The scheme, which was being widely used to provide IT training, allowed training companies to register, with minimum vetting, to use the ILA Web site. Once they had use of the site, these companies could get hold of the £200 available for each individual learning account by entering a code number provided to people eligible for the government money. The ILA numbers were too tempting for some fraudsters to resist.
Numerous training companies have told Computer Weekly that they were illegally offered lists of ILA numbers for cash.
Some were acquired by street conmen who convinced people to sign them over for promised training. Others were gained by bribing employees of training companies. Worse still, question marks remain over the security of the Web site used by training providers to claim payment from the Government.
However they were obtained, ILA numbers were a valued currency to fraudsters - lists of hundreds were being touted about the black market to rip off the Government's training scheme. Millions of pounds of public money may have been lost.
The ILA fiasco has begun to unravel. But perhaps more worrying is that the scheme is one of a huge number of online projects across central and local government.
Let's hope it represents the exception rather than the rule in the Government's approach to online fraud protection.