dislocated my shoulder.

Greg Kyte: Wait for for real or hyperbole.

Caleb Newquist: I mean hyperbole.

Greg Kyte: Okay, okay.

Caleb Newquist: But he did high five me pretty hard anyway. So [00:04:00] I go outside with a couple of friends and you know, class pride isn't exactly my forte.

Greg Kyte: So what?

Caleb Newquist: Yeah, I know, I know. Anyway, so I'm talking a little bit about this class of 98 zealot that we had just encountered because it was weird, right?

Greg Kyte: Yeah, that sounds kind of weird.

Caleb Newquist: It was kind of weird. And so, you know, a few minutes after that, the class of 98 fanatic is like coming straight at me with a head full of steam, and he just shoves [00:04:30] me right in the chest as hard as I've ever been shoved in the chest up into that point and maybe ever since. And he goes, and he like, this is a tall guy, like, taller than me. I'm six two and this guy was taller than me and had like, you know, a fucking goatee and a brush cut and like, you know, Wrangler jeans on, like he was, you know, he wrestles live animals for fun.

Greg Kyte: Gotcha. Like. Yeah. Yeah. Intimidating.

Caleb Newquist: Not a good situation for me.

Greg Kyte: Intimidating, intimidating. And as a.

Caleb Newquist: As a bookish. [00:05:00] As a bookish, right. Like, nonviolent type.

Greg Kyte: Right. And here comes this, this Cobra Kai member straight at you.

Caleb Newquist: What Cobra Kai with. You know, like I said, you know, with a very large belt buckle.

Greg Kyte: Yeah. Okay. Still, it's still plays, right?

Caleb Newquist: Different kind of belt anyway. He's a he shows me straight in the chest. He says, you talking shit about the class of 98? And he's just shouting that at me. And I'm like, what? [00:05:30] Because it's the strangest question I've ever heard in my life. Shit.

Greg Kyte: About an entire, uh, group of people that spans the entire world. Are you right? Yeah. And he repeats.

Caleb Newquist: Himself. You talk a shit about the class of 98, and I'm like, why are you accusing me of talking shit about the class of 98? I just high fived you in that fucking kitchen about being in the class of 98. Why would I be talking shit about class of 98? I'm class of 98, [00:06:00] and if you haven't picked up on it, this guy wasn't exactly a scholar, so he was apparently satisfied by this explanation. And he he stormed off to crush more beer cans on his head or something. I don't know, but that was the end of it. And, uh, so I got out virtually, uh, you know, unscathed.

Greg Kyte: Yeah. So, so so really, you were accused of talking shit about the. You were falsely accused of talking [00:06:30] shit about the class of 98, when what you really had done was you had really just talked shit about a guy who was excited about the class of 98. So you were. Yeah. Technically falsely accused.

Caleb Newquist: Yeah. Technically, yes.

Greg Kyte: Okay. Yeah, yeah. I'll, I'll I'll back you up in a court of law.

Caleb Newquist: Okay. All right. Cool. I mean, that's that's what I got. That's what I got for the show, Greg.

Greg Kyte: Okay. It's great, I love it. Yeah. Fantastic. That is super relevant because today's episode is all about hundreds of people who were falsely accused of stealing thousands of pounds from the [00:07:00] British Post Office.

Caleb Newquist: Fun fact the United States Post Office actually predates the United States. In 1775, the Second Continental Congress officially created the Post Office of the United States and article one, section eight, clause seven of the Constitution of the United States of America gives Congress the power to establish a post office and post roads. Our [00:07:30] system is a federal system. It is not, nor has it ever been privatized. It's been.

Greg Kyte: Attempted. They've tried.

Caleb Newquist: They've tried, and they've talked about it. And I always feel like that's a very strange. The idea to privatize the post office is very strange to me. That just doesn't seem right. Yeah. You know. Yeah.

Greg Kyte: And just because we're. But I but I think it's just because we're not used to that. That. Yes.

Caleb Newquist: And that's what I was about to say. It's because like, it's obvious we're we're going to talk about it in a little bit.

Greg Kyte: Feels [00:08:00] very foreign. Is that a good way to say it. Yeah.

Caleb Newquist: Literally feels especially.

Greg Kyte: Foreign.

Caleb Newquist: Right. Foreign. Right. The post office is in the United Kingdom, however, has a very different origin story. And so here it is. The roots of the current postal system go back to 1516, when Henry the Eighth established the Master of Posts, because how else was he going to get his dick pics to Anne Boleyn?

Greg Kyte: There's no other way.

Caleb Newquist: No other way.

Greg Kyte: You [00:08:30] got to have a master of the posts, right? He can't, he can't, he can't text him. It's 1516, for Christ's sake.

Caleb Newquist: Right. At that point, mail services were only for rich people. But that all changed in 1635 when, according to many sources, King Charles the First made available to all three Charles's and 400 years.

Greg Kyte: That's not enough. Charles's really, when it seems.

Caleb Newquist: Seems [00:09:00] like a small number anyway. It didn't say how he made it available to all, but I assume that means he just made it cheaper. But also, back then postage was paid by the recipient. So maybe 17th century Brits were cool playing. You know, exorbitant postage if not paying meant they wouldn't get that love letter from Mr. Darcy.

Greg Kyte: Uh, wait. So recipients. The recipients were paying for postage. They drive on the left side of the roads. Those [00:09:30] limey bastards they got, they're just doing everything wrong, is what it feels like to me.

Caleb Newquist: Yeah, yeah, and I mean. Limey bastards is going to age real well.

Greg Kyte: Um, yeah. It is.

Caleb Newquist: Anyway, the modern postal service in the UK was established in 1660 by King Charles the Second. Wow. So two Charles is in quick succession and then. No Charles for 400 years. Almost for 350 years, basically. Interesting. A lot of.

Greg Kyte: Yeah. [00:10:00] Because wait. Because right now we're he's Charles the third.

Caleb Newquist: Charles the third. Oh yeah. I don't know about this monarchy business anyway. Originally the postal service served only England and Wales, but eventually it grew to cover all of Great Britain. The postage stamp wasn't invented until 1837, and in 1840 the General Post Office issued the Penny black, which was the first postage stamp used anywhere in the world. Why [00:10:30] was there three years between when the postage stamp was invented and when it was first used? I don't know, let's say COVID COVID.

Greg Kyte: Yeah, probably. Covid. Covid-19. Yeah. Well, COVID 1840, 1830 1837. Yeah.

Caleb Newquist: Through 1840. Yeah. Right.

Greg Kyte: Exactly.

Caleb Newquist: The introduction of the postage stamp did three things. First, it established a flat rate for mail that weighed up to half an ounce before the stamp postage [00:11:00] was charged based on distance. Weird.

Greg Kyte: No. Makes perfect sense to me, does it? You want to mail this around the corner? You want to mail it to 2000 miles away? That's what I think. Our current. I think the flat rate is crazy.

Caleb Newquist: Oh, okay. Yeah, I see your point. Yeah. Good point. Okay. Second stamps created a prepaid mail system instead of a postage being paid by the recipient. That seems like a smart thing. Yeah, yeah. [00:11:30]

Greg Kyte: Well, uh, yeah, it seems like a convenience thing to me.

Caleb Newquist: Sure.

Greg Kyte: So. But at the same time.

Caleb Newquist: What if the what if the letter shows up and, you know, the the recipient is broke, right.

Greg Kyte: But also think about this. If you if the postman came and said, hey, hey, Mr. Newquist, you got some mail today, do you got enough money to pay for it or do you just want to not know what came? And that would be hard to not go. Let me go search in my couch to find some coins to give because I'd be so curious. [00:12:00] I wouldn't want to, you know, FOMO would make me pay that charge, even if it was exorbitant.

Caleb Newquist: I'm not getting text messages in 1660.

Greg Kyte: Right, right. The only way you're too. You're just not going to care. You. I'd be so curious. I'd pay. I'd. I'd pay quite a bit for that mail. Right.

Caleb Newquist: So third, the advent of the postage stamp was the birth of the strange and nerdy hobby of stamp collecting. Correct.

Greg Kyte: And fun fact that the penny black. [00:12:30] The very first stamp. Uh huh, uh, if like a mint condition actually, what's your guess? Or did you see my note? What's your guess as to what a mint condition Penny black would would would what you'd be able to get if you had one.

Caleb Newquist: So a stamp, uh, you know, 180 years old, 180, 190 year old stamp. Yeah. Mint condition. Yeah.

Greg Kyte: Mint condition. Top of the line. Top shelf.

Caleb Newquist: 2.2. 3 million pounds.

Greg Kyte: Nope. Only $3,000. Doesn't [00:13:00] that seem ridiculously low? The most valuable stamp is is called the British. Uh, Guiana. The British Guiana. That's it. The British Guiana $0.01 magenta, which is valued at, uh, $9.4 million. So if you got that first stamp, you're a sucker and a loser. But if you got the British Guiana one-cent magenta, you, uh, you got a winner, you nerd. You.

Caleb Newquist: Was that one survive. Did you figure out why that one was [00:13:30] so valuable?

Greg Kyte: Uh, yeah, because, I mean, look at the name. It's a oh, it's magenta. It's got Guiana in. It's very exotic.

Caleb Newquist: Yeah, magenta I understand. Yeah. Okay, cool. A bunch of weird rebranding. Restructuring and reorganization happened between 1969 and 2011. The details are complex and boring, and we lost interest and decided to skip over all that.

Greg Kyte: But you're welcome.

Caleb Newquist: Yeah. But then huge changes [00:14:00] came with the Postal Services Act of 2011. The act allowed up to 90% of Royal Mail because that is the that is that's what the the what was that kind of the branding of the. Yeah.

Greg Kyte: Like the like the official trade name of the British Postal post office. Right.

Caleb Newquist: So the Postal Services Act of 2011 allowed 90% of Royal Mail to be privatized, and it became a publicly traded [00:14:30] company in 2013.

Greg Kyte: So weird.

Caleb Newquist: Yeah. Very weird. And the British government sold the last of its shares in 2015.

Greg Kyte: One very significant way that the UK postal service is different from the US Postal Service has to do with subpostmasters. Subpostmasters have been around in the United Kingdom since the 1800s. An article we found [00:15:00] in Computer Weekly does a good job summing up what subpostmasters thing is all about. It says, uh, subpostmasters have a contract with the Post Office to run branches, but they are not employees of the Post office. They usually have a retail business that is connected to the post office, the idea being that the retail operation will gain more customers through the post office, drawing people in. For instance, let's say you had a drugstore in, [00:15:30] uh, in Sussex. Uh, you could also become a subpostmaster and open an official branch of the UK Post Office right inside your pharmacy, so that then when people come inside to send letters or to buy postage, since they're already in your pharmacy, they'll also refill their Lipitor and grab a cheap, last minute Valentine's gift to help their failing marriage limp along for a few more months, just the way CVS does [00:16:00] in the United States, just without the without the post office stuff, but still with the cheap Valentines, you know what I'm saying, right? Yeah, you.

Caleb Newquist: Can send it straight from the CVS.

Greg Kyte: If you had a post office, you could send it straight from the CVS to your strange spouse. Yes. With whom you're trying to help a failing marriage limp along for a few months. Brilliant. You see, you're always one step ahead. As of 2023, about 99% of all [00:16:30] UK post offices are franchises that are run by subpostmasters who are, as we said, independent business people. The other 1% are called Crown Post Offices, which I assume by the name means they're all run by King Charles the Third. So the answer to what does the British monarchy even do is they sell stamps. I, I'm assuming I don't really I haven't looked into it super closely, but I believe [00:17:00] that that's accurate.

Caleb Newquist: Yeah, I think that's right.

Greg Kyte: Uh, running a post office franchise as a subpostmaster is a very unique situation. As a franchise operator, you're not charged any fees or commissions by Post Office Limited, which is basically the name for Post Office Corporate. Or as John Oliver would say, Post Office Limited is the franchisees business daddy. Once you obtain a post office franchise, you do need to buy and install equipment for the franchise. [00:17:30] However, under certain circumstances, uh, the corporate post office might make a financial contribution towards the equipment. Then you make money primarily by getting a cut of all postage sold at your franchise, anywhere between 9% to 18%.

Caleb Newquist: In 1999, the Post Office introduced the Horizon Accounting and Inventory Software program. The Horizon system was intended to transform the existing paper based branch accounting into an electronic [00:18:00] system, covering the full range of post Office services. But almost immediately, subpostmasters started complaining that the horizon system was shit. Specifically, it was falsely reporting accounting shortfalls, sometimes to the tune of thousands of pounds. Not good. Yikes. Yeah, so the subpostmasters brought it up with the Post Office, and the Post Office told them to shut up because the system was right. But it wasn't.

Greg Kyte: No, [00:18:30] no, no, the.

Caleb Newquist: Problem wasn't just that the horizon system glitches were showing cash and inventory shortfalls for many of its subpostmasters. The other problem was the contract between the Post Office and the subpostmasters, it reads. The operator shall be fully liable for any loss of, or damage to any Post Office cash and stock. Any deficiencies in stocks of products, and or any resulting shortfall [00:19:00] in the money payable to the Post Office Limited must be made good by the operator without delay, so that in the case of any shortfall, Post Office Limited is paid the full amount. So the accounting system imposed by the Post Office was showing false deficiencies and shortfalls, and the Subpostmaster contract required them to pay for any deficiencies and shortfalls out of their own pocket. That seems [00:19:30] bad. Yeah.

Greg Kyte: And it seems rough. But also, I kind of get it because if they're going, hey, the money that you deposited with us doesn't match what you were supposed to sell. Then it's like, so you fucked up. So send us the money. I and again, all these I've been I've been part of writing enough contracts that I know that the person in power writes the contract to favor them very strongly and. Yeah. And, and a lot of and these postmasters are probably like, yeah, yeah. Cool. If that ever. It's not [00:20:00] going to happen. I'm a good business person. So so whatever. Yeah. If it if there's a discrepancy. Sure. I got you.

Caleb Newquist: And the post office refused to entertain any suggestions that the problem was with the software.

Greg Kyte: There were some 11,000 subpostmasters in the UK. Approximately 3500 of them were affected by the problems in the horizon accounting [00:20:30] system, and 900 of them were criminally prosecuted for theft and fraud. Here are a handful of the stories of those affected. In 2002, Seema misra and her husband Davinder decided they wanted a second child, but it wasn't until 2010 that they were able to conceive and Seema became pregnant in the meantime, specifically in 2005. Seema acquired a post office and became a subpostmistress, [00:21:00] but from day one she was aware that something was wrong with the accounting system. The person who trained her on the horizon system told her that the accounts were always off, and that she should just make up for any shortfalls with money from the non post office part of the business. Uh, that ended up not being as easy as a trainer made it sound, and at one point Seema even had to sell some of her jewelry to make up for horizons discrepancies. Eventually, Sima [00:21:30] was accused of stealing 74,000 pounds. Her court date was set in 2010. She was pregnant with her second child, and coincidentally, she was ordered to appear in court on her first child's 10th birthday.

Greg Kyte: She knew that jail time was a possibility, but she was confident it wouldn't come to that because she knew that she hadn't done anything wrong. That's why she literally fainted when the judge handed down a 15 month jail [00:22:00] sentence. She was imprisoned in the largest female prison in the UK. Actually, it's the largest female prison in all of Europe, where she was convinced her life was in danger, as was the life of her unborn baby. She was at rock bottom and says that the only thing keeping her from committing suicide was the fact that she was pregnant with her second child. She ended up being released after serving four months, and in 2011 she gave birth to her second child while she was still [00:22:30] wearing her electronic probation tag. She had been a pillar of the community but had been disgraced. People in her community labeled her as a thief who stole money from old people, and after her picture appeared on the front page of their local newspaper, her husband got beaten up by a bunch of strangers.

Caleb Newquist: Martin and Gina Griffiths became sub-postmaster and subpostmistress of the Farm Road Post Office in Great Sutton in 1995. [00:23:00] 14 years later, in 2009, they started seeing unexplained shortfalls. By 2013, the shortfalls had accumulated to 57,000 pounds. That same year, armed robbers busted into their store, smashed Martin's head with a crowbar and stole 54,000 pounds out of their safe. Martin and Gina paid more than 100,000 pounds total to the post office in an effort to balance the books wiping out their life savings. Regardless, the Post Office revoked their status as a subpostmaster [00:23:30] and postmistress, citing their failure to manage their accounts and the branch's security properly. And so Martin Griffiths, at age 58, threw himself in front of a bus. Uh, he left a note for his family apologizing and telling them that he loved them.

Greg Kyte: Peter Huxham was a popular subpostmaster from Starcross, a village on the banks of the River exe. He was charged and convicted of stealing 16,000 pounds based on data [00:24:00] from the horizon IT system, and was sentenced to eight months in jail. But Peter's story is a little different in that he didn't question the veracity of the horizon IT system. He assumed that it was correct and that the 16,000 pounds was in fact missing. And since only Peter and his wife Jackie had access to the cash at their branch, Peter, using his powers of deductive reasoning, accused his wife [00:24:30] of stealing all that money. His accusations eventually led to the collapse of their 22 year marriage. As a result of his incarceration and the loss of his marriage, Peter developed an alcohol problem and mental health issues, and he isolated himself from the friends and family, uh, that, you know, he wasn't already estranged from. That's why his body wasn't found until weeks after his death. Weeks [00:25:00] after his death. By that time, his corpse was so decomposed that his cause of death was impossible to accurately identify. But regardless, his death has been treated as a suspected suicide.

Caleb Newquist: But then there was Alan Bates. In 1998 he bought a post office in North Wales, but his contract with the Post Office was terminated in 2003 because of a 1,000 pounds shortfall. As a result, he lost his job, his life savings and [00:25:30] his retirement plan. But Bates refused to accept that the accounting errors were his fault, so he set up a website to find other subpostmasters who were getting screwed, and his story was picked up by Computer Weekly. Bates and his fellow Fucked Over subpostmasters formed an organization called the justice for Subpostmasters Alliance.

Greg Kyte: It was supposed to be called justice for Fucked Over Postmasters, but they even in Britain, that was too far.

Caleb Newquist: Yeah, yeah. They couldn't do it. Yeah, I understand [00:26:00] okay. Anyway, eventually Bates initiated a civil group litigation against the post office. The litigation represented 555 subpostmasters and was settled in 2019 for 58 million pounds total.

Greg Kyte: I so wish it was 666 postmasters, but that it's fine.

Caleb Newquist: Yeah, yeah. Unfortunately the litigants owed 47 million pounds in legal fees, so the difference of 11 million split [00:26:30] 555 ways was just about 20,000 pounds per person. Not nothing, but clearly not enough to adequately compensate for years of lost wages, lost life savings and lost retirement plans, not to mention jail time, lost reputations like the the. Yeah, that 20,000 pounds is not going to make up for all that. No, not.

Greg Kyte: Not by a damn sight.

Caleb Newquist: 100 for hundreds of subpostmasters. Yeah. Arguably the biggest win was that Alan Bates and his cohort brought this entire [00:27:00] problem to light. Politicians started getting involved and more subpostmasters gained the courage to talk about their stories. It eventually came out that although the Post Office received thousands of complaints about the horizon system, their staff was instructed to tell everyone who contacted them that they were the only ones experiencing any problems. So.

Greg Kyte: So it was like, hey, come on. Hey, my system is telling me that, oh, 57,000 pounds. I go, what the fuck are you talking about? It's like, yeah, the first we've heard of it. Like it? If, if, if the system was broken, [00:27:30] don't you think we would have heard from other subpostmasters? This is your problem. Shut up and pay us our money, wanker.

Caleb Newquist: It was also revealed that by 2017, the Post Office knew that the losses it was charging subpostmasters with could be explained by errors in the horizon IT system, or alternately by remote tampering. But the Post Office continued to doggedly pursue subpostmasters, insisting that there is no other explanation for the shortfalls besides [00:28:00] theft and fraud.

Greg Kyte: A public inquiry was launched in 2021, where evidence was heard from the Post Office and from Fujitsu, the company that engineered the horizon system. Since then, overwhelming evidence has been produced showing the fault was with the horizon system and not with the subpostmasters. Starting from the first prosecution until now, over 60 affected subpostmasters have died [00:28:30] waiting for justice, including for suicides. As of this recording, only 95% of criminal convictions related to the horizon IT scandal have been overturned. That means that there's about 45 people still in jail because of glitches in the accounting system implemented by the post office. The British government has set up three different compensation [00:29:00] tracks for those who have been affected by the horizon IT scandal. They don't call them tracks, they call them schemes because they're British. And in Britain, words don't mean what words are supposed to mean. So they call them schemes. Uh, the first scheme was for those 555 subpostmasters that we spoke about earlier. Uh, they're being offered settlements of 75,000 pounds, but many are expected to push for, uh, more. Uh, the [00:29:30] second scheme is that any subpostmaster whose conviction has been overturned is being offered a 600,000 pound settlement. And the third scheme is any subpostmasters who were not convicted or part of the 555 Bates group can receive a fixed payment of 75,000 pounds. Just this year in 2020, for a TV mini series called Mr.

Greg Kyte: Bates Versus, the post office was released, where actor Toby Jones plays Alan [00:30:00] Bates. In real life, the 69 year old Alan Bates is reasonably handsome. Unfortunately, Toby Jones is not. Have you seen the first Captain America movie? In that the bad guy Red skull was played by Hugo Weaving. Uh, he also Hugo Weaving also played Agent Smith in the matrix movies. Uh, Toby Jones, however, played Red Skull's weird looking little sidekick. That's who they cast to play the hero of this story. In [00:30:30] episode 49 of this podcast, we talked about Frank Tyson, who stole millions of dollars from the Roslyn School District in New York. They made a movie about that and cast Hugh Jackman as Frank Tyson. In this one. They cast Toby Jones as Alan Bates. Oof! That's like casting David Cross as me. I mean, I'd still love that. Uh, he's bald with a beard and glasses, so it makes sense. But overall, he's not an attractive gentleman, [00:31:00] and that would hurt my feelings. So cast him as me in a movie where I'm the bad guy. Like where I defraud Caleb Newquist and oh, my fraud the podcast out of millions of dollars. And also you gotta cast Alexander Godunov as Caleb Newquist. You got to because he's a dead ringer for you.

Caleb Newquist: Okay. Greg. Uh, did we learn anything?

Greg Kyte: Uh, I did learn, I learned, I learned [00:31:30] at least a couple of things. Okay. Um, so, uh, so when we were going through the different, uh, anecdotal stories of the different, uh, subpostmasters and subpostmistresses who were affected by this, one of them, uh, possibly the most heartbreaking of them, uh, was Peter Huxman from Starcross. Um, he and one of the things, he was the one who accused his wife of stealing the 16,000 pounds. Um, but, uh, in our research, uh, he [00:32:00] wasn't alone. He wasn't the only one who believed that the horizon system was right and that the money was actually missing. Uh, I found another story about a subpostmistress named Jo Hamilton, who also genuinely believed the discrepancies that she was accused of had been caused by her own, her own mistakes. So she she, on her own volition, pleaded guilty to the charges that were brought against her. Um, because she was she was offered if she had if she [00:32:30] if she pleaded guilty, she would just be on probation and wouldn't have to actually serve the jail time. Um, but she legit believed that. Yeah, she must have made some some big error and owed and that she legit owed all that money. So the thing the thing that I guess was reinforced by that for me, Caleb, was that numbers plus confidence is extremely convincing. So with the post office, they were like, no, the system is there. The system shows these hard numbers that we're shortfalls. [00:33:00] You have to pay it to us because the system is right.

Greg Kyte: Don't fuck with our system. You're a bad person. Pay us the fucking money. It's extremely convincing. And and we usually see that in the other way where people where it's the con man. Because again, con man stands for confidence man. So so you, you're saying, hey, here's these are the right numbers, believe me. And don't be a dumbshit and do what I'm saying or, you know, act accordingly. But but like [00:33:30] I said, whether you're committing the fraud or being accused of fraud, uh, numbers plus confidence, uh, can be very manipulative. Yeah. So there was another thing. Oh, okay. There was. Yeah, there was another thing, uh, that came to mind with a story. Like we said earlier. Uh, there were about 11,000 subpostmasters. Uh, 900 of them were prosecuted as part of the scandal, uh, which is about 8% of the subpostmasters [00:34:00] who were, who were prosecuted, uh, for crimes. But but also in another account that I, that I read, 3500 people were affected by the scandal. That's about 30% of the subpostmasters. And and really that's one of the things and Alan Bates pointed this out. That's one of the main things that made it obvious to anyone like Alan Bates, who was paying attention, that the problem was with the accounting system. And because [00:34:30] how does overnight, anywhere, somewhere between 8% and 30% of all subpostmasters, right, turn evil and start stealing money from the Post Office? Those those numbers don't make sense. Doesn't make.

Caleb Newquist: Any sense.

Greg Kyte: At all. So so that that was kind of an indicator that, like I said, that the people were innocent and that there was a problem with the system. But and this might be horrible to say out loud, uh, but think about [00:35:00] it. Likely there were some subpostmasters, at least a few who were actually crooked and were actually stealing money from the post office while this whole scandal was going down. So. So if that was the case, they they likely got fined and sentenced and sent to jail, which is great because for those people that was justice. But now those same people who were actually stealing money from the [00:35:30] post office and did actually receive justice for crimes they actually committed, are now receiving 600,000 pounds settlements just because they happen to steal at the exact time that a massive IT problem was also happening. That's like that's like getting pulled over. This happened to me a number of times where I've gotten pulled over for speeding. I knew 100% that I was speeding, but then the police officer comes back and like throws my license at me and is like, hey, you got lucky [00:36:00] because I'm getting pulled away on another call. But in this case, he would throw my license at me and also hand me a check for $600,000 as he went off to his other his other call.

Caleb Newquist: Right.

Greg Kyte: So, uh, so basically the other thing I learned is bad guys, uh, theoretically, bad guys could get very lucky, uh, when the circumstances are in their favor, when karma is asleep, bad guys could get very lucky. Very lucky.

Caleb Newquist: Yeah, yeah, you have to. Yeah, sometimes, you know, the the [00:36:30] the glitches in the glitches. There's a glitch and a glitch. Yeah. But then. And then. Yeah. The bad guys win. Yeah. Yep. Horrible terrible terrible. Yeah. Um, anyway. Well any any other, any.

Greg Kyte: Other thoughts you have about.

Caleb Newquist: What have I been thinking about?

Greg Kyte: This case is weird for our podcast. It is.

Caleb Newquist: Weird for our podcast because.

Greg Kyte: It's about fraud, but it's about fraud. It kind of turns it on its [00:37:00] head because it's a bunch of people that got convicted falsely of fraud. Right?

Caleb Newquist: It's about a fraud that wasn't there, right? Yeah. The fraud that wasn't there. Mhm. Might be a title anyway. Yeah I don't know I think. Oh here's something I was thinking about. Let me ask you this. In the research. Did you ever get the feeling that. These postmasters, the sub postmasters were kind of deferential [00:37:30] with the with the exception of clearly Mr. Bates and some others. But like did you get the sense they were deferential to the post office? And so like, you know, you had the examples of the people who were like, yeah, my gosh, if they say, I screwed it up, I must have screwed it up. That to me is there's a there's a certain I think in like, maybe British culture, like there's certain deference for authority and like, you know, kind of like the bureaucracy and like civil servant, civil service or, you [00:38:00] know. Yeah, yeah, public service, those kinds of things. The vibe of that whole thing in the culture of Great Britain is very different than it is in America. Whereas in America, like the trust and like institutions is like and maybe it's just more current, but it's just like it feels like trust in institutions, like there's more skepticism I think. Yeah. Yeah. You know, and so like if it was a similar thing, I don't know, you could probably find a similar American scandal to this, but I don't know, like, I guess [00:38:30] the deference given to the post office in this case is something that kind of surprised. Well, not surprised me, but I think it in some way it, um, kind of rang true that in, in British culture they'd be like, oh, well, you know, they, they're smart people running, you know, these, these, these things. And so they're probably right.

Greg Kyte: And I wonder maybe that's echoes of like the, you know, my, my very, uh, incomplete understanding of British [00:39:00] history, uh, you know, they, it government was a iron fisted monarchy at times. Yeah, sure. Where it's like, if the government says it's this way, then you need to shut up and agree with that, or else things are going to go poorly for you. So I kind of which, which that's, that's more I mean, because I, I, I, I see what you're talking about, about the deference that the subpostmasters showed to the Post Office. But it wasn't that they didn't [00:39:30] because so many of them, like I said, there there was there was literally thousands of subpostmasters who called the Post Office and was like, there's problems with the system. Oh, okay. And they and they shed. But but that's the thing. So, so there was an initial questioning going, hey, this is showing shortfalls. I'm not mishandling my money like this. Something's wrong. And this and the post office was like, shut up, the system is good. You're wrong. Pay us the money. Here's what the contract says. Do it. And so and then that's when they were like, [00:40:00] okay, I guess I got to do that. So like I said that that that's more, you know, we were the ones who were like, you know, throwing tea into the Boston Harbor, uh, to, to stick it to, to, uh, which, which, which king was that?

Caleb Newquist: That was King George the Third.

Greg Kyte: That's King George the third is who that was. Uh, so we were sticking it to we were sticking it to the King. Whereas in a lot of British history, it seems like the king was sticking it to the people. And that, like I said, [00:40:30] maybe that explains part of the cultural differences between that you're talking about between the US and Brits.

Caleb Newquist: Yeah, maybe it could be maybe exciting. I mean, it's I mean, it's it's obviously tragic when, like, people are falsely accused and it it ruins people's lives. Yeah. It's just like, it's fucking. It's just gut wrenching, you know? Yeah. About that stuff.

Greg Kyte: Yeah.

Caleb Newquist: Well, and, um, and.

Greg Kyte: As an epilog, I mean, there now that. And it's so funny how this, uh, this.

Caleb Newquist: There's [00:41:00] cases still unresolved.

Greg Kyte: Right? There's cases still unresolved, but this mini series, this, this pop culture event is the thing that's bringing this to everyone's attention. And there is outrage, uh, in the United Kingdom against the government that they have. Not that that it happened, that it happened for so long that the that the post office was so entrenched in its stance that they were, you know, above reproach [00:41:30] with their system. Um, and now that it now that it's clear that it's that things are messed up. Why, why, why, why doesn't everybody have all the compensation yesterday for the tragedies that have happened.

Caleb Newquist: Made whole and then some because.

Greg Kyte: You can't talk about I mean, it doesn't take long about talking about people stepping in front of busses and, and, uh, getting their marriages, their 22 year marriages ruined by this. Before you just go. Yeah, this is in this this is a this is a [00:42:00] tragic miscarriage of justice or.

Caleb Newquist: Or pregnant women in prison. Uh, yeah. All of.

Greg Kyte: It. Yeah. Hard.

Caleb Newquist: Uh.

Greg Kyte: All right, that's it for this episode. Remember, if you're into BDSM and you were having an affair with a woman who was a sub, but you're not having that affair anymore. The person you were having the affair with is technically a sub postmistress.

Caleb Newquist: Very nice. Very nice. And also remember, if you ever make [00:42:30] a movie based on a real life fraud, justice has been perverted. If the bad guy is played by Hugh Jackman, or if the good guy is played by Toby Jones.

Greg Kyte: If you want to drop us a line, send us an email at Omi. Fraud at earmarks cpcomm. Caleb. If people just want to get a hold of you and cut me out, how can they do that?

Caleb Newquist: Uh LinkedIn. Forward slash Caleb Newquist. If people want to cut me out, which they often do, how would they get Ahold of you? [00:43:00]

Greg Kyte: Uh. Same thing. Go to LinkedIn. Uh, I'm Greg Kite, CPE on LinkedIn. Look for look for a CPE, CPE, CPE. You know, CPA, I do a lot of CPE, but I'm CPA. Look, for the guy who's vaguely similar to David Cross. David Cross, that'd be me. Right?

Caleb Newquist: Okay. Oh My Fraud is written by Greg Kite and myself. Our producer is Zach Frank. If you like watching these podcasts, you can watch them on YouTube or [00:43:30] listen to them on YouTube, whatever you want to do, but just know if that's how you like to consume podcasts, go to YouTube. Find oh my fraud. Listen there. Some people like it though.

Greg Kyte: If you like listening to this podcast, who knows? You might also like watching this podcast. And you're in luck, because this podcast is on YouTube. Go on there. Search on my fraud. You'll find it, you'll like it. You'll be hooked. It's like the Joe Rogan Experience, just not dumb rate. [00:44:00]

Caleb Newquist: Review and subscribe to the show wherever you listen to podcasts, including on YouTube. If you listen on earmark, though, you can get CPE. You can't get CPE on YouTube.

Greg Kyte: So you could you could well, you could watch it on YouTube and then take the quiz on the earmark app. And you nailed it.

Caleb Newquist: Oh, see? Look easy Greg Kite. Greg Kite everybody I'm a.

Greg Kyte: Power user of the earmark cp app. I've got I it's I'm six months early and I've already got all my CPE done for my two year, uh, reporting period. [00:44:30] Wow. Thank you. Thanks.

Caleb Newquist: Earmark CPE be like be like Greg Kite, CPA, CPAs.

Greg Kyte: Cpas, CPA Greg Kite, CP Cpps.

Caleb Newquist: Join us next time for more average swindlers and scams. From stories that will make you say.

Greg Kyte: Oh my, oh my fraud, oh my fraud.

Caleb Newquist: Oh my fraud.