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State bears the brunt of fraud in 2010

10 January 2011

Cases involving fraud committed against the UK public purse rocketed in 2010, jumping from 59 in 2009 to 70 last year, totalling £571m, according to the latest KPMG fraud barometer. This rise comes against a backdrop of continuing high rates of fraud across all sectors.

Ken Milliken, associate partner, risk and compliance for KPMG in Scotland, said: “Government agencies, like commercial businesses, have been increasingly vulnerable to the threat of fraud. In a year of austerity measures implemented by Government, tax increases, the threat of rising unemployment, and significant structural change it is hardly surprising that the long fingers of the fraudster have reached into the public purse.

“Fraud is not a victimless crime, particularly at a time when the country deficit is so high. Anti-fraud measures need to be reviewed and amplified by the public sector to combat this assault,” he added.
Professional criminals remain the UK’s biggest single fraud threat, according to the report, recording a total of £709m in 2010 (52%) compared to £718m in 2009.

The total value of fraud cases in Scotland rose to £43.4m last year, more than double 2009’s value of £20.8m. Much of this increase is attributed to three linked cases involving illegal fishing frauds, which between them totalled £37million.

Ken Milliken argued this trend will continue into 2011: “It is difficult to read into Scotland’s 2010 fraud figures due to the large value associated with the large fishing case. However, economic uncertainty and fraud make good bedfellows and as the austerity measures hit the public purse, people might be tempted to verge into illegal activities.

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