DETECTIVES have uncovered a "fake" pensions scandal involving thousands of pounds swindled from the Railways pension Board headquarters in the North-East, The Northern Echo can reveal.

Officers working on the inquiry uncovered fraudsters who had taken over the identity of dead relatives in order to claim lump sum payments and monthly instalments from pensions set up for British Rail staff.

The Railways Pension Board, based at Stooperdale offices, in Brinkburn Road, Darlington, called in police after a check of a national register of deaths on the Internet revealed names of staff who had died but were still being paid pensions.

During further checks, it was found that signatures required by the board to verify claims were fake.

The board, set up in 1994 as part of the privatisation of British Rail, oversees pensions schemes of more than 145,000 railway workers and retired staff across the UK.

Officials refused to say how many fraudsters were uncovered or how much money may have been lost but police sources say it runs into many thousands.

However, it is understood the problem will not adversely affect the pensions of genuine claimants because there is more than enough money in the fund to cover any losses.

The police investigation uncovered one woman who has been accused of falsifying a railways board document belonging to a dead person for more than 14 years.

Another man faked the signature of his dead mother in order to cash in on her pension money.

Last night, managing director of the Railway Pension Board Michael Goy said that the company would continue to crack down on offenders.

In statement to The Northern Echo, he said: "It has always been our procedure to take steps to ensure the right pensioner is getting the right pension.

"We continue to look for ways to improve this, and carry out a number of rigorous checks.

"Occasionally we find a pension that is being paid after a pensioner has died and when we do it is our policy to recover the money and where appropriate inform the police."

Detectives from Darlington Crime Investigation Department were called into the board's office in September after the discrepancies came to light. A police spokesman said: "Officers made inquiries in Leicester, Reading, Wakefield and Rotherham. Four people were arrested, two men and two women. One of the men has repaid the money."

It is believed that the Railway Pensions Board's review of the death register could lead to many more fraudsters being uncovered.

A number of cases have already come up before Darlington Magistrates Court.

Leonard Spedding, of Outwood, Wakefield, pleaded guilty on Tuesday to dishonestly obtaining a money transfer of £11,424 from the board.

The 61-year-old forged the signatures of his dead mother and the local vicar to obtain money between 2000 and 2002.

He will be sentenced at Teesside Crown Court later.

Derek Cotz, of the Rail, Maritime and Transport Workers' Union, said: "Fraudulently abusing the pension scheme harms the legitimate claims of the vast majority of people who do no such things."

A spokesman for the Occupational Pensions Regulatory Authority was not aware of the fraud. He said: "It is not a common crime but it is something that is always there. It does require vigilance."