More than £3.5 billion worth of fraud was recorded in 2011, a record year, as a result of the continuing poor economic conditions, a study has revealed.
KPMG's Fraud Barometer showed that £2.5 billion worth of fraud was recorded in the second half of the year alone. This figure was partly boosted by five large fraud cases of more than £50 million coming to court. The study alluded to the £1.3 billion fraud allegedly committed by UBS rogue trader, Kweku Adoboli, which has not yet come to court. Even without this case, the final six months of the year would still have been the highest recorded six-month figure.
Hitesh Patel, KPMG forensic partner, said: "2011 was an extraordinary year for fraudsters -- as demonstrated by the record losses through large-scale cases of fraud which dominated the headlines.
"The economic uncertainty has been the double edged sword behind these numbers: companies and government agencies have rooted out more fraud through implementing austerity measures and operational changes while at the same time 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 public sector suffered more than £1 billion worth of fraud, although the financial sector was the main target, with 59 cases recording a total of £1.5 billion.
Fraud by management accounted for 57 cases with a value of £729 million, the report added. This represented a cost increase of 74 percent, despite a similar number of cases.
The report said: "Management often inflict the greatest damage to an organisation as they are able to operate fraudulently with greater ease by virtue of the trust and authority placed in them and their ability to conceal their tracks more convincingly."