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This publication is available at https://www.gov.uk/government/publications/national-fraud-initiative-case-studies/nfi-public-sector-case-studies
The following case studies illustrate the type of fraud the National Fraud Initiative (NFI) can help organisations identify. Find out more about additional services available to public sector organisations.
1.1 London Borough of Harrow and Luton Borough Council (NFI 2012/13 exercise)
A payroll-to-payroll match identified an employee who was working full-time in a middle management position, in addition to a part-time night care worker role dealing with vulnerable adults. During the investigation it was established that in some weeks she worked in excess of 70 hours potentially placing vulnerable adults at risk.
There was a suspicion that she had been able to work both shifts on a weekly basis by sleeping whilst at work and the information shared between the authorities showed that she regularly breached the Working Time Regulations.
After investigation, she was found guilty and dismissed for gross misconduct by one authority and subsequently disciplined by the other authority for breaching the Working Time Regulations, but later resigned from the role.
1.2 South Bucks District Council (NFI 2010/11 exercise)
A NFI housing benefit to payroll match resulted in an NHS employee receiving a 6 month suspended sentence after it was discovered she had fraudulently claimed more than £7,000 of benefits.
The investigation of the match by South Bucks District Council revealed she had been working as a full-time senior staff nurse while claiming and receiving housing and council tax benefit. Her salary had been paid into a bank account which she had not revealed to the council.
In addition to receiving a suspended sentence the woman was ordered to repay the benefit overpayment.
1.3 Tendring District Council (NFI 2010/11 exercise)
A NFI housing benefit to payroll data match showed that a Tendring District Council employee had failed to declare that she had been working for the Council for just under 2 years while claiming housing and council tax benefit payments.
Investigation of the match revealed that not only had she been employed at the council but that she had also had another job that she had failed to declare. She had also maintained 2 bank accounts in an attempt to conceal the payments from the housing benefit team. She admitted that she was aware additional income would affect her award of housing and council tax benefit. She resigned from her post and was prosecuted.
She was sentenced to a 21 day prison term, suspended for 12 months, and had to perform 100 hours unpaid work. She agreed to repay all overpaid benefits (just under £9,000) and was required to pay £375 in prosecution costs.
1.4 Liverpool City Council (NFI 2008/09 exercise)
Investigation of a housing benefit to payroll NFI match identified a council employee who had illegally claimed £40,000 of housing and council tax benefit for 9 years, between 1996 and 2005, while owning a £500,000 property portfolio.
Following an investigation by the council’s Internal Audit and Benefit Fraud Team the individual was taken to court and pleaded guilty. They had a confiscation order of £100,000 imposed and were ordered to repay over £10,000 in costs.
The individual, who was employed as a social worker, resigned from her position whilst under investigation by the council.
2.1 Coventry City Council
Follow up of an NFI data match found that the council had employed a care assistant since 2006 who had no right to remain or work in the UK. Investigations revealed that staff records contained a letter from the Home Office purporting to grant the assistant indefinite leave to enter and work in the UK. The council had followed its vetting procedures for staff but this letter was a forgery, which the council could not have detected under its normal checks on staff. The letter was dated the same date that the Home Office had dismissed an appeal from the person. The care assistant pleaded guilty at court and received a 6 month prison sentence suspended for 2 years.
2.2 London Borough of Merton
Follow up of an NFI match by the London Borough of Merton revealed that the council had unknowingly employed someone since 2003 with no right to remain or work in the UK. Employment vetting procedures had been followed, but these checks did not reveal that the letter the employee had produced confirming their entitlement to work was a forgery. The employee was asked to produce additional confirmation of entitlement to work, but was unable to do so. As a result of the investigation the employee was dismissed and deported by the Home Office. The council is now looking at the potential to recover tax, National Insurance and pension contributions which could equate to up to 40% of the total employment costs.
2.3 The Whittington Hospital NHS Trust
A payroll to in-country immigration match revealed that, in 2008, an employee of South West Essex Community Services (SWECS) had used false documents to obtain employment as a health care assistant. The match was identified by local counter fraud specialists at North East London NHS Foundation Trust (NELFT) which acquired SWECS in 2011.
Investigations revealed that the employee had falsely claimed he had right to work in the UK on his application form. He had also submitted a fraudulent letter which was supposed to have been sent to him by the Home Office stating there were no restrictions on his right to work in the UK.
This letter was confirmed as fraudulent by a Home Office intelligence officer. A warrant was subsequently issued for his arrest by Essex Police after he failed to attend court. He was dismissed from NELFT after the court hearing was held in his absence. NELFT has since been informed by the Home Office that the former employee has left the UK.
2.4 Yorkshire Ambulance Service NHS Trust
The trust investigated an NFI match between payroll and UK visa data and found that an employee had worked for the Trust for several years and been paid over £190,000, despite having no right to work in the UK. Investigations by the Trust’s Local Counter Fraud Specialists and the Northern & Yorkshire regional team of the NHS Counter Fraud Service showed that his visa and passport were forgeries.
It was also found that the individual was claiming asylum support stating that he was not working and did not have any income. Following arrest and interview, he absconded from the country before attending court. The employee’s wife was also discovered to have no right to reside or work in the UK, but was working for a local employer having deceived that employer who believed she had entitlement to work in the UK. The Trust is seeking to recover the tax, national insurance and pension contributions wrongly paid.
3. Trade creditors
3.1 Northumberland County Council (NFI 2010/11 exercise)
The NFI trade creditor matches helped Northumberland County Council recover approximately £150,000 duplicate creditor payments. Investigation of the matches highlighted issues with invoice input processes in outlying departments at a time the council was undergoing significant restructuring.
The council immediately introduced a new standardised procedure, including a quarterly monitoring process set up by their internal audit department, designed to prevent future duplicate payments.
3.2 South Tyneside Metropolitan Borough Council (NFI 2008/09 exercise)
By adopting an effective and coordinated follow up of NFI trade creditors matches, South Tyneside Metropolitan Borough Council found a number of duplicate creditor payments, which it is in the process of recovering. South Tyneside has addressed the control issues that the duplicate payments brought to light to reduce the probability of a repetition.
4.1 NHS Business Services Authority (NFI 2012/13 exercise)
The NHS Business Services Authority (NHSBSA) administers ongoing payments made to NHS pension scheme pensioners through its contract with a third party pensioner payroll administrator.
The NFI has developed and introduced a web application where local authority housing benefit investigators can more easily request further information from the NHSBSA when an individual is receiving both housing benefit and a NHS pension.
This feature allows the NHSBSA to more effectively manage requests and responses from local authorities regarding the actual income levels of housing benefit claimants and also enables housing benefit investigators to progress overpayment cases speedily to reduce the overall level of fraudulent claiming.
The NHSBSA is also using NFI’s 6-monthly deceased matching service against its current pensioner records to stop scheme payments being made where necessary.
4.2 Peterborough City Council (NFI 2010/11 exercise)
A NFI match between housing benefit and armed forces pension data helped Peterborough City Council secure a conviction against a man who had fraudulently claimed over £16,000 in housing and council tax benefit. The man had failed to declare he was receiving an Armed Forces pension when completing the application.
The man pleaded guilty to benefit fraud and was given a 3-year conditional discharge and ordered to pay the money back.
4.3 Civil Service Pension Scheme (NFI 2008/09 exercise)
As a result of the NFI pensions to deceased person’s data matching, the Civil Service Pension Scheme identified a pensioner who had died in January 2007. Upon investigation, it was found that the scheme had not been informed of the death but had been contacted in June 2007 to amend bank account details and divert the pension payment into a different bank account. This was actioned after all the appropriate security checks had been completed. The pension has been suspended and the case forwarded to the police for investigation. The total overpayment equated to around £6,300.
4.4 Armed Forces Pensions (NFI 2008/09 exercise)
As a result of the pensions to deceased persons’ data matching the Armed Forces pension scheme identified a pensioner whose death they had not been informed of. The overpayment totalled nearly £19,000 and the pension scheme was able to recover almost £13,000 from the pensioners bank account. However the remaining £6,000 had already been withdrawn from the account via an ATM machine. The case has been passed to the police for investigation.
4.5 Wakefield Council (NFI 2008/09 exercise)
Investigation of a NFI housing benefit to payroll pensions match by Wakefield Council found that a housing benefit claimant had been in receipt of an Armed Forces pension which commenced in 1987, but which he had not declared. This resulted in the claimant receiving over £22,000 worth of benefits that he was not entitled to. The claimant pleaded guilty in court and was sentenced to 80 hours community service and ordered to pay £100 costs. The judge also applied a curfew order. The overpayment is being recovered from ongoing benefit.
4.6 East Homes and London Borough of Lambeth (NFI 2012/13 exercise)
Matching housing tenancy data highlighted an individual who appeared to have tenancies with both East Homes and the London Borough of Lambeth.
Officers from Lambeth questioned the tenant and confirmed that he had accepted a tenancy from East Homes. The reason he gave was that he had felt that his current property was too small and the application for rehousing with Lambeth was taking too long. He admitted that he had not informed Lambeth about the change in his circumstances as he knew it would affect his application.
The tenant pleaded guilty to charges of knowingly withholding information required in connection with his application. Lambeth recovered their property and the tenant was fined £525 and ordered to pay a contribution of £733 towards prosecution costs and a victim surcharge of £15. When sentencing, the Judge said
This is an unpleasant offence in that you gave information which suggested you were in high priority. This deprived other families of accommodation.
4.7 Harrow Council (NFI 2010/11 exercise)
A NFI housing tenancy data match led to the conviction of a tenant for unlawfully subletting a council house in Wolverhampton to her adult children, whilst also renting another property in Harrow, North London.
Investigation of the match revealed that the tenant was first assessed to be homeless by Harrow Council in 1997. She was placed on the housing waiting list and housed in temporary accommodation. Unbeknown to Harrow, she also registered as homeless in Wolverhampton in 2005, and was given a tenancy in October 2005. She did not inform Harrow and continued to be placed in temporary accommodation until she was granted a tenancy in 2006. She continued to visit Wolverhampton to mislead housing officers that she was living there.
She admitted to having 2 tenancies and was given a 9 month suspended sentence for obtaining services by deception. She was also suspended from her public sector job. The keys to the property in Wolverhampton have now been handed back and Harrow Council have been awarded possession of the other property in recent civil proceedings.
Justin Phillips, Anti-Fraud Manager at Harrow Council said:
I think what this case illustrates is that fraudsters cannot benefit from their criminal activity in relation to housing fraud. Not only was she convicted of fraud in a Crown Court, so she has that conviction on record for the rest of her life, but she has also been forced to give up precious council tenancies that she should never have had in the first place. We are working hard in Harrow to make sure housing goes to those who need it most.
4.8 Broxbourne Housing Association (NFI 2010/11 exercise)
A NFI housing tenancy data match enabled Broxbourne Housing Association to successfully recover a 3 bedroom home.
Investigation of the match indicated that their tenant held a second tenancy with another housing association. It established that the tenant had actually purchased the property from the other housing association. Local residents also confirmed that the individual was not living in the property owned by Broxbourne HA.
The tenant could not provide a satisfactory explanation for the Broxbourne tenancy so a possession order was obtained which meant the much needed 3 bedroom home could be reallocated to a genuine tenant.
4.9 Wolverhampton Homes (NFI 2010/11 exercise)
A NFI Right to Buy to housing tenancy data match led to the recovery of a tenancy by Wolverhampton Homes. Investigation of the match indicated that a tenant had previously obtained a property through the right to buy scheme.
As part of the investigation the tenant was interviewed and, when confronted with evidence, admitted putting false information on his housing application to obtain another property.
The tenant agreed to terminate the tenancy and the 3 bedroom home can now be reallocated to genuine tenants.
4.10 Salford City Council (NFI 2008/09 exercise)
Salford City Council and the Department for Work and Pensions (DWP) are in the process of recovering approximately £33,000 of overpaid benefits as a result of investigating an NFI right to buy to housing benefit match.
The housing benefit claimant had originally purchased a property under the right to buy scheme in 2005. The applicant obtained a mortgage from the private sector. The claimant then made an application to re-mortgage the property for a sum much higher than the initial purchase price.
In both mortgage applications he declared income that had not been declared on both his housing benefit or DWP applications.
Subsequent investigations revealed that the claimant had used his son’s identity and National Insurance number to gain the undeclared employment fraudulently.
Investigators were able to prove that he was known to his employers under his son’s name by showing them a photograph of the claimant.
At an interview under caution the claimant admitted that both his and his wife’s employment had not been declared, that he had not declared all of his bank accounts or an adoption allowance. The claimant also admitted to falsifying his identity.
The claimant pleaded guilty in court on 24 June 2009. He was given a 12 month prison sentence suspended for 2 years, a community punishment order with an unpaid work requirement of 200 hours and also had his mobility car taken away.
5. Housing Benefit
5.1 London Borough of Barking and Dagenham (NFI 2012/13 exercise)
A match between payroll and housing benefit data identified a man who had failed to declare his employment with Transport for London whilst claiming housing benefit from the London Borough of Barking and Dagenham. The man had also made false declarations about his fitness for work in statements made to the Department for Work and Pensions and about his status when applying for subsidised school meals for his children.
As a result of the investigations the man was sentenced to 8 weeks in prison for fraudulently claiming £15,000 in housing and council tax benefit and Employment Support Allowance.
5.2 Royal Borough of Kensington and Chelsea (NFI 2012/13 exercise)
A woman who falsely claimed more than £26,000 in housing and council tax benefits from the Royal Borough of Kensington and Chelsea was sentenced to 6 months in prison at Hammersmith Magistrates Court.
She had initially made a claim for benefits in 2010 on the basis that she was engaged in part-time work. Following a National Fraud Initiative referral, council investigation officers established that she had failed to declare that she was employed by the London Borough of Camden on a full-time basis since 2007; making her claim false from the outset.
The claimant pleaded guilty to 4 charges of benefit fraud and was sentenced to 6 months in prison for each charge, to run concurrently. A custodial sentence was given as a result of her receiving a caution for the same type of offence 2 years earlier.
5.3 Anonymous (NFI 2012/13 exercise)
Matching council payroll and housing benefit data highlighted a councillor who appeared not to have declared their full income from earnings when making a claim for housing benefit. During the investigation they admitted not declaring council allowances and part-time work. The claimant was prosecuted at the local Magistrates Court, found guilty and fined £290, which included costs and surcharge. They were made to repay the overpaid benefit. The councillor has now resigned from the council.
5.4 Oldham MBC (NFI 2010/11 exercise)
A NFI housing benefit to licensed taxi driver match enabled Oldham Council to identify a taxi driver who had fraudulently claimed more than £21,000 in housing and council tax benefits.
Investigation of the match by the council confirmed that, while claiming benefits between 2007 and 2009, and having told the council that he was too sick to work, he had held a private hire taxi licence since 2006. The Council’s Licensing Department confirmed that he had worked for a number of private hire firms in Oldham since 2006.
He was prosecuted and pleaded guilty to 3 counts of failing to notify the authorities of a change in circumstances. He was ordered to pay back all of the benefit overpayments, given an 8 month prison sentence, disqualified from driving for 3 months and ordered to carry out 80 hours unpaid work in the community.
5.5 Brighton & Hove City Council (NFI 2010/11 exercise)
A NFI match between housing benefit and market trader licence records resulted in a street trader being sentenced to 9 months in prison for benefit fraud. As the result of the investigation of the match, Brighton and Hove City Council and DWP investigators were able to secure a conviction against the man who had claimed over £80,000 in benefits while running a mobile food van with turnover of £30,000 a year.
In addition to securing a conviction, the council are taking action to recover the full amount of housing and council tax benefit fraudulently claimed.
5.6 Blackburn with Darwen Council (NFI 2008/09 exercise)
Investigation of an NFI match found that a benefit claimant had failed to disclose income being received from an NHS pension which had been paid since 1998. Fraudulent claims amounting to £33,000 had been paid as a result of the deception. The fraudster was prosecuted by the council and received a prison sentence of 8 months suspended for 2 years.
5.7 Harrow London Borough Council (NFI 2008/09 exercise)
A NFI match revealed that a care assistant had been working in a day centre with vulnerable adults since 2005 but had no right to work in the UK. She had entered the country on another person’s student visa. The assistant had also been paid £39,000 in housing and council tax benefits. The person was dismissed and the council is pursuing recovery of the benefits overpayments.
5.8 London Borough of Lewisham (NFI 2008/09 exercise)
Matching by the NFI of housing benefits data to payroll records revealed an employee at an NHS Trust who had been claiming income support, housing benefit and council tax benefit for a number of years and not declaring her employment income. At an interview under caution, the employee explained that she couldn’t afford her rent or place her child into a nursery or child care as she had debts amounting to £27,000. The overpayments relating to this case are in excess of £50,000. The claimant pleaded guilty in court in February 2010 and has been sentenced to 280 hours community service.
5.9 Gedling Borough Council (NFI 2008/09 exercise)
Gedling Borough Council identified a fraud of £34,000 through investigation of 1 of their NFI housing benefit to housing rents matches. The case highlighted several incidences of fraud over an 11 year period. Initially, the claimant applied for both Housing Benefit and Council Tax benefit without declaring that she was related to the landlord. She then later failed to reveal to the council that she had vacated her registered address and was residing with her partner elsewhere. She was also in receipt of income support at the time of the move, but had not informed Department for Work and Pensions of the change in circumstance which would have affected her income support entitlement.
The claimant was prosecuted and ordered to repay the £34,000 she had received fraudulently. In addition, she was given an 11 month custodial sentence suspended for 2 years, ordered to do 180 hours of community service and received a 4 month curfew.
6. Council tax
6.1 Norwich City Council and Norfolk County Council (NFI 2008/09 exercise)
Norwich City carried out a joint working initiative with Norfolk County Council to investigate their NFI council tax to electoral register matches. The councils investigated over 1500 matches and identified nearly 850 households who were wrongly claiming the 25% single person discount on their council tax bills. As a result the city council is recovering a total of £280,542, as well as preventing further losses being incurred had those erroneous discounts continued.
6.2 Solihull Metropolitan Borough Council (NFI 2008/09 exercise)
By following up NFI matches between council tax and electoral registration data Solihull MBC identified a significant number of residents who had been receiving single person discount inappropriately. The council has not only withdrawn over £160,000 of discounts, but it has also investigated how long the discounts had been awarded wrongly. As a result it found that many residents had been wrongly receiving discounts for at least a year, some for over 5 years. These further investigations have enabled Solihull to identify an additional £90,000 for recovery.
6.3 Haringey Council (NFI 2008/09 exercise)
The NFI’s council tax to electoral register data matching is primarily designed to identify inappropriate single person discounts. Haringey Council has not only found over 500 discounts that had been wrongly awarded but in some of these cases it has also identified significant overpayments of housing benefit. This has resulted in a number of individual cases where combined benefit and discount overpayments of between £2,000 and £5,000 are being recovered. This is a good example of council departments working together on NFI matches and has significantly contributed to increasing the council’s tax base by nearly £1 million from this exercise so far.
6.4 London Borough of Brent (NFI 2008/09 exercise)
As part of their investigations into their NFI Council Tax Single Person Discount matches the London Borough of Brent reviewed cases and visited some properties to confirm residency. As a result the council identified 1,200 people who were wrongly claiming Single Person Discount, some fraudulently. They have identified council tax underpayments, for 2009 to 2010 and previous years, of £800,000, which are now being recovered. It is also estimated that the Council Tax base has been increased by over £300,000.
A number of the matches highlighted related to local government employees. In one case, a relatively senior employee had failed to declare that he had been living with another person for 3 years. He had also failed to pay his Council Tax during this period so was in arrears. The single person discount obtained was in excess of £1,000, and is currently being recovered. Enquiries made as a result of the match led to the employee being dismissed for gross misconduct. As a result of this work the NFI Team are piloting this match at a number of local authorities. If this is successful it will be rolled out across the country.
7. Transport: blue badges and concessionary travel
7.1 London Borough of Bromley (NFI 2010/11 exercise)
A NFI blue badge to deceased persons’ records match resulted in a woman being convicted of fraud and fined £181.
As a result of the match, London Borough of Bromley’s parking services team put the badge on a hot-list for traffic wardens and, when the woman challenged 2 penalty notices she had received, they were able to confirm that she was using the badge that belonged to her deceased mother. When questioned by the fraud team, she admitted using the badge on 2 occasions.
7.2 Birmingham City Council (NFI 2008/09 exercise)
As a result of investigating their NFI blue badge to Department of Work and Pensions deceased matches, Birmingham City Council has made improvements to the way that the badges are administered. The review of the NFI matches found 6 cases where applications had been made either following the death of the holder or where an application had been made prior to the death of the holder, but the badge had been collected afterwards. In one case, the application for the badge had been made 2 months after the death of the badge holder and the police were called in to investigate. No prosecution was undertaken and the matter was dealt with informally by the police, but the case highlighted the need for an improved system for administering badges.
7.3 Portsmouth City Council (NFI 2008/09 exercise)
A review of a NFI concessionary travel matches found that a husband had claimed travel tokens on behalf of his wife for at least 7 years despite the fact that she had died in 1991. The authority has recovered the remaining travel tokens and the value of the previous years’ tokens.