Member Article

North East fraud activity increases by a ‘worrying’ 12%

The value of fraudulent activity in the North East has increased for the first half of 2016 by 12% to £13.3m, according to new analysis by professional services firm KPMG.

KPMG’s Fraud Barometer report, which measures fraud cases with losses of £100,000 or more reaching the UK courts, also found that the number of cases increased by 50% from six to nine during the period.

The value of frauds committed by professional criminals in the region has increased dramatically, from £460,000 to £1.6m. This correlates with the national picture, which sees professional criminal perpetrators increasing the amount of cash they acquire by unlawful means.

In a similar vein, employees across the region continue to take advantage of their employers. While the number of fraud cases involving employees is consistent year-on-year, the value has almost doubled from £274,000 to £527,000.

However, the value of offences committed remained highest among management. Those in positions of authority were responsible for £8.1m of fraud, despite a 27% fall on the corresponding period in 2015.

Sara Smith, Senior Manager, KPMG Forensic in the North East, said: “Both the value and frequency of frauds is increasing in the North East, which is worrying.

“It is also a concern that professional criminals appear to be targeting the region and that management teams remain responsible for a significant portion of fraud.

“This is a clear indication that business owners need to be vigilant when it comes to keeping an eye on potential fraudulent activity within their own organisations.

“By taking their eye off the ball, the region’s businesses could fall victim to unscrupulous employees abusing their position of power, or even from professional fraudsters, and it’s vital that the appropriate measures of fraud prevention are put in place to mitigate this risk.”

Notable North East fraud cases during the first half of 2016:

Teesside

A financial advisor faced six charges of theft and one of fraud totalling almost £1m when he appeared before magistrates at Peterlee, County Durham, accused of stealing vast sums of money from North-East pensioners.

Darlington

A woman has appeared in court over an alleged £400,000 teachers’ pension fraud. The 45-year old was working as a pensions administrator for a third party processing company, when she is alleged to have taken £406,000 between August 12, 2013 and July 9, 2015

Teesside

A businessman, once at the centre of a £16m education scam on Teesside, could go to prison again after he was found guilty of another string of frauds. The 53-year old male has been charged with a string of fresh charges - one of which is participating in a fraudulent clothing development business between July 2012 and August 2013.

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