OLD-FASHIONED scams are making a comeback in the region, with the majority hitting businesses carried out by insiders, new research shows.
According to the latest KPMG Fraud Barometer, the North East saw 15 large-scale frauds, valued at more than £100,000, which reached the courts during 2012. The total value of these cons was £21.2m.
They included a £440,000 fraud by a company director who secured false payments to keep his struggling business afloat during the recession, and three cases of alleged tax fraud totalling £834,000.
Meanwhile, a conman who defrauded his often elderly victims by gaining access to their bank accounts stole £774,621. Sara Smith, of KPMG’s Newcastle forensic practice, says: “We are seeing individuals looking to feather their nests through ripping off employers, banks or the Government.
“In the last few years, we have become used to sophisticated frauds at eye-watering values. More recently, the total value of fraud has dropped in the absence of so-called fraud ‘super’ cases, but the old-fashioned conman hasn’t given up his tricks.
“Times may be tough but the data shows that some people are unwilling to give up the lifestyles they’ve become accustomed to.”
Overall, the figures showed an increase in individual traditional frauds such as identity theft, cheque fraud, procurement fraud and Ponzi schemes, which pay returns to investors from their own money or the money paid by subsequent investors, rather than from profit earned.
Nationally, the report calculated that 2012’s total value of fraud stood at £824m, with identity fraud more than doubling to £26.3m from £12.3m in 2011.
Counterfeit goods fraud hit £22.9m and Ponzi Schemes worth £72m came to court – more than three times 2011’s value.
Companies were hit by 35 employee fraud cases with scams carried out by either management or staff responsible for 80% of the financial loss suffered by defrauded businesses.
The figure was up from 22 cases in 2011 and the value more than doubled to £25.1m from £12m.