High-value fraud losses halved across Scotland in a year

CASH lost to high level frauds in Scotland has halved in a year, according to forensic accounting research.

Money lost to alleged fraud in cases worth £100,000 or more has fallen from £3.8 million in the first half of 2017 to £1.8 million in the first six months of this year, finance firm KPMG found.

However, the number of these cases reaching court in Scotland remains unchanged between the two periods, at nine.

While high value fraud losses have fallen overall, embezzlement cases have increased in both value and volume, as staff stole money from employers.

Embezzlement was the main source of alleged fraud in Scotland accounting for £1.1 million of total value lost, and five cases in the first half of 2018, compared to two in the same period the previous year.

Those sentenced at courts in Scotland for high-value frauds so far this year include finance clerk Robert Crawford, 72, from Broxburn, West Lothian who embezzled £600,000 from Scottish Widows.

He was jailed for two years for the 14-year scheme involving targeting unclaimed policies and moving funds into his own bank account, using them for holidays to Thailand, Indonesia and on the Trans-Siberian railway.

Charity worker Lesley Dickinson was jailed for three-and-a-half years for embezzling £136,246 from the Scottish Wildlife Trust and Tandem Digital Marketing, leading to the latter business entering liquidation and staff losing their jobs.

Ken Milliken, Head of Forensic for KPMG in Scotland, said: “Cases of embezzlement in Scotland have risen and yet the overall value of alleged fraud being committed has halved compared to last year.

“The figures suggest more businesses have been affected by embezzlement but that employees have attempted to steal smaller sums, reducing the chances of being caught.

“One case saw an employee steal £600,000 over the course of fourteen years, spreading out fraudulent activity and therefore taking longer to be discovered.”

“The cases show how important it is for businesses to have safeguards in place to minimise the risk of embezzlement, such as making sure that employees in key positions are supervised and there are strong controls over cash payments.

“This may seem simple, but smaller businesses are often stretched for resources, and in one particular case this year, the resulting fraud led to the liquidation of a small firm.”

The nine cases account for less than 0.5% of the £895 million lost to high level fraud in 252 cases across the UK in the first six months of 2018.

Mr Milliken added: “Overall, while the value of cases in Scotland remains low in contrast to other regions in the UK, businesses must remain vigilant, particularly in this period of accelerating change, with growth in new technologies, pressure on staff costs and the ease with which money can be moved.”