THE region had some of the country’s highest incidents of major fraud last year.
A report by KPMG highlights the growing problem of financial fraud across the UK and concludes it was one of the most significant crimes of the past decade.
Outside London and the South- East, the region had the highest number of serious cases last year with 42 involving £100,000 or more out of a UK total of 271.
The figures released today show that there was £1.3bn worth of crime before Britain’s courts last year.
Taken together, the past decade saw a major rise in serious fraud cases compared to the 1990s – some 1,750 cases of serious fraud where the charges are at a value of £100,000 or more came to court, compared to 700 cases in the Nineties.
More than £7bn of fraud was heard in courts in the Noughties compared to less than £5bn in the Nineties.
In the North-East the decade has been rounded off in 2009 with 13 cases of serious fraud totalling £90m.
Those cases included:
● A property business that defrauded investors of £80m as the money invested was not spent developing properties in the region for rent but instead funded extravagant lifestyles for the company management;
● A business fraud conspiracy which resulted in companies across the region losing £627,000, after a group of individuals established businesses which ordered goods and failed to pay the suppliers for them.
Sara Smith, of KPMG’s forensic practice in Newcastle, said: “The last decade, I am afraid, could certainly be dubbed the ‘naughty Noughties’. The credit crunch will undoubtedly make the situation worse, and we are yet to see the full impact of it.
“The forecast therefore is getting worse. The comfort, if there is any, is that more fraud cases are successfully being brought to court.
“Despite great efforts made to tackle white collar crime, companies will need to remain vigilant as the problem will never be eradicated.
Fraudsters will only get more sophisticated.”
The 2009 figures continue a trend of historically high fraud levels that has been especially evident since 2005.
The past five years have seen a particularly worrying change where annual fraud in the UK has been at or near £1bn with 200 cases or more.
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