Record £1.3bn fraud committed to end the 'naughty Noughties'

A RECORD £1.3 billion of fraud was committed in the UK last year, capping a decade described as the "naughty Noughties" in a closely-watched study published today.

KPMG Forensic's fraud barometer also reveals that fraud in Scotland remained above 20 million for the second year running.

The accountancy giant said the 2000s had been a decade of fraud, reaching a peak in 2009 when 1.3bn of cases came to court. Last year's total is the highest figure since KPMG began compiling data in 1987.

North of the Border, there were 18 cases brought to court last year with a total value of 20.7m, according to the latest barometer.

In 2008, KPMG's research showed 15 cases were heard at courts in the country with a value of 24.7m.

Ken Milliken, head of forensic at KPMG in Scotland, said that while fraud levels had fallen slightly in the past year, the long-term trend remained firmly upwards, despite measures by the Scottish Government to tackle business crime.

He noted: "Instances of fraud being committed in Scotland and brought before the Scottish justice system remain high. In the last couple of years, the Scottish Government has announced investment in the prevention and detection of business crime, and several recommendations have been made to help improve the fight against business fraud in Scotland.

"Nevertheless, there are still opportunities for authorities, and businesses, to be working more closely together and sharing information in an effort to tackle business crime."

Milliken said a boom in technology had caused fraud cases to rise. He said: "Computerisation and globalisation have made fraud easier, quicker to carry out across international boundaries and easier to conceal.

"Organised criminals in particular have taken advantage of this. Identity theft is a continual problem, alongside more 'traditional' frauds including insider trading and price-fixing cartels."

KPMG Forensic's fraud barometer includes cases heard in the UK's courts where charges are in excess of 100,000. In one case last year in Scotland, an IT professional printed 185,000 in fake bank notes while another saw fraudsters posing as bank employees.

Taken together, the Noughties saw a major uplift in serious fraud cases compared with the previous decade – some 1,750 cases came to court, against 700 in the 1990s. In excess of 7bn of fraud was heard in Britain's courts in the past decade, compared with less than 5bn in the 1990s.

The 2000s were also characterised by a series of global fraud "super-cases", although none of these have to date occurred in the UK. The alleged frauds by individuals such as Bernard Madoff and Allen Stanford have run into the billions in their estimated value.

Milliken added: "It is essential for companies to rigorously screen potential employees and carry out proper background checks. Knowing who you employ and the extent of any risk they pose is a key line of fraud defence."