According to the latest KPMG Fraud Barometer, the number of North West fraud cases over £100k heard in court declined 18% from 34 to 28 in 2022.
The overall value of these cases also fell significantly by 71% from £83.9m to £24.1m, the survey found.
As with the previous year, the victim group that suffered the most cases of alleged fraud across the region were commercial businesses, with seven cases in 2022, although this did mark a fall from 12 cases in 2021. Government was the joint most common victim by volume in 2022, as they were also the victim of seven cases, down from eight cases in 2021. Embezzlement, which includes theft from company or client accounts, was the most common type of North West fraud case, accounting for the largest share of fraud value (33%).
Damien Margetson, Head of Forensic at KPMG in the North West, commented: “It’s encouraging to see a sizeable drop in both the volume and value of North West fraud cases in 2022. However, corporate fraud continued to rear its ugly head, with rogue employees abusing their positions of trust to steal money from their employers, clients and other partners. Despite the fall in related cases year-on-year, it’s vital that the region’s business leaders are taking the urgent action necessary to ensure they have the safeguards in place that can detect and prevent these crimes.”
Case studies to reach the region’s courts during this period include:
- A 49-year-old accountant stole more than £6.7m from a family run business in Liverpool. The accountant transferred large amounts of money from the company into their own account and claimed the transactions were loans from the company director.
- A 46-year-old grandmother ran a Liverpool accounting services company and acted as an unauthorised tax agent, submitting fraudulent repayment claims to HMRC for her customers in order to “enrich herself”. She secured £1.2m for 150 clients.
- A 58-year-old man from Oldham set up several companies, and installed energy-efficient home improvements in order to submit fraudulent VAT repayment claims. Invoices were falsified and altered to claim a total of £593k. olume of North West fraud cases fell by 18% year-on-year, with value dropping 71% compared to 2021
The National Story
The total value of alleged fraud cases £100,000 or above heard in UK courts increased by 151% from £444.7m in 2021 to £1.12bn in 2022, according to data released in KPMG UK’s latest Fraud Barometer.
The figure for 2022 is similar to pre-pandemic values which saw a total value of £1.1bn for alleged fraud cases heard in 2019.
Figures from KPMG UK’s Fraud Barometer released today, found that despite the increase in total value of reported fraud cases heard in 2022, the volume of cases fell by 27%. A total of 219 alleged fraud cases reached the courts in 2022, compared to 298 in 2021.
While volume of alleged fraud £100,000 or above decreased and total value increased, the value was largely driven by five cases with a value of £50m or above which were heard in UK courts in 2022. These cases amounted to a total value of £648m, more than half the total value of all the fraud cases heard. This is a stark contrast to 2021 which saw no reported cases over the value of £50m.
The Fraud Barometer also noted that a number of other reported cases, involving significant sums, were reportedly settled so do not appear within the figures but reinforce the trend that the value of alleged fraud is significantly up on prior periods.
Fraud cases against financial institutions halved in 2022, with only 16 cases being heard compared to 32 in 2021. Despite this, the value of fraud committed against financial institutions in 2022 increased dramatically by 2204% to £609.2m.
Commenting on the findings, Roy Waligora, Partner and Head of UK Investigations at KPMG, said: “In 2022, we saw the total value of fraud in the UK return to pre-pandemic levels as a few high value cases boosted the numbers. This comes as professional criminals have continued to attempt to line their pockets with high value fraud against financial institutions and their customers.
“The slight drop in volume of fraud cases heard does not mean that fraud in the UK was any less prevalent in 2022. The impact of fraud remains a real concern in the UK, however, the decrease in the volume of cases may be an indication of pressure on authorities and that some fraud cases are not resulting in charges, as recently outlined by the National Audit Office1.”
Fraudsters targeting general public as cost-of-living scams emerge
The general public remained the most targeted group by perpetrators of fraud by volume, although cases against them decreased by 22%. In 2022, the general public were the victim in 73 cases with a total value of £136.9m, compared to 93 cases with a total value of just under £116m in 2021.
These figures come as Action Fraud2 have been warning of criminals exploiting the cost-of-living crisis through scamming the general public.
Reflecting on the data, Roy Waligora, added: “The Fraud Barometer only looks at reported cases heard with a value of £100k or above in UK courts, so the likelihood is that the general public have been the victims of many more frauds. As the cost-of-living hits households, we are likely to see a combination of two things happen.
“Firstly, we are likely to see opportunist fraudsters target the public through specific scams relating to the cost of living, such as a recent energy rebate scam3. Secondly, there is likely to be an increase in frauds committed by more amateur criminals as people face financial difficulties. The public must stay vigilant, with the help of businesses, government and the police.”
Embezzlement remains top fraud type
Embezzlement has remained the most common fraud type for 2022, albeit with fewer cases than in 2021. There were 36 cases of embezzlement with a value of £100k or above heard in UK courts in 2022, compared with 51 cases in 2021. However, the total value of these cases increased by 37% to £38.9m. This total value includes a case which saw an employee steal £6.7m from company accounts.
Roy Waligora said: “Embezzlement can be a big problem for businesses as employees and management look to exploit their positions. It is very important for businesses to have channels to report fraud and when businesses become suspicious about any fraudulent activity, that they act swiftly to uncover the facts so they can take decisive action against the individual or individuals. This is especially relevant as companies start to address the requirements of a Fraud Statement in their annual reports.”
Money laundering and investment fraud see huge jump in value
In 2022, UK courts only heard one less money laundering case than the prior year, but the total value of money laundering cases increased by 694% from £68.2m in 2021 to £541.7m. This was bolstered by three cases with a value of £100m or above.
Investment fraud also saw a large increase in value despite only six more cases being heard in 2022 than in 2021. In 2022 19 cases were heard in UK courts amounting to a total value of £181.8m, compared to 13 cases in 2021 which had a combined value of £12.5m, a 1358% increase in value.
Roy Waligora said: “While these cases may seem alarming, it is positive that these cases are making it to UK courts as these alleged crimes are exposed. However, businesses and institutions themselves need to be doing more to stop money laundering activities which are achieving such high values.
“As for investment fraud, investors and potential investors need to be wary of any investment opportunities. They should ensure they are doing their due diligence first by seeking advice and checking the FCA register.”
Other key findings:
- Of the 219 cases heard in 2022, 80% of cases involved male perpetrators and 32% were aged 36-45 years old.
- Professional criminals were the main perpetrators, responsible for 92 cases of fraud and worth a total of £725.2m. This is an increase in value from last year by 130%.
- Management was the second largest group of perpetrators by volume, accounting for just over a quarter of cases in 2022.
- Cases of advanced fee fraud, such as romance scams and services paid for but not delivered, increased from nine cases in 2021 to 19 cases in 2022, with the value almost tripling to £16m.
- Cash and equivalent instruments fraud, such as credit/debit card and counterfeit currency, cases doubled to 12 cases but saw a decrease in total value from £16.8m in 2021 to £14.1m as fraudsters carrying out this type of fraud focused on smaller values.
- The London and South East Region still has the greatest proportion of the value of fraud. 56% in the year 2021 and 53% in the year 2022.
