Fraud increases by 330% across Midlands
The value of alleged fraud reaching the Midlands courts increased by 330% in 2016 compared to 2015, according to a new study.
Latest research by KPMG Forensic said that with case value in 2015 amounting to £51m, there has been a significant increase to £222m – despite the fact the volume of fraud cases dropped from 37 in 2015, to 26 in 2016.
Although the decline in volume is in line with the national trend, the Midlands ranks second highest for fraud case value, accounting for 20% of the UK’s total in 2016.
KPMG said the significant rise in value was largely due to the increase in fraud against Government organisations, which has risen from £2.7m in the previous year to a huge £151m in 2016, making up 68% of the region’s £222m total.
The number of cases committed against Government organisations has almost doubled, from eight in 2015, to 14 in 2016.
In stark contrast to 2015, which saw the rise of the professional criminal, there was also a shift in the number and value of frauds committed by perpetrator type. While the number of fraud cases committed by employees and professional criminals decreased, the value of frauds committed by management level staff saw a 670% increase from £18m the previous year, to £138m in 2016.
Julie Bruce, forensic director at KPMG in the Midlands, said: “While it’s positive to see a smaller number of cases coming to court in the Midlands over the year, the threat fraud poses is still very real and we must remain vigilant. £222m is a huge figure and a major cause for concern, as our findings suggest that fraudsters are using technology to become more sophisticated in their methods.
“Government organisations were the main victims in 2016, having seen more fraud perpetrated against them than any other type of organisation, and with economic uncertainties ahead, there’s every possibility that fraudsters will look for more ways and shortcuts to make money.
“What’s also worrying is that people in management represent the largest percentage of fraudsters in the Midlands, so it’s essential that business owners keep a close eye on those in positions of power, particularly if they have access to the business’s finances. It’s absolutely crucial that the appropriate anti-fraud controls are in place to help mitigate this risk.”
Case studies to reach the region’s courts during this period include:
• A married couple from Nottingham who evaded paying a £150,000 tax bill on their curry house business earnings.
• A female payroll assistant from Birmingham who stole £300,000over five years from the recruitment agency where she worked.
• 17 construction tradesmen from the East Midlands who pocketed over £600,000 of taxpayers’ money.
• A man from Leicestershire who posed as a faith healer, conning over £600,000 from his victims by falsely claiming that in return for payments for prayer materials, that they would win the lottery.
