Fujitsu puts hundreds of entrepreneurs in jail

Chronology

2024: Fujitsu puts hundreds of entrepreneurs in jail

In early January 2024, it became known that in Britain hundreds of entrepreneurs were prosecuted and ended up in prison due to problems with accounting. Subsequently, it turned out that the incorrect operation of the Fujitsu IT system led to errors in the balance sheet documentation.

According to TechCrunch, the scandal, which lasts almost a quarter of a century (by the beginning of 2024), is associated with the activities of the British Postal Service. More than 700 branch employees have been illegally charged with fraud, falsification of records and theft. Many of these workers were imprisoned, lost their livelihoods and faced bankruptcy.

Hundreds of entrepreneurs prosecuted and jailed over accounting issues

The investigation showed that the problems are related to the incorrect operation of the computer system, implemented to automate the payment of social benefits. We are talking about software called Horizon, which was developed by the British firm International Computers Limited (ICL). This company came under full ownership of Fujitsu in 1998. The scandal was followed by a lengthy private inquiry and the High Court ruled Horizon's platform was "not robust and sustainable."

Despite the hype, the British government signed 107 contracts with Fujitsu worth £4.5 billion ($5.71 billion at the exchange rate as of January 18, 2024) from January 2020 to the end of 2023. Moreover, about £2.4 billion ($3.05 billion) went on the further development of the Horizon system. In this regard, the Fujitsu software scandal in early January 2024 began to flare up with renewed vigor.

Obviously, Fujitsu faces serious questions that require an answer. If it turns out that the company knew about the scale of what was happening, the consequences must correspond to the damage caused, "said Jonathan Reynolds, a member of parliament from the Labor Party.[1]

2022: British mail workers jailed for data breaches to be paid compensation

In mid-March 2022, the UK reported an increase in compensation for postal workers wrongly convicted of fraud as a result of a failure of the Fujitsu Horizon IT system.

According to the publication The Verge, between 2000 and 2014. 736 employees went on trial, each of whom was charged with embezzlement of tens of thousands of pounds. Failures in the Fujitsu Horizon IT system led to the fact that part of the incoming funds disappeared, which caused cash shortages for individual employees of the departments. So, the management and the court considered such data to be evidence of the guilt of the workers.

UK mail workers were jailed for data breaches and there was actually a glitch in Fujitsu's IT system

Some workers were sent to prison, others lost their livelihoods and housing. Many workers went bankrupt, some had their marriage destroyed in connection with the incident, and some died before the situation cleared up.

Previously, victims of an error in the IT system have already been given to prove their innocence. Then the court acquitted 555 employees and ordered them to pay compensation.

The government said it would launch a new compensation scheme for those taking legal action against the Post Office over the breaches.

While this cannot relieve years of misery, postal workers who have suffered terribly because of the Post Office Horizon scandal deserve fair compensation, "Prime Minister Boris Johnson said. "That is why we will introduce a new compensation scheme for those who have led and won a court case over this incident so they can receive their fair compensation.

The British Postal Service until recently hid the problem with the Fujitsu Horizon IT system, although in fact the management and legal department of the service already knew about the vulnerability. The company plans to replace the problematic software with more reliable software. The company has sought help from the British government to settle all compensation for two decades of false embezzlement allegations.^[2]

2021: Management was aware of the fundamental flaws in the Post Office IT system - details

In mid-February 2021, a former Fujitsu employee who worked on the British mail IT system said that the company's management knew about the fundamental shortcomings of the system even before it was launched. According to the developer, the Horizon IT system, which caused a serious scandal, "should never have seen the light of day."

Hundreds of Post Office employees were wrongly accused of fraud and falsifying records until the Supreme Court proved in 2019 that the Post Office's IT service, launched in 1999 and used in an updated version so far, was to blame for the errors. The judge found Horizon's IT system was prone to errors that affected the accounts of individual mail workers. Some were prosecuted and jailed, others lost their jobs and savings.

Fujitsu management knew about problems in the British mail system created for £1 billion

The Horizon project has been criticized since at least 2000 for errors in the system that press reports said could have resulted in dozens of job losses, unreasonable prison sentences, bankruptcies and one documented suicide. The implementation of this postal system is considered the largest failed IT project in Britain. The cost of it exceeded £1 billion. The technology was developed by Fujitsu.

A former employee of Fujitsu reported that from 1998 to 2000 he worked under contract on the Horizon project. He claims that his management was well aware of the problems of the IT system many months before its launch. The developer asked journalists to remain anonymous, but noted that he was ready to testify under oath to lawyers acting on behalf of the affected postal workers.

According to the developer, the Horizon Epos system was originally created without the necessary design documents, expert assessments and coding standards.

Ex-Fujitsu employee: Horizon Epos system for Post Office was originally created without the necessary training

As far as I know, no one in the team had the appropriate education and qualifications. None of them had previously worked on such major projects. They just didn't know how to make it, "he noted.

At the same time, senior Fujitsu managers knew that an important element of the Horizon system did not work correctly and could not be fixed. For the first 10 years of Horizon's existence, transaction and billing data was stored at terminals in mail branches and then uploaded to a central database via ISDN. The developer claims that this part of the system simply did not work.

Many entries made simply did not make sense, because mail did not have a data dictionary, did not have an API that ensures the integrity of messages. Each employee made records in their own way, and the system was not able to take them into account.

2019: Ex-Fujitsu engineer's Supreme Court appearance

In 2019, former Fujitsu engineer Richard Roll appeared as a witness before the Supreme Court:

The Horizon system had many coding errors. In addition, these errors may have affected transaction data and caused financial discrepancies in the Horizon system at the branch level.

Roll's testimony, which was accepted by the judge, suggests that Horizon's problems, revealed by an anonymous source, had not been resolved by the time the system was launched. The developer said he informed his superiors at Fujitsu about the extent of Horizon Epos' system problems, but his reports came to nothing.

2015: The Money Payment Program is a possible cause of problems in the IT system

In 2015, the Computer Weekly portal received a message from another anonymous source, who cited the cash payment program as a possible cause of serious problems at post offices. He reported that post offices were aware of the risk of data corruption due to an asynchronous communications system that was used to forward messages between branches and Horizon's central system.

2012: Engaging Second Sight to Investigate IT System Issues

In 2012, the research firm Second Sight was brought in to conduct an independent investigation. Its confidential report described the Horizon system as "not meeting its objectives." Lead researcher Second Sight claimed there are about 12,000 communications failures on the system each year due to software defects and unreliable hardware.^[3]

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