Fraud in Scotland increased 67% to fund greed and lavish lifestyles
Cases of financial deception north of the border rose by two-thirds in 2014 compared to the previous year, when fraud levels were falling across the UK.
The findings in the latest BDO FraudTrack of all reported fraud cases above £50,000 showed the total value increased by more than £4 million to £10,130,000 in Scotland last year.
There were 29 cases in Scotland and £6,974,000, equivalent to 68% by value, involved finance and insurance. The largest case involved six individuals who carried out a £3m mortgage fraud.
Fourteen of the frauds involved theft and cash with a value of £2,407,000. The largest involved a finance chief at an oil company who defrauded them of £1m.
Perpetrators of almost half of the 29 cases said they carried out the fraud for greed or to fund a lavish lifestyle. Four cited debt, two a gambling problem and one divorce.
In the UK the total value of fraud in 2014 was £720m, down 31% from the previous year and the lowest value since 2003.
Paradoxically, the latest FraudTrack report finds the total number of reported cases rose 4% to a record 546 cases.
The average value of fraud continued to fall from £3.3m in 2012 to £2.0m in 2013 and £1.3m in 2014.
In Scotland the average value of fraud in 2014 was £349,310 up from £263,282 in 2013.
Scottish director of fraud at BDO LLP, Judith Scott, said: “The large value of the finance and insurance frauds is largely based on mortgage fraud, which clearly remains an issue for lenders.
“It would seem that determined individuals can still get through the checks and balances of lenders to misappropriate large sums of money,” she said.
“The large number of theft and cash fraud is a worrying indication that many companies simply do not have suitable security arrangements in place to prevent such frauds.
“Such frauds tend to be fairly simple arrangements which exploit a loophole in a company’s financial systems. Often these can easily be detected but are carried out by someone in a position of trust.
“However, the growth in number of reported frauds suggests that the police and courts are becoming increasingly effective at convicting low level fraudulent activity.”