PracticeConsultingStaff fraud surges by 60%

Staff fraud surges by 60%

Employee fraud has increased dramatically leading to a shift in the profile of fraudsters passing through the UK criminal courts, it has been revealed.

According to research by forensic accountants at KPMG, the number of frauds perpetrated by employees has risen by 60% in the first six months of 2001 compared with the same period last year, while management fraud cases have decreased by 7%.

In one extreme case, a cashier at a multi-national electronics company managed to steal an estimated Pounds 2.5m over 31 years. He used simple methods such as altering cheques issued by his employers and then pocketing the difference. His fraud was discovered when a new accounts system was installed in 1999.

Jeremy Outen, fraud investigation partner at KPMG, explains: ‘A new type of fraudster is emerging in the form of an employee.’

He added: ‘Although management are still more likely than anyone else to commit fraud, the continuing decline in cases perpetrated by this group suggests that companies are getting better at detecting and preventing this type of fraud.’

While the number of fraud cases has risen by 37.5%, the total value of fraud has remained the same at Pounds 113m. Few large cases came to court, with only two valued at over Pounds 7m, one at Pounds 47m and the other at Pounds 18m.

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