Fraud triples in 2005 and more cases reach courts, says study |
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Mon, 30 Jan 2006 13:35
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LONDON: Fraud totalled 942 million pounds in value in 2005, which is triple that of 329 million pounds recorded in 2004, according to research by accounting firm KPMG.
The government suffered the most, to the extent of 447 million pounds, and evasion of value added tax and falsified claims for social benefits accounted for most of such frauds.
As many as 222 cases reached courts during 2005, up from 174 cases in 2004. There has been an increase in the number of fraud case prosecutions in the last six months and many of these cases were of high value. While there were 88 cases worth 249 million pounds in the first six months of 2005, this shot up to 134 cases worth 693 million pounds in the second half of the year. The largest case involved loans worth 260 million pounds fraudulently obtained by a metals trading company, RBG Resources.
KPMG cited the case of a clerk on less than 20,000 pounds salary a year siphoning 140,000 pounds from her employers over four years by adding digits to the value of cheques to top up the petty cash drawer.
Jeremy Outen, partner, KPMG Forensic, said criminal gangs appear to be very active with aggressive stings, while in the private sphere internal frauds to fund excessive lifestyles or pay off burgeoning debts show no sign of abating.
The study revealed that a little under half the total frauds in 2005 valuing 420 million pounds were carried out by professional gangs, while frauds valuing 468 million were the handiwork of "insiders".
KPMG said money-laundering cases have been found to be prominent, one of the largest resulting in the accused getting a prison term of four years for laundering 12.5 million pounds worth of drugs cash. A bogus eBay auction site fooled more than 160 people and bagged 200,000 pounds.
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Spurt in major frauds crimes 