Today the KPMG Risk Advisory Forensic team launched the latest KPMG Fraud Barometer, providing a summary of frauds reported by the media in New Zealand for the 12 month period 1 August 2019 - 31 July 2020.
This edition shows that fraud reported in the year totalled $72 million, including a $45 million Ponzi scheme committed by a (now) deceased financial advisor.
Looking back on the year ending July 2020, this edition of the Fraud Barometer finds that:
- Employees were the most common perpetrators of fraud, followed by management.
- The last 12 months have seen a sharp increase in investor fraud, with investors being defrauded of $62m.
- 58% of frauds resulted from internal control failures, and some of this may be due to attention being directed elsewhere in recent months due to Covid-19.
The impact of Covid-19:
The disturbance in normal business processes and working conditions as a result of Covid-19 have created opportunity to commit fraud, as normal controls are circumvented, and the chaos and uncertainty of the crisis enable others to rationalise bad behaviour. We are not yet seeing fraud cases relating to the wage subsidy, however, due to the magnitude of the amount that has been paid out in Covid-19 relief packages, it is possible that this may change in the aftermath of the pandemic.