Major fraud cases fall but value multiplies

The number of high-value fraud cases reaching Scottish courts fell last year, but the total value soared amid a Ukwide resurgence of “super cases” and cyber crime.

KPMG’S latest fraud barometer, published today, shows that nine cases of alleged fraud were dealt with in Scotland during 2016, down from 12 the year before. However, the total value of losses leapt from £4.7 million to £24.3m, skewed by a single £18m case of investment fraud.

The barometer, which measures fraud cases with losses of £100,000 or more reaching the courts, found that the average value of each case last year was £2.7m, up from £400,000.

Whereas in previous years employees were responsible for the majority of significant instances of fraud, 2016 saw the figure fall by more than 70 per cent, with only two cases coming to court, compared with seven in 2015.

Conversely, fraud perpetrated by management was on the rise, accounting for more than half of all cases heard in 2016.

Across the UK, the value of alleged fraud reaching court broke the £1 billion barrier for the first time since 2011, due to a resurgence in super cases.

Ken Milliken, head of forensic for KPMG in Scotland, said: “Although employee fraud has fallen, we know that insider fraud is still something which deeply concerns businesses and the threat remains.”

Hitesh Patel, UK forensic partner, added: “We can expect more of these super frauds as challenging economic circumstances place pressures on businesses and individuals and as technology becomes more sophisticated.” 0 KPMG’S Ken Milliken warns of threat to business