White collar fraud cases hit 15-year high

Posted on 22 January 2018 by Kelly Jean Williams and Gareth Minty

White collar fraud cases hit 15-year high

In 2017, the number of large fraud cases - i.e. those in which the loss exceeded £50,000 - soared to a 15 year high of 577 cases. This resulted in a loss of more than £2 billion - an average of £3.66 million per case.  The total loss from fraud in the UK for the year  is estimated to be as high as £190 billion. 

According to the figures released, private sector firms were hit the hardest: last year, employees were responsible for the largest proportion of fraudulent transactions at a value of £474.3 million.  After that, tax fraud accounted for losses of £351.8 million, with corruption, financial account management frauds and money laundering also prevalent offences. 

The release of the 2017 fraud statistics comes hot on the heels of the announcement by the Government that it plans to form a National Economic Crime Centre ('NECC') with responsibility for the wider coordination of UK law enforcement's response to white collar fraud and corruption.  With questions being raised about the funding arrangements for the NECC, Lynne Owens, Director General of the National Crime Agency, has called for profits from the banking and insurance industries to be funneled into the new initiative. 

Funding, of course, is not the only challenge confronting any strategy aimed at reducing the spiraling number of large frauds.  Given the pace of technological change, there is an ever increasing amount of evidence to analyse when investigating such cases. The Commander of Economic Crime for the City of London Police, David Clark, recently said that his force faces reviewing 70 million pages of evidence on the basis of their current fraud caseload alone. 

This large volume of evidence, when allied to the corresponding disclosure duties on the prosecution (link), is causing delays of up to three years in the charging of fraud cases, which has led Commander Clark to call for disclosure rules to be re-examined.  For their part, the UK's policing think-tank, The Police Foundation, suggests that the problem is in fact the criminal justice system's inability to keep up with changes in technology, rather than the disclosure regime itself.  Continuing with that theme, Ms Owens has suggested that certain police capabilities, for example digital forensics, should in future be deployed at a national, rather than regional, level.

With the rise in fraud cases showing no signs of abating, it is a positive development that such issues are at least forming part of the debate on what is undoubtedly an issue of national importance. Those who are currently falling victim to serious economic crime may be left wondering how they can achieve justice. Some are already finding that the right to bring a private prosecution is a valuable alternative to relying on the hard-pressed authorities.