North West follows national trend with steep decline in value of fraud cases

The North West has aligned to the national trend and witnessed a dramatic fall in the value of fraud cases heard in the region’s courts.

According to the latest KPMG Fraud Barometer, the value of fraud activity during the first half of 2019 reached £29.2m, compared with £66.6m during the same period last year.

The number of cases being brought to court in the first six months of the year remained unchanged at 26.

The drop in value can be attributed to a spike in tax evasion activity in 2018, which saw a number of major smuggling cases, including bold attempts to smuggle tonnes of tobacco.

The cases during that period were the most common fraud activity and had a combined value of more than £58m.

Embezzlement of funds has been the most common fraud offence so far this year with eight cases, followed by VAT fraud which was the focus of five cases in the region.

Meanwhile, commercial businesses were the most likely target for fraudsters and were the victims of £10.3m-worth of fraud activity.

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

• Fraudsters from Manchester received extended jail terms following a case that convicted them of running ‘bogus colleges’ that took advantage of illegal immigration
• A fraudster was convicted at Preston Crown Court after admitting to embezzling £280,000 from a pension fund he oversaw
• Manchester Crown Court heard a case of a £160,000 jewellery scam that involved a man posing as a diamond supplier
• A truck dealer from Liverpool stole £337,000 in VAT from the sale of £3m of vehicles, while also claiming benefits.

Damien Margetson, head of forensic at KPMG in the North West, said: “A fall in the value in fraud might be welcome, but we shouldn’t become complacent and should remember that the volume of cases is just as high as last year.

“Quite simply, the fight against fraudsters is far from over.

“The latest stats simply show that the threats that we all face are constantly changing, and so vigilance and preparation are key.”

He added: “So far this year, businesses have been the main target and embezzlement the most common offence, which reminds us all that internal controls are just as important as protecting from external threats.

“On a national level, we’ve seen the commercialisation of cyber crime establish itself, so North West businesses should prepare and brace themselves as attacks move online and become ever more digitally enabled.”

Nationally, more than £319m of alleged fraud hit UK courts in the first half of 2019, down from £345m in the same period last year.

Courts across the country heard 217 cases of alleged fraud, a decrease of 13% on the same time last year, which saw 249 cases.

Another trend coming through in the Fraud Barometer data saw a number of repeat offenders heading back to court.

It recorded four cases of people with previous convictions for fraud coming back to court under new charges totalling £2.6m.

In some cases, the alleged repeat offenders were able to secure employment in new roles where they subsequently were able to circumvent internal controls to continue to commit fraud.

In one case a fraudster was caught trying to pay a £100,000 tax fraud debt with money he had stolen by staging another scam.

The 57-year-old fraudster first appeared in court in 2016 where he told the judge at Leicester Crown Court that he could repay the sum of £107,000 if given more time to come up with the money.

Investigators from HM Revenue and Customs later discovered he was raising the money to pay the debt through a second scam that involved stealing more than £580,000 from other businesses. He admitted the second fraud at court in 2019 where he was jailed for four years.