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High value fraud continues to rise as prosecutions slow down

Posted on 31 August 2022

New research has revealed that the UK is facing a growing tide of high value fraud. The total value of frauds exceeding £100,000 that reached the Crown Court in the first half of 2022 was £532.6 million. This figure represents a 288 percent increase from £137.4 million for the same period in 2021. The first half of 2022 saw seven Crown Court cases where the value of the alleged fraud ranged between £10 million and £50 million and one case where the value of the alleged fraud was £266 million.

One of the main drivers of this new wave of high value fraud is the increasing digitisation of the banking sector. High volumes of digital payments that are processed in a matter of seconds and decreasing branch networks have provided a fertile ground that fraudsters have exploited. According to the latest figures there has been an increase in prosecutions for embezzlement and advance fee fraud, with money laundering perhaps unsurprisingly the highest value offence of fraud being committed.

The increase in the value of fraud cases has ironically coincided with a decrease in the total number of fraud cases being heard in the Crown Court. Figures from research undertaken by KPMG show that there was a 13 percent drop in the first half of 2022 in the total number of fraud cases heard compared with the same period last year.

The situation has been exacerbated by the fact there are now record waiting times for cases to come to trial in the Crown Court which is dealing with a backlog of nearly 60,000 cases. The backlog will continue to increase as the criminal bar commence an indefinite strike from 5 September in response cuts to legal aid.

The Government has come under increased pressure to do more to tackle the rising tide of fraud in the UK. One flagship measure in response to this has been the creation of the Public Sector Fraud Authority ("PSFA") which was set up at the cost of £25 million to understand and reduce the impact of fraud. The PSFA is currently exploring the creation of a civil and criminal enforcement unit that will tackle public sector fraud. However, it is clear that the Government and bodies like the PSFA will have to do far more to address the issue of high value fraud in the face of record Crown Court waiting times and innovative tactics used by fraudsters.

At present it appears that we can expect to continue to see an uptick in high value frauds in the UK. Once these frauds are discovered it is likely that they may not be heard by the courts for a number of years and it remains to be seen what action the Government will take in response to this.

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