North West fraud value triples to £131m as number of cases almost doubles

Damien Margetson

The value of fraud cases at courts in the North West has more than tripled over the past year, according to research from KPMG.

The business advisory firm’s Fraud Barometer report has found that the value of fraud cases recorded in 2018 is £131m, up from £38.5m in 2017.

Over the same period, the number of cases being tried in the region’s courts rose from 29 in 2017, to 57.

During 2018, evasion of duties was the most common offence.

The 10 cases recorded for this type of tax fraud accounted for more than half of the value of total fraud activity and were worth £63.4m combined.

Damien Margetson, head of forensic at KPMG in the North West, said: “A considerable proportion of activity going through local courts concerned fraudsters targeting HMRC and evading duties and tax responsibilities for their own gain.

“To put it simply, this means that it is North West taxpayers who have been the biggest victims of fraud this year.

“As cases get more complex and daring, but also become more frequent, it is little surprise that there was such a diverse range of fraud activity happening in the North West, from benefit cheating to embezzlement and identity theft.

“It shows that both businesses and individuals in the region need to take proactive steps to protect themselves.”

Case studies to reach the region’s courts during this period include:

  • Two men in Merseyside were jailed after being caught with millions of smuggled cigarettes worth nearly £2m in unpaid taxes.
  • A woman in Burnley was handed a 20-month suspended sentence after defrauding the UK taxpayer out of £105,000 over five years after being caught claiming tax credits and tax benefits fraudulently.
  • A man in Bolton was jailed for conning customers at his high-performance car business with some customers losing out on as much as £500,000.
  • A finance manager was jailed for four years after stealing hundreds of thousands of pounds that was marked for charity donations from his employer, a construction business in Bolton, so he could put a deposit on a new house and pay for pedigree kittens and holidays.
  • A conman from Stockport was jailed after pleading guilty to charges of conspiracy to commit fraud by false representation and money laundering in a case that targeted banks and exploited a system designed to refund genuine businesses.
  • Burnley Crown Court handed a motor dealer a suspended sentence for doctoring the mileage readings on his cars for sales. Millions of miles were knocked off odometers, and the dealer was ordered to repay £187,000 to customers who had been misled.

Nationally, the number of fraud cases reaching courts in the UK rose by 78% in 2018.

There were 453 cases of alleged fraud with a value or more than £100,000, involving a combined total worth £1.2bn that came to courts across the UK last year.

The barometer includes one supercase – a case greater than £50m – but there were a large volume of smaller value cases between £10m and £50m covering areas such as evasion of duty, VAT fraud, investment fraud, loans and mortgages, counterfeit goods, pensions and social benefits.

James Maycock, forensic partner at KPMG said: “In the round, fraud was a diversified portfolio this year.

“Fraud levels in the UK continue to rise as criminals look for new ways to exploit both public sector and private sector fraud opportunities.

“Sophisticated technology and social engineering have become closer to the norm for ‘professional’ criminals – for example, the number of cases of ‘account takeover’ frauds in the Fraud Barometer has more than doubled from 13 cases to 34, with diversion fraud, identity theft and push-payment fraud being the most common methods.

“Getting the large, often cross-border and complex frauds to court is both time-consuming and resource intensive.

“This places much more emphasis on businesses and consumers to protect themselves from a growing number of fraudsters who will take advantage given the opportunity.”

The barometer identified a worrying surge in the value of insurance frauds hitting courts in the past 12 months, more than was seen in the period 2014-2017 combined.

Overall, £17m of alleged insurance fraud appeared in UK Courts over 19 cases in the past year, compared with 24 cases with a combined values of £11.9m in the years 2014-2017.

Cash for crash, personal injury scams and faked death claims featured multiple times in the list of frauds coming to court.

In another emerging trend, 2018 saw a large increase in the value of fraud cases coming to court involving rogue tradesmen.

In 2018 there were 18 cases with a value of £7m, where mostly elderly homeowners were targeted and scammed of their life savings.

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