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Fraudsters strike gold – and firms are the biggest victims

The figure, from business adviser KPMG’s Fraud Barometer, is an increase of 779% on 2014.

The Fraud Barometer, which measures fraud cases with losses of £100,000 or more reaching the UK courts, shows that overall the total value of fraud prosecuted in the region in 2015  fell by 21% to over £380 million but still accounted for over half of all fraud taking place in the UK. 

There was a marked increase in the value of frauds being committed by managers and employees, which was up by 153% on 2014 figures.  In one case a mother-of-two from Surrey stole £1.75 million from the family business that she worked for as book keeper. Unbeknown to the business when they recruited her she had previously been convicted of benefits fraud and ten counts of fraud against a former employer.

Chris Wheeler, head  of forensic for KPMG’s Milton Keynes office said: “The South East remains the UK’s fraud hotspot and financial institutions in particular have been hit hard this year. Fraudsters and criminal gangs see financial institutions as a series of processes that they need to overcome, but once penetrated the rewards can be bountiful.”

Large organisations focus on regulatory efforts to combat financial crime at the front end, such as money laundering. But, Mr Wheeler added, the data shows they remain vulnerable to back office fraud.  The importance of employee screening and pre-employment due diligence measures cannot be understated, he said.

Nationally, fraud in the UK reached more than £732 million in 2015.  The research shows that the value of fraud prosecuted rose in 2015, up from £717 million in 2014.  The average value of fraud per case also increased to £2.4 million in 2015 compared to £2 million in 2014. 

A key driver for this rise being two cases which accounted for £253 million of the total fraud recorded in 2015. 

Criminals continued to prey on the most vulnerable in society.  KPMG’s research revealed a rise in fraudsters targeting those in financial distress, offering a false safety net to dupe victims into surrendering both money and assets. 

Businesses and public organisations were also targeted, with fraudsters falsifying their financial position to extract funds or entice funding investment, leading to losses of £176 million, a tenfold increase on 2014.

In one case, an online dating fraudster from Luton was jailed for five years by after she fleeced wealthy men for almost £500,000 and left them heartbroken.  The 32-year-old set up profiles on SugarDaddies.com and Match.com to con her five victims out of large sums of cash after claiming she could repay their loans with interest. 

She persuaded her suitors to transfer money to her over a two-year period by insisting she needed the money for her property investments.