The total value of frauds reported increased by just under a third last year to reach a five-year peak, with London remaining a criminal hotspot, figures released today show.
BDO's FraudTrack, which keeps tabs on UK reported fraud cases with a value over £50,000, found total reported fraud in 2016 rose to £2bn, up 31.5 per cent from £1.5bn the year before, even though the total number of cases fell to 504, down 2.9 per cent from 519 in 2015.
The fall in case numbers also means the average value per fraud in 2016 rose 35.4 per cent to £3.9m.
London and the south east remained a criminal hotspot, both in terms of number of frauds and their total value, despite both figures falling for the year.
The region recorded the highest number of frauds – 159, down 9.1 per cent from 175 the year before – and the second highest value of total frauds – £381.4m, down 36.4 per cent from £599.8m – of all the geographic areas studied by BDO.
The capital was only outdone for fraud value by Yorkshire, which recorded a rise of 388 per cent to £1bn, thanks mostly to a single case of large scale VAT fraud.
A substantial chunk of London's fraud figures related to a £79.5m Ponzi scheme, run by a group of men who falsely claimed their company had been tasked with kitting out the Olympic village.
"Sadly, the findings of this research are just the tip of the iceberg and many frauds continue to go on undetected," said Kaley Crossthwaite, partner and head of fraud at BDO. "In many instances, even when they are picked up, corporates prefer to resolve the situation privately to avoid the public scrutiny that inevitably comes from going to court."
Meanwhile, frauds in the financial and insurance sector dropped for 2016, with the total value falling to £214.9m, down 62.1 per cent from £567.2m, while the total number of cases dipped to 58, down 17.1 per cent from 2015's 70.
In particular, the value of money laundering cases in this sector fell sharply, going from £201.6m to £98.9m.