Changing environment

Pandemic ‘opportunities’ fuel rise in fraud cases

Fraud has risen sharply during lockdown

Fraud cases heard in Scottish courts rose dramatically last year, driven by temptations arising during the pandemic and a backlog resulting from the restrictions.

A total of 16 cases totalling £5.9m reached Scottish courts in 2021, according to KPMG UK’s Fraud Barometer, against just one case in 2020 worth £240,000.

Most cases had a value of between £100,000 and £250,000, with one involving £1.1m. Eight of the 16 cases in Scotland concerned commercial businesses, all of which were targeted by their own employees or management.

Annette Barker, head of KPMG Forensic in the UK, said: “Rising fraud cases in Scotland reflect the changing environment criminals have adapted to in the past 12 months.

“COVID-19 changed many aspects of our working lives and how businesses operate, creating more means, opportunity, and motive for people to commit fraud.

“While cases have risen in Scotland for all forms of fraud, it is promising to see more cases being detected and brought to court.

“It’s increasingly important for organisations and the public to be aware of increased threats, particularly online fraud, and implement preventative measures where possible to reduce their risk of falling victim.” 

The number of alleged fraud cases heard in UK courts in 2021 went up by 66% compared to the same time in 2020. Despite another lengthy COVID-19 lockdown at the start of 2021, UK courts appear to have got back on their feet and made headway with the backlog of cases that built up because of initial COVID-19 measures.

Case reaching Scottish courts included:

  • A shop owner who was charged with fraudulently evading £1.1m in tax by suppressing the total value of sales submitted in quarterly VAT returns. Prosecutors stated the individual did this with the “intent to deceive.” [ongoing case as of October 2021]
  • An operations admin assistant who pleaded guilty to embezzling £500,000 from a college. She purchased IT equipment using the college’s bank accounts and then sold the items on for personal profit.
  • A man who pleaded guilty to embezzling £245,000 from his employer to fund his gambling addiction. The finance officer, who was responsible for payroll, deliberately overpaid companies and then requested the firms to refund the surplus back into his personal bank account. The fraud was uncovered during an audit which identified discrepancies.

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