Number of high value Scottish fraud cases falls but total value increases fivefold

KPMG’s Fraud Barometer, which measures fraud cases with losses of £100,000 or more reaching Scottish courts, found the average value of each case was £2.7 million compared with £0.4 million in 2015.

In particular, investor fraud made up more than three quarters of the total value of fraud committed (£19 million).

Where in previous years, employees were responsible for the majority of significant instances of fraud, 2016 saw the figure fall by more than 70 per cent, with only two cases coming to court, compared with seven in 2015.

Conversely, fraud perpetrated by management was on the rise, accounting for over half of all cases heard in 2016.

Ken Milliken, head of forensic for KPMG in Scotland, said: “While the number of instances of high value fraud have fallen, unfortunately we have seen a large increase in the total amount involved. Although one case in particular makes up the bulk of that increase, the average value of cases is still up across the board. Investment fraud can affect all of us if we are not wary.

“Although employee fraud has fallen, we know that insider fraud is still something which deeply concerns businesses and the threat remains. What will be troubling CEOs is the rise of fraud undertaken by those in a position of power. The latest findings reflect a substantial shift in the source of fraud from that of lower ranking staff for lower amounts, to much higher values being stolen by more experienced and senior staff exploiting positions of power and trust. What companies need to ensure is that processes and safeguards are reviewed to reflect this changing face of fraud and that there is level of oversight for all staff, regardless of position within an organisation.”

The cases recorded in 2016 include: