Police are investigating allegations that prison officers, governors and administrators stayed at each other's homes while charging the Home Office for overnight subsistence. Other officers are accused of falsifying expenses claims for hotel stays made while attending training courses.
The scandal has been uncovered by the Prison Service's fraud unit, which was set up earlier this year and is led by a retired police detective.
The affair has become known within the service headquarters as "Swallowgate" after the Swallow hotel, in Wakefield, West Yorkshire, where many of the accused officers stayed or claimed to have stayed.
The investigation is understood to have begun when a prison officer was interviewed by West Yorkshire police on a separate matter. He made a series of allegations of large-scale fraud by prison colleagues.
Police set up a joint investigation with the Prison Service fraud unit. The inquiry centred on the Prison Service College at Wakefield, where prison staff are sent for specialist training.
Other inquiries have been carried out at the riot training school at Lindholme, Doncaster, in South Yorkshire.
Some of those questioned were physical training instructors who were being given lessons in control and restraint techniques for subduing difficult prisoners.
While attending the Wakefield courses many prison officers stay at the Swallow hotel, which charges pounds 60 a night for a room with satellite television, including complimentary tickets for a nearby gymnasium and swimming pool.
One officer on the Isle of Wight, who was sent to Wakefield, was accused of making 30 false claims for subsistence allowance.
One senior Prison Service source said: "Fiddling has become custom and practice in the service. It was institutionalised and accepted by everybody. These guys have been staying in each other's houses and giving each other receipts. It became an extremely big investigation and was passed back to the police."
A Prison Service spokesman said: "There is an on-going investigation by the prison service and the police and any evidence of fraudulent activity would be a matter for the police."Reuse content