KPMG warns of increase in fraud
An economic slowdown in 2008, as the result of the credit crunch, could result in a rise in the emergence of high value corporate frauds, according to KPMG Forensic, based on an analysis of the twenty years of data available from its Fraud Barometer
KPMG foresses the possibility of:
- More frauds happening outside London
- Banks protecting themselves well against high value attacks
- Major frauds uncovered in early nineties recession
- Professional gangs targeting Government institutions
KPMG's Fraud Barometer, which has been running since 1987, shows that the last major recession in the early nineties was followed by the emergence of such substantial frauds as Polly Peck, Maxwell and BCCI. Over £1bn of fraud was recorded in 1993, second only to 1995 when a second wave of BCCI-related fraud pushed the value to the highest ever recorded by KPMG's Barometer, at £1.2bn.
Alex Plavsic, Head of Fraud Investigations at KPMG, warned that if the tightening economic conditions continue, it is increasingly likely that some major frauds will be uncovered: "Our analysis shows that in times of economic slowdown, when belts are tightened and processes are committed to greater scrutiny, more high value frauds have tended to be uncovered. If the current credit crunch does lead to a slowdown through 2008, we may therefore see the detection of some high value frauds in its wake," he said.
