KPMG: Court closures and delays lead to Scotland recording only one high-value fraud case

KPMG: Court closures and delays lead to Scotland recording only one high-value fraud case

Annette Barker

Scotland has officially recorded only one high-profile fraud case for the entire period of 2020 as COVID-19 continues profound logistical challenges for the country’s justice system.

The latest data from KPMG’s Fraud Barometer report reveals a single case of alleged fraud, valued at more than £100,000, in 2020. In comparison, Scottish fraud cases in 2019 were valued at more than £15.6 million.

Scotland’s only high-profile fraud case involved a Crown Office worker who was in charge of evidence at the Procurator Fiscal’s office.

The 34-year-old was jailed for three years and nine months after it emerged she’d stolen nearly £92,000 and drugs worth more than £147,720 between 2011 and 2019.

The latest fraud findings follow the launch of Police Scotland’s ‘Take Five To Stop Fraud’ campaign, warning Scots that they’re seeing a significant rise in fraud, driven in-part by COVID-19, as fraudsters use increasingly sophisticated methods to target vulnerable individuals and companies.

Annette Barker, head of forensic at KPMG in Scotland, said: “Six months ago we reported no high-value cases of fraud going through Scotland’s court system. At the time we said the country could witness a tsunami of cases. It’s deeply concerning to see that court delays and closures have effectively shut down the criminal justice system as it attempts to deal with a suspected increase in fraud, driven by people who’ve taken advantage of the COVID-19 pandemic.

“Naturally, the pandemic has created a profound degree of uncertainty and challenge, so some cases may not have been reported and there could be delays in aspects of information being shared with the public. However, it goes without saying that 2021 will be an incredibly challenging year for the Scottish courts as they try to wrestle with a major backlog in cases. Regardless of the lack of cases coming to courts it is important for individuals and organisations to remain vigilant in their fight against fraud.”

2020 saw a record fall in the value and volume of alleged fraud cases heard in UK courts, according to the latest data released in KPMG’s annual Fraud Barometer.

The Fraud Barometer, which records fraud cases of more than £100,000 reaching UK Courts, reported a 51% drop in the volume of cases heard in 2020 – a total of 180, compared to 369 in 2019 - as COVID-19 lockdown restrictions negatively impacted the efficiency of courts processing.

The COVID-19 pandemic saw the value of alleged fraud cases reach just under £724m (£723.9m), down from £1.1bn in 2019. One film piracy case, which if successful would have cost the industry an estimated £200m, nearly doubled the value of fraud committed up to July 2020. By excluding this outlier, the data for the whole of 2020 demonstrates a significant decrease in the value of fraud cases compared to last year.

Roy Waligora, head of UK investigations at KPMG UK, added: “As we reflect on the 2020 fraud data, the brewing backlog of untried cases continuing to build up like water behind a dam cannot be ignored. Businesses and the general public must be cognisant of the fact that the drop in both the value and volume of fraud cases is not reflective of a downturn in economic crime, but rather fallout following the COVID-19 lockdown restrictions on the courts.

“We know that disruption and uncertainty make for inviting economic components for fraudsters. COVID-19, coupled with Brexit, which tipped the scales towards the end of 2020, means that 2021 will remain at high risk for fraud and economic crime.

“While a tsunami of fraud is still expected to hit the courts in 2021, it is evident that progressive measures, such as virtual courts, being put in place to manage the upcoming cases will likely ease the backlog.”

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