Member Article

Revealed: North East sees highest UK fraud rise following staggering £111m case

Astonishing figures have revealed that the value of North East fraud surged by 746% in 2015, the highest rise across the UK, after being dominated by one £111m case.

KPMG’s Fraud Barometer, which measures fraud cases with losses of £100,000 or more reaching the UK courts, has found that the value of fraud across the North East surged by to a total of £139.4m, compared to £16.5m in 2014.

While case value rose dramatically, the number of cases across the region fell by 27%. Only 16 fraud cases appeared before the North East Courts in 2015, compared to 22 in the previous year. Of these, there was a significant reduction in the volume of low-valuecrimes, which dropped by 40%.

Notable 2015 cases:

Teesside

A 57-year old businessman has been jailed for five-and-a-half years after masterminding a mortgage scam, branded one of the biggest in the UK. The long-running fraud caused losses of more than £111m to three lenders.

Newcastle

A 64-year old caretaker was jailed for two years after selling £1m of illicit cigarettes, tobacco and alcohol from an industrial estate. Customs officers seized more than 1.5m cigarettes, three tonnes of hand-rolling tobacco and 18,000 litres of beer, wine and spirts. The goods were worth £946,623 in unpaid duty and VAT.

Stockton

A 62-year old businessman who funded a luxury lifestyle with an £840,000 tax fraud has been jailed. He failed to register the company for VAT, despite still charging his clients, and avoided paying more than £450,000 in VAT payments. He also avoided payment of a further £390,000 in income tax.

Sara Smith, Senior Manager, KPMG Forensic in the North East, said: “Despite a reduction in the number of cases across the region, the latest KPMG Fraud Barometer shines a spotlight on the impact of ‘super’ frauds.

“Many business owners fall victim to unscrupulous employees and if business owners do not keep a rigorous check on a firm’s finances, such people will continue to exploit their position until caught.

“Despite the number of cases falling overall, the prominence of high-value cases casts a stark warning to those in charge and highlights the importance of ensuring a business is well-protected.”

Looking to promote your product/service to SME businesses in your region? Find out how Bdaily can help →