Cost of fraud in Scotland soars to £18 million

The BDO FraudTrack report, which monitors all cases of reported fraud cases over £50,000, found that the highest value reported fraud for £6 million was in Dundee and involved a money laundering scam known as “cuckoo smurfing”.

This involves replacing legitimate cash intended for bank transfers overseas with so called “dirty” money.

The cuckoo element refers to the depositing of funds in the accounts of unsuspecting individuals.

By far the largest number of frauds in Scotland involved theft and cash which accounted for 42 per cent of all frauds during 2015.

In one example, an NHS worker stole £1.3 million worth of medical equipment which he then sold.

Another example involved an assistant in an accountancy firm who handled charity clients who transferred £726,000 from trusts established to help good causes to other accounts.

Sat Plaha, head of regional forensic services with BDO, said: “Theft and cash fraud is by far the most common method of defrauding a business.

“This is because many businesses simply do not have sufficient checks and balances within their operation to ensure that trusted employees cannot exploit loopholes.

“The problem is that individuals will always be placed in positions of trust – it just depends whether they decide to use that position for their own gain.”

Mr Plaha added: “Fraud is almost always about greed. People don’t defraud others because of any particular need but simply because they identify an opportunity and then take advantage of their situation for their own gain.”