Concerns raised over lack of fraud convictions in Scotland

Published on Sunday 3 February 2008 20:18

SCOTLAND has seen a sharp fall in the number of major fraud cases reaching court, triggering concerns that the country is failing to bring fraudsters to justice.

According to the latest KPMG Fraud Barometer, published today, ten cases with fraud totalling just over 4 million were heard by the Scottish courts last year.

The figures compare with 22 such cases in 2006, involving fraud amounting to more than 50m.

Although the downturn may initially be seen as encouraging, experts say fraud risk and incidence remains high and point to the picture south of the Border, where fraud has reached a 12-year peak.

During 2007, almost 200 cases totalling some 1 billion were brought to court in England and Wales, today's report reveals.

The KPMG Fraud Barometer, which has been running for 20 years, considers cases being heard in the UK's crown and high courts, where charges are in excess of 100,000.

Ken Milliken, head of forensic for KPMG in Scotland, said the research suggested that England and Wales were pulling ahead in fraud prosecutions.

"All of the underlying facts and the wider UK picture shows that fraud risk and incidence remains high," he argued. "So a valid question to ask is whether we have simply been failing to effectively bring fraudsters to justice in Scotland?"

Milliken said an "incentivisation scheme" south of the Border had resulted in part of the proceeds of crime, including fraud by criminal gangs, being reinvested in additional agency resources targeted at financial investigation of criminal enterprises.

"This is creating momentum in the fight to part criminals from their ill- gotten gains," Milliken added. "In Scotland, we have to use the cash recovered to fund wider crime prevention activities, which ... has not created the same virtuous circle as regards the proceeds of crime."

The report showed that nearly 90 per cent of the value of fraud cases UK-wide were linked to organised gangs.

KPMG's figures come on the back of last week's announcement by the Scottish Government of extra funding to help tackle fraud in Scotland.

More of the money recovered from crime is to be used to recruit forensic accountants, investigators and lawyers to increase the size of the Civil Recovery Unit and the National Casework Division at the Crown Office.

Outlining the proposals, Kenny MacAskill, the justice secretary, said: "This government has already made clear its determination to tackle serious organised crime in all its forms.

"That includes the criminal kingpins, as well as their lieutenants and the foot soldiers who do their dirty work."

Milliken welcomed the move, saying it would go "some way towards putting Scotland on a level playing field with England and Wales as regards specialist resources to tackle the finances generated by criminal enterprises".

Among the ten Scottish fraud cases last year, the biggest involved company executive Brian Stevenson, who embezzled 1m of his boss's money to fund a champagne lifestyle.

He was only caught after he tried to use his company credit card to settle a restaurant bill in 2004 and found that the card was refused. Last March, Stevenson was jailed for more than five years.