At least £15m has so far been discovered to have been stolen from the government through its online tax credits system, and the final figure may top £100m.
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The theft figure is a result of an investigation into how fraudsters stole money from the tax credits system using the stolen identities of at least 13,000 people.
Fraud using the identifies of staff working on the payroll of the Department of Work and Pensions, including Job Centre staff, was discovered late last year and now a similar fraud using the identities of Network Rail staff has been revealed.
The stolen identities were used by the fraudsters to set up fraudulent bank accounts using the payroll information, including names and addresses, national insurance numbers and other details.
After making false claims for tax credits via the government’s on-line site, the money was paid into the fake bank accounts for up to two years before the government discovered the fraud.
The on-line system had been set up for the 2003/04 tax year, and the fraud was discovered at the end of 2005.
In an appearance before the Public Accounts Committee, David Varney, chair of HM Revenue and Customs, revealed that prosecutions had so far been linked to £15m in stolen tax credits.
He was unwilling to speculate on reports that the final figure could be well over £100m.