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The total amount of large scale UK fraud in 2011 topped £3.5bn – a record year – according to KPMG's Fraud Barometer, as the country continues to struggle with tough economic conditions.
The majority (£2.5bn worth of fraud) was recorded during the second half of the year, including five cases of more than £50m each. One rogue trader case alone accounted for £1.3bn and, even without its inclusion, the six months to December 2011 would still have seen the largest amount of fraud ever recorded by KPMG in a six month period.
Yorkshire, however, experienced the opposite trend; an increase in the number of large (£100,000+) cases reaching the region’s crown courts but a drop in their value. In 2011, 38 cases were recorded compared to 32 in 2010, while the value dropped by 46% to £25m (from £46m in 2010).
Cases to reach Yorkshire’s crown courts in the last six months include:
- Two entirely fraudulent businesses, which appear to have been established for the purpose of securing VAT repayments. One was a Leeds based haulage business which defrauded HMRC out of £604,000. The other, a Bradford based building company, took nearly £210,000 in VAT.
- Financial fraud was also seen, with an adviser who attempted to defraud banks and building societies of £2.5m in fake mortgages.
Vivien Osborne, forensic director at KPMG in Leeds, said:
“The economic uncertainty has been the double-edged sword behind these numbers. Companies and government agencies have rooted out more fraud through implementing austerity measures and operational changes. However, at the same time, the pressures on individuals as a result of the downturn continue to act as a catalyst for more fraud being perpetrated. These figures represent the thin edge of a much bigger wedge."
I hope you find the results both interesting and useful. I would be pleased to answer any questions, and offer advice, that this e-alert prompts you to seek.
Kind regards
Vivien Osborne
Director, KPMG Forensic
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