KPMG: 2010 Peak Year for Fraud in 23 Years
KPMG’s latest Fraud Barometer report has pointed the tough economic environment as the major cause for the rise in the number of cases of fraud in UK last year which recorded a 16 percent increase, or 315 cases, the highest so far in 23 years.
According to KPMG’s report, which was based only on cases worth in excess of £100,000 excluding those that remained undetected, fraud in UK saw its fastest pace last year in the cases involving company managers with a 30 percent increase compared with that in 2009.
Of the sectors affected by fraud in UK, the public largely suffered from crimes committed by professional fraudsters, that were shown to be the foremost threat costing £709 million to public based on court records for 2010. Fraud against public purse soared 20 percent last year to 70 cases from 59 in 2009.
The most controversial of them all was the case of Michael Richards, a businessman tagged in a major tax fraud in UK costing £103 million. He was accused of defrauding investors’ fund into green technologies.
Public sector was followed by the financial services industry, with cases of fraud committed by managers totaling 61 cases in 2010 worth £419 million compared with 79 cases in 2009 worth only £129 million. Levels of fraud committed by managers were only a little higher than that by employees, which KPMG Fraud Barometer found out to be worth £1.6 million per case compared with an average of £7.2 million per fraud case committed by a company manager.
KPMG also highlighted the fact that fraudsters are turning to new technologies to victimize those who are vulnerable to security threats. One instance was a DJ with his 10 accomplices who plotted a credit card scam recently against the website of iTunes, having targeted about 1,500 credit cards to buy 20 songs which they resold thereafter. The fraud generated £469,000 in royalties.