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Fraud Barometer: Regional highlights

Fraud Barometer: Regional highlights

The story across the UK regions.

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Roy Waligora

Partner, Head of Investigations and Corporates Forensics

KPMG in the UK

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Fraud Barometer January 2019: UK regions - illustration of landmarks

January 2020 results

Our latest results from the KPMG Fraud Barometer have just been published covering January to December 2019.

The Fraud Barometer has been tracking fraud trends since the 1980s and analysis of cases has continually identified trends in the types of fraud that have dominated courts. The bi-annual Barometer identifies the latest fraud trends and patterns affecting the UK economy which helps businesses remain alert to new threats and respond to any fraud risks in an appropriate and proactive manner. Download our 2019 report for more detail on each regional story.

Scotland:

  • The value of major fraud cases in Scotland more than triples in 2019.

Cases, valued at more than £15.6 million, were heard in courtrooms across the country over the last year, up from cases worth more than £4.5 million in 2018. The cases have included investment fraud, procurement fraud, embezzlement, VAT fraud, mortgage fraud and benefit fraud.

Annette Barker, Head of Forensic Regions.

North East:

  • North East fraud cases halve in 2019 and fall to £9.2 million.

There were 14 cases in 2019 worth a combined £9.2 million, down from 28 cases in 2018 worth £13.7 million. However, the value of fraud committed by those in managerial positions has risen nearly five-fold from £1.5 million to £7.2 million over the last 12 months. Meanwhile, professional criminals were responsible for the most cases in the region despite a £8 million reduction in fraud value. Government organisations were victim to the highest combined value of frauds worth £6.5 million, however, the figures represented a 14 per cent decrease compared to 2018.

Sara Smith, Forensic Director at KPMG in the North East.

Yorkshire:

  • Yorkshire fraud falls, but cases against commercial businesses creeps up.

The value of fraud committed in Yorkshire has fallen by more than 40 per cent over the past year, but cases against commercial businesses creeps up. There were 25 cases in Yorkshire in 2019 worth a combined £29 million, down from 26 cases in 2018 worth £49.1 million (down 41%). Commercial businesses were the only category to see an increase in the number of frauds committed against them, rising from just two cases worth £1.1 million in 2018 to five cases worth nearly £3 million in total. Financial institutions, the Government, investors and the general public all saw a decrease in cases. When examining the culprits of fraud, professional criminals were responsible for the most cases in Yorkshire, responsible for eight cases worth £7.3 million. A further eight cases were committed by management teams and employees worth a combined £4.4 million.

Annette Barker, Head of Forensic Regions.

North West:

  • North West fraud falls by a third, but cases targeting commercial businesses and the government remain high.

The North West saw the level of fraud activity fall by a third over the past year, but cases targeting commercial businesses and the government remain high.
The number of cases in the region fell from 57 in 2018 to 39 cases in 2019 (down 32%). The combined value of fraud in the North West fell by more than half to £59 million, from £131.2 million over the same period. The fall can be attributed to a steep decline in the number of cases committed by professional criminals, from 27 cases worth £79.2 million in 2018 to 15 cases worth £38.2 million last year. However, these fraudsters still accounted for more than a third of cases, the highest of any offender category. There was also a significant drop in the value of frauds committed by employees, down from £43.6 million to just £3.6 million. The Government and commercial businesses remained the most common targets for fraud having been the victims of 20 and 14 cases respectively, accounting for nearly 90 per cent of frauds in the region’s courts.

Damien Margetson, Head of Forensic at KPMG in the North West.

Midlands:

  • Midlands bucks national trend with fraud value increasing over twelvefold.

The (West) Midlands is the only English region with a surge in the value of fraud cases heard in the region’s courts in 2019. This was boosted by a £600 million case at Birmingham Crown Court involving three men from an internationally organised crime gang who participated in cigarette trafficking, drug smuggling and money laundering. However, both the East and West Midlands would still have seen a rise in the value of fraud cases regardless of this particular case. The East Midlands saw £28 million worth of fraud passing through its courts in 2019 (£13 million in 2018) and the West Midlands saw cases with a value of £656 million in 2019 (£41 million in 2018). Whilst the number of fraud cases brought to the region’s courts were constant year on year (67 in both 2018 and 2019), the value has skyrocketed (£54 million in 2018 and £684 million in 2019). The majority of fraud cases in 2019 were carried out by male perpetrators, mainly between the ages of 36 and 45. Whilst scheming management insiders were responsible for 17 of the 67 most prominent cases locally, by far, the greatest threat came from professional criminals who perpetrated 34 of the 67 cases. 2019 also saw a slight increase in female perpetrators, with one of the region’s high value cases being a £12 million bribery case, carried out by a 63 year old business woman.

Julie Bruce, Forensic Director at KPMG in the Midlands.

South West:

  • South West sees fewer cases of fraud, but embezzlement cases increase.

The South West has seen the number of fraud cases taken to court fall significantly in the last year, but the number of embezzlement cases has risen. There was a total of 19 cases of fraud across the region in 2019, totalling £8.5 million, compared to 30, totalling £24.6 million, the previous year. The number of embezzlement cases, however, rose from zero to seven, totalling £1.9 million in value. There was a significant drop in the number of fraud cases against government organisations in 2019, just five compared to 12 in 2018. The number against commercial businesses rose from five to eight, but the value of these cases decreased from £4.8 million to £3.3 million. Professional criminals are no longer the most common perpetrators of fraud in the South West, with employees accounting for seven of the 18 cases, followed closely by managers with six, totalling £1.9 million and £3.5 million respectively

Damian Byrne, Forensic Lead for KPMG in the South,

Wales:

  • Wales fraud cases nearly halved, but cases against financial institutions rose in 2019.

Wales saw the number of fraud cases taken to court fall by nearly half last year, but the number of cases against financial institutions increased. There was a total of 17 cases of fraud across the region in 2019, totalling £17.4 million, compared to 30, totalling £18.7 million, the previous year. The number of cases against financial institutions, however, rose from one to three, totalling £1.6 million in value. There was a significant drop in the number of fraud cases against commercial businesses in 2019, just three compared to nine in 2018. However, the value of these frauds increased from £4.9 million to £6.3m. There was also a significant drop in professional criminal perpetrators last year, down to seven cases from 13 in 2018, however they were still the most prepetrators in Wales in 2019, with a case value of £8.4m.

Damian Byrne, Forensic Lead for KPMG in the South.

South East and London:

  • Fraud in London and South East tops £286 million.

The value of alleged fraud cases appearing in Courts across London and the South East topped £286 million in 2019 – a decrease of 23% on the previous year.
160 cases of alleged fraud appeared in Courts across the region in 2019, with commercial businesses being particularly hard hit. £99 million of fraud against commercial businesses was recorded in the year, this was up on the £84 million recorded for 2018.
Professional criminals operating in the region were responsible for £158 million of alleged fraud, followed by management and employees who between them appeared in Courts across the region for crimes amounting to £120 million.

Damian Byrne, Forensic Lead for KPMG in the South.

© 2020 KPMG LLP, a UK limited liability partnership, and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative, a Swiss entity. All rights reserved.

KPMG International Cooperative (“KPMG International”) is a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm.

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