Fraud charges against prison officers dropped after £4m inquiry

A prosecution of dozens of prison officers accused of carrying out widespread frauds has spectacularly collapsed after costing millions of pounds in public money.

The investigation into the biggest fraud scandal in prison history led to more than 40 officers being suspended on full pay for nearly four years. The affair became known as "Swallowgate" after the Swallow Hotel group at which many of the defendants were alleged to have falsely claimed to have stayed while on training courses.

A total of 31 officers were accused of various offences but, following the acquittal of 13 at Leeds Crown Court, the Crown Prosecution Service decided yesterday to drop charges against the remaining 11 because of insufficient evidence.

Lees, Lloyd, Whitley, the legal firm representing the accused prison officers estimated that the inquiry had cost £4.3m. Mark Healy, chairman of the Prison Officers' Association, said: "This is the equivalent of running a prison for an entire year. It is a gross waste of public monies."

Mr Healy called for Prison Service chiefs to immediately reinstate the suspended officers. But the Prison Service said last night that the accused would be subject to internal disciplinary proceedings. A spokesman said: "This is not double jeopardy because the standard of proof required at a criminal trial is different to that of our code of conduct."

He said it was "regrettable" the case had taken so long but that "allegations of serious criminal activity" needed to be properly examined.

The investigation stemmed from the arrest of Keith Mather, a senior prison officer jailed for 16 months in 1998 after admitting deception charges involving £17,000. Mather made claims to detectives that expenses fraud was widespread, triggering the wider police investigation which led to 42 members of prison staff being suspended.

The suspended officers, who were mostly high-flyers handpicked to attend prison colleges in Wakefield, Preston and Doncaster for training in new security procedures, claimed they were victimised after the discovery of widespread corruption within the service.

Many have been allowed to take additional paid jobs including training airport staff in baggage X-rays, selling corporate hospitality and working as closed-circuit television operators for private security firms.

The CPS yesterday defended its prosecution at Leeds Crown Court. It said: "The allegation that a person in such a position of trust and authority in the community has committed a crime like this is a very serious one." A spokeswoman said seven of the 31 accused prison staff had pleaded guilty to charges of obtaining property by deception, namely receipts, and had received sentences ranging from community punishments to 15 months in jail.