Monday, August 13, 2007

Fraud endemic in Business as reports show 42% increase

Fraudsters fraudsters everywhere, and not a regulation in sight effective enough to stop them ...

With fraud becoming an almost accepted part of culture in business nationwide, there seems little top stop the armies of unaccountable fraudsters out there ...

No big surprise the public feel the legal profession are some of the most unscrupulous in this area, but that's down to the policy of the heathens at the Law Society of Scotland for allowing that one to pass.

Crooked people abound in all walks of life, but crime certainly seems to pay for some, reports the Herald :

Survey says crime pays as business fraud rises by 42%

ROBERT FAIRBURN August 13 2007

Crime does tend to pay if you are a business fraudster, according to new research.

Low risk of prosecution and lenient sentences combined with lucrative rewards are cited as the major reasons for tempting criminals and not deterring opportunists.

The study revealed that there were 10 reported cases of business fraud in Scotland during the first half of 2007 totalling £3.45m. It showed fraud involving British business 42% up on last year.

The Fraudtrack research was carried out by BDO Stoy Hayward, part of the world's fifth-largest accountancy network, BDO International.

It states that greed is the main motivator with nearly three-quarters of frauds fuelled by the desire for money or a lavish lifestyle.

The frauds have been split into two categories - multi-million pound VAT frauds and frauds against businesses.

Researchers predict that recent legislation aimed at reducing VAT carousel frauds will not prove effective as gangs will reapply methods used to commit frauds involving mobile phones, tobacco, alcohol, fuel and cars on to other other easily transportable high-value items.
If you are found out there is only a small chance of being prosecuted

They point out that so far in 2007, just 23 VAT carousel frauds accounted for £468m, more than in the whole of 2006. Also known as "missing trader" fraud, carousel fraud involves gangs repeatedly moving goods, such as computer chips and mobile phones, between EU countries, claiming a VAT refund in each to take advantage of the tax's zero-rating for cross- border transactions.

The research also found that frauds against businesses usually involved employees or directors in positions of trust but only 15% of the frauds uncovered led to a criminal prosecution. Judith Scott, forensic director at BDO Stoy Hayward in Scotland, said: "Sadly, crime does often pay at the moment if you are a fraudster which explains why large frauds are on the increase - this is a crime driven by greed.

"Professional criminals have been quick to notice the millions that can be made from VAT carousel frauds. While there has been a crackdown, I am sceptical it will halt this avalanche of huge frauds against the taxpayer."

She added: "If you make tens of millions and then succeed in keeping even a few per cent hidden when you get caught then you will end up with a small sentence and a large amount hidden in an offshore bank.

"When it comes to fraud against businesses, if you are discovered there is only a small chance of being prosecuted. When a fraud is discovered, all but the very largest are not a priority for the police given their limited resources.

"Businesses, not surprisingly, focus on getting the money back and protecting their reputations , so few of such cases - less than 15% - result in a prosecution. In this case, the worst a fraudster will face is losing their job and having to repay most of their ill-gotten gains.

"Many fraudsters are laughing all the way to their offshore tax havens."

The research was based on reported fraud over £50,000 involving businesses. Sources included the Serious Fraud office, the Department of Trade and Industry, the Metropolitan Police and national and regional press.

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