Rise in reported fraud in Yorkshire, says BDO analysis

18th February 2015

The volume of reported fraud across the region has increased in the last 12 months, with third party fraud via firms' suppliers and customers now accounting for half of Yorkshire's £49.

5m total, according to BDO LLP's Fraud Track research. The accountancy and business advisory firm's 2014 analysis, which examines reported fraud cases with losses of over £50,000, found that the number of cases in Yorkshire last year rose slightly to 56 (from 52 in 2013). Corporate fraudsters that pose as legitimate customers, suppliers or other third parties caused a big problem for companies this year, indicating the need for firms to tighten up their systems and controls, along with their fraud awareness. One example is the £15m advertising scam by an East Yorkshire man, who defrauded companies with a small business directory website called EBH Web Ltd. He sold advertising space under false claims for 'guaranteed business' and locked clients into long-term contracts. Other fraud cases last year include a £3.5m money laundering scam by Bradford-based doctors, who set up a series of fake companies to launder criminal money and transfer it abroad. A Leeds-based NHS boss is also accused of stealing £3m of public money; and three Rotherham men have been jailed for their part in a £2.8m mobile phone fraud, that saw them scam Vodafone by hacking customer accounts. Despite the increase in the number of reported fraud cases, the combined value of fraud in the region dropped from £53m in 2013 to £49.5m - slightly less than the North West (£50.2m) which has the highest level of fraud outside London & South East. Adam Smith, forensic director at BDO in Yorkshire, said: -One of the reasons we are seeing a drop in values despite the increase in volume is due to a growing trend for high value complex fraud being dealt with outside the judicial system and out of the public eye. Companies are increasingly assessing the reputational cost of a public case to their business, with many preferring to deal with perpetrators through civil not criminal - remedies. Leeds once again has the region's worst fraud record, with over a third of all reported cases in Yorkshire. The finance and insurance sector suffered the most from fraudulent activity with £5.7m worth of activity, followed closely by public administration (£5.2m). The total value of UK fraud in 2014 (£720m) was the lowest since Fraud Track started in 2003. However, the total number of reported cases actually rose to a record number (546), while the average value continued to fall from £3.3m (2012) to £2.0m (2013) and £1.3m in 2014.

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