Fraud level hit a record high last year amid economic downturn

THE level of fraud reached an all-time high last year, and the economic downturn is likely to trigger more financial crime, according to KPMG’s Fraud Barometer.

Research published today shows fraudsters stole a record £3.5bn last year, with a huge surge in the second half, when £2.5bn of fraud was recorded.

The figure was pushed higher by the trades that claimed £1.3bn from UBS, but even without including that, 2011’s second half would have been the worst yet for fraud.

KPMG’s Hitesh Patel warned: “The pressures on individuals as a result of the downturn continues to act as a catalyst for more fraud being perpetrated. These figures represent the thin edge of a much bigger wedge.”

The barometer has tracked fraud court cases involving more than £100,000 every year since 1987.

It reveals £729m was stolen from companies by their own management – up 74 per cent on 2010.

The largest portion of fraud – £1.4bn – was carried out by professional criminals but employees almost equalled that tally with fraud worth £1.3bn.