Fraud by professional gangs remained at the extremely high levels seen in previous years (£800million in 2008), but there was a marked increase in fraud by individuals. Taken together, company managers, employees and customers were tried for some £300million of fraud last year, three times the value seen in 2007.
KPMG warns that the worst is yet to come: the bulk of the fraud committed since the credit crunch began in August 2007 will most likely not yet have come into the public courts. The Fraud Barometer’s records show that in the last recession of the early nineties the full peak of fraud in the courts was not reached until 1995.
Hitesh Patel, fraud investigation partner at KPMG Forensic, said: “These figures are bad enough in themselves, but I fear the trend for the next couple of years will be even worse. As the global economic downturn takes hold and organisations look ever more closely at their operations it is very likely that more fraud will come to light so that the real impact of the credit crunch on fraud is yet to be fully felt. Already though, the signs are there – globally in the last 12 months alone at least three alleged multi-billion pound frauds have been uncovered. ”
According to KPMG’s Barometer, which measures fraud cases coming to court where the charges are for £100,000 or more, there was a total of 239 cases through the year. Professional gangs accounted for £806million across 111 cases.
The worst-hit sector was financial services, which suffered £388million of fraud in 63 cases, a ten-fold increase on the £37million (36 cases) recorded in 2007. However, this was in part fuelled by an alleged £220million attempt to hack into Sumitomo Matsui Banking Corporation’s systems which came to court in the first half of the year.
Many fraudsters were audacious in their efforts, such as the convicted fraudster who applied for a £130,000 mortgage from his prison cell, and the man who stole company cheques and wrote one out to himself to the tune of £500,000, which he then attempted to pay in to his bank account via a self-service ATM. Unsurprisingly he did not get away with it.
A Midlands woman was alleged to have stolen £250,000 over a two-year period from the vending company for which she worked – including a logistically-challenging £70,000 in coins.
Half of fraud by value in 2008 was committed in London and the South East (£527million). However, a notable amount (£380million) was also seen in the Midlands – three times the amount registered there in 2007.
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