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Research

Fraud cases reach record high

There were a record number of fraud cases in 2006 due to a rise in frauds perpetrated by organised crime gangs, according to KPMG Forensic’s Fraud Barometer.

There were 277 fraud cases worth £837m last year that came to court, compared to 222 cases worth £942m in 2005. The value of the frauds were the third highest recorded by the KPMG survey.

Over 40% of all fraud cases in the second half of last year were carried out by professional criminals (63 cases out of 154), compared with a quarter of cases in the first half of the year (30 out of 123). Meanwhile, companies’ own managers were responsible for 40% of fraud by value – some £350m.

KPMG’s analysis considers major fraud cases being heard in the UK where charges are in excess of £100,000.

Meanwhile, BDO Stoy Hayward’s annual FraudTrack report found that business fraud was up by a massive 40% during 2006, climbing to a value of £1.37bn. Furthermore, the number of reported frauds worth over £50,000 rose by a third to 295.

The year continued the trend, begun in 2003, of an overall fall in sentence length for fraud. However, FraudTrack found there has in fact been a toughening of sentences for frauds worth over £1m.

The main cause of fraud was found to be greed and a desire for a lavish lifestyle, and 82% of frauds were carried out by men – including virtually all frauds worth over £1m.

Links

KPMG

BDO Stoy Hayward

FraudTrack report

February, 2007

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