Large Fraud Cases Double

Article excerpt

THE extent of fraud committed by management and employees in the North East has been exposed by KPMG's latest fraud barometer.

The region bucks the national trend, as the value of large (pounds 100k plus) frauds in the first half of the year more than doubled when compared with the same period last year, from pounds 6.1m to pounds 13.5m, despite case volumes falling from six to four.

But this is mainly due to one large duty evasion case which saw three men jailed for an pounds 11m cigarette smuggling fraud after a trial at Newcastle Crown Court.

A further particularly large fraud in the region saw a group of nine, including a mortgage adviser from County Durham, in court for stealing pounds 2.2m from financial organisations through mortgage fraud.

Sara Smith, of KPMG's Newcastle forensic practice, said: "The extent and impact of fraud perpetrated from within businesses has historically been masked by a handful of exceptionally large cases coming to court, but the fall in such super-cases now shines a spotlight on a chronic threat to businesses in these austere times."

"The pressure to cut costs remains very real in the current environment but companies would do well to set any potential savings from structural and operational changes against the risk of material losses to fraud. …