'BT in call centre fraud to ensure winning £1billion business contract'

Staff made millions of 'false' calls on auto diallers to make sure bonus-linked performance targets were met under a lucrative contract handling calls from Ministry of Defence bases.

The fraud had been going on for at least four years and involved staff phoning themselves to ensure calls were answered under the time allowed.

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An examination of phone records found one operator who would normally handle 100 calls in an eight hour shift was logged as handling 412 calls in just over one hour.

A tip off to the MoD in 2004 about the scam was passed to BT to investigate at a time when the contract was up for renewal, the tribunal in Leeds heard.

But Joseph Hewson, a former BT manager sacked over his role in the phone fraud, said the internal inquiry which concluded there was no case to answer was a 'sham' and the company was determined nothing should affect the big money deal.

The contract was renewed in April 2005 and six months later when another tip led to a second investigation the fraud was exposed, leading to five BT managers losing their jobs.

Mr Hewson was one of them and has taken BT to a tribunal claiming unfair dismissal.

The former manager at the company's Wakefield centre in West Yorkshire insists he was carrying out orders to make false calls and instruct other operators to do the same.

The fraud involved four call centres at Wakefield, St Helens on Merseyside, Dumbarton in Scotland and Kettering, Northamptonshire.

Mr Hewson said: "In June 2004 when an anonymous informant caused the first investigation to take place upon the instruction of the MoD this was at a time when the contract was in the renewal phase.

"This renewal was worth over a billion pounds to BT and so they could not let anything affect it."

He said 'surprisingly' the investigators concluded there was no evidence to substantiate the allegations.

Mr Hewson said he had not been aware of the first inquiry, describing it as 'simply useless' and 'an absolute sham.'

The tribunal heard the scam became so sophisticated that computerised auto-diallers were installed at the call centre to generate large numbers of false calls.

Giving evidence yesterday Mr Hewson said: "Everyone in every centre was fully aware that auto-diallers were being used.

"I was fully aware that auto-diallers were there and being used. I knew it was wrong and every single other person knew it was wrong. I couldn't do anything to stop it."

Mr Hewson said the 'bullying culture' within BT was so bad it was impossible to speak out or refuse to organise the false calls.

He said the company were after 'scapegoats' and other managers aware of the fraudulent activity had not been disciplined in the same way.

BT does not accept Mr Hewson was forced into cooperating with the scam and insisted his dismissal over the fake calls fraud was justified.

Earlier this week Anne McHugh, 28, one of the other sacked managers, lost her case for unfair dismissal at a tribunal in Liverpool.

The hearing was told the alleged fiddle may have cost the taxpayer up to £8 million while BT saved itself a further £2 million in penaly payments.

The Ministry of Defence said a 'thorough and wide-ranging investigation' had been carried out into the 'artifical inflation' of target-linked 'successful' calls and compensation would be paid.

The statement added: "The MoD and BT are now in the final stages of a full and detailed review of the scale and value of the reparation payments - these payments will cover not only the specific financial losses incurred, but also the costs to the department of the time and detailed work involved in this protracted investigation."