Warning to Companies as a Rise Is Seen in Fraud Cases; KPMG Says Figures Could See a Bigger Leap When Credit Crunch Offences Start to Emerge

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Byline: Sion Barry

LEVELS of fraud in Wales have reached the highest levels since 1995, new figures show.

According to research from KPMG, more than pounds 64.6m of fraud reached the courts in the Wales and the south-west of England in 2008, according to the firm's Forensic's Fraud Barometer - the third highest total in the region in the 21-year history of the survey The barometer, which measures major fraud cases coming to court where the charges are for pounds 100,000 or more, show the total value was more than 12 times greater than in 2007 when cases were worth pounds 5.3m. The number of incidences has also increased significantly with a total of 33 cases recorded throughout the year, almost twice as many as in 2007 when 17 were heard.

In Wales alone, pounds 48.7m worth of cases came to court last year, compared with pounds 1.3m in 2007. The biggest case which reached the courts last year was an alleged pounds 40m fraud at a quarrying company, due to be heard in Crown Court later this year. However, even without this alleged case, the level of fraud in 2008 was significantly higher than in 2007. KPMG warns that the worst is yet to come; the bulk of the fraud committed since the credit crunch began in August 2007 will most likely not yet have come into the public courts.

The Fraud Barometer's records show that in the last recession of the early nineties the full peak of fraud in the courts was not reached until 1995, when just over pounds 100m cases were heard in the region.

Geoff Mesher, head of forensic services at KPMG's Cardiff office, said: "With pounds 48.7m worth of fraud cases heard in Wales in 2008 compared with pounds 1.3m in 2007, these figures now seem very low.

"These latest numbers indicate what we were expecting to see - a rise in fraud as economic conditions create the motivation to commit such crimes combined with organisations detecting more fraud as their results go down and they examine their operations more closely.

"These figures are bad enough in themselves, but I fear the trend for the next couple of years will be even worse. As the global economic downturn takes hold it is very likely that more fraud will come to light, so the real impact of the credit crunch on fraud is yet to be fully felt. Already though, the signs are there - globally in the past 12 months alone at least three alleged multi-billion-pound frauds have been uncovered."

Cases coming to court in the Wales in 2008 included: A former football club manager convicted of defrauding three public organisations - including Anglesey County Council and Wales Council for Voluntary Action - out of pounds 120,000 by falsifying documents to obtain grant funding. …