TOTAL UK fraud reached a record £3.5 billion in 2011, fuelled by economic uncertainty, according to figures by KPMG.
Around £2.5 billion worth of fraud was recorded during the second half of 2011, including five large fraud cases of more than £50 million each coming to court.
Hitesh Patel, forensic partner at accountant KPMG, said economic uncertainty has been a “double-edged sword” for fraud.
Although companies and government agencies have rooted out more fraud through implementing austerity measures and operational changes, financial pressure on individuals amid the economic downturn is acting as catalyst for more fraud.
The public sector and financial companies were most affected by fraud, KPMG said.
The public sector had 68 cases of fraud with a value of 1.09bn.
Financial companies, which had 59 cases of fraud worth £1.52bn, were targeted mainly by professional criminals, but in some cases by company “insiders” and customers, KPMG found.
Fraud by management accounted for 57 cases during 2011 with a value of £729m – an increase of 74% from the previous year.
KPMG’s “fraud barometer” examines major fraud cases heard in the UK’s Crown Courts, where charges are more than £100,000.
HMRC breaches client confidentiality; and partner profits fall at EY. These stories and more discussed in Friday Afternoon Live
Does Darwin's theory apply to taxation? Colin ponders...
Improvements to cashflow statements are being targeted in a consultation launched by the Financial Reporting Council (FRC)
"The whole idea of HMRC officials supplying confidential information about individuals to the media on a non-attributable basis is, or should be, a matter of serious concern," say Supreme Court judges