Annette Barker

A total of 24 cases totalling £17.4 million reached Scottish courts in 2022, up from 2021, when 16 cases worth £5.9m came to light, an increase of 194%.

Commercial businesses were the victim of five cases of fraud in Scotland with a combined value of £1.3m. Four of these cases were instances of embezzlement fraud worth a combined total of £604k. By both volume and value, the general public were the victim of the most cases with 11 cases in 2022 compared to 3 in 2021. The total value of fraud against the general public also increased to £10.3m, up from £1m in 2021.

13 out of the 24 cases had a value of between £100k - £250k, however one case involved a 24-year-old Ayrshire man scamming £7m from a top US Bitcoin broker.

Annette Barker, head of KPMG Forensic in the UK, said: “The dramatic increase of fraud cases coming to light in Scotland is worrying, particularly with many cases involving rogue employees abusing their positions of trust to steal money from their employers, clients and other partners.”

Sandra Aitkenhead, senior manager, Forensic at KPMG in Scotland, said: “Businesses must do all they can to maintain adequate controls to prevent serious fraud from being committed. Without the right safeguards in place, businesses across Scotland will unfortunately continue to be victims of crime and incur the reputational and financial damage which comes with it.”

Other cases of note in Scotland during 2022 include:

• A 40-year-old woman who was charged with five fraud offences totalling £238.5k. These included scamming an 85-year old pensioner by pretending to be in a relationship with him and submitting fraudulent loan and vehicle finance applications on his behalf.
• A 38-year-old woman pleaded guilty to a fraudulent cheque scam with a large bank after she deposited five cheques totalling £1.5m without having sufficient funds in her account.
• A 37-year old businessman was imprisoned for 33 months for carrying out a £736k gift card scam after exploiting a ‘secret loophole’ in the system.

The total value of alleged fraud cases £100k or above heard in UK courts increased by 151% from £444.7m in 2021 to £1.12 billion in 2022, according to data released in KPMG UK’s latest Fraud Barometer.

The figure for 2022 is similar to pre-pandemic values which saw a total value of £1.1bn for alleged fraud cases heard in 2019.

Fraud cases against financial institutions halved in 2022, with only 16 cases being heard compared to 32 in 2021. Despite this, the value of fraud committed against financial institutions in 2022 increased dramatically by 2204% to £609.2m.

Roy Waligora, partner and head of UK Investigations at KPMG, commented: “In 2022, we saw the total value of fraud in the UK return to pre-pandemic levels as a few high value cases boosted the numbers.

“This comes as professional criminals have continued to attempt to line their pockets with high value fraud against financial institutions and their customers.

“The slight drop in volume of fraud cases heard does not mean that fraud in the UK was any less prevalent in 2022.

“The impact of fraud remains a real concern in the UK, however, the decrease in the volume of cases may be an indication of pressure on authorities and that some fraud cases are not resulting in charges, as recently outlined by the National Audit Office.”

Embezzlement has remained the most common fraud type for 2022, albeit with fewer cases than in 2021. There were 36 cases of embezzlement with a value of £100k or above heard in UK courts in 2022, compared with 51 cases in 2021.

However, the total value of these cases increased by 37% to £38.9m. This total value includes a case which saw an employee steal £6.7m from company accounts.

Mr Waligora said: “Embezzlement can be a big problem for businesses as employees and management look to exploit their positions. It is very important for businesses to have channels to report fraud and when businesses become suspicious about any fraudulent activity, that they act swiftly to uncover the facts so they can take decisive action against the individual or individuals.

“This is especially relevant as companies start to address the requirements of a Fraud Statement in their annual reports.”

Investment fraud also saw a large increase in value despite only six more cases being heard in 2022 than in 2021. In 2022 19 cases were heard in UK courts amounting to a total value of £181.8m, compared to 13 cases in 2021 which had a combined value of £12.5m, a 1358% increase in value.

Mr Waligora added: “While these cases may seem alarming, it is positive that these cases are making it to UK courts as these alleged crimes are exposed. However, businesses and institutions themselves need to be doing more to stop money laundering activities which are achieving such high values.

“As for investment fraud, investors and potential investors need to be wary of any investment opportunities. They should ensure they are doing their due diligence first by seeking advice and checking the FCA register.”