Economist Chart: Surge In UK Fraud Cases

Since we’re talking financial crimes….

….here is a chart from the Economist depicting the surge in fraud cases hitting the British Courts in the wake of the credit crunch.

Graphic courtesy of economist.com

From the Economist:

FRAUD cases involving sums over £1.1 billion ($1.6 billion) were brought to Britain’s courts in 2008, the highest amount since 1995, according to KPMG Forensic’s Fraud Barometer. The number of cases is also at its highest point since the barometer began some 20 years ago. And fraud is likely to rise further. Because fraud can take months or even years to be discovered and come to trial, dodgy dealings from the credit crunch are unlikely to have reached the courts. Company managers, employees and customers were tried for frauds of some £300m last year, three times the value in 2007.

I think what happens during a “boom periods” not only attract fraudsters but they also make it easier for people to hide their illicit activities, as a result not only do you have increased fraudulent activity but the boom helps expand the size and scope of their activity. On the flip side busts tend to not only make frauds easier to discover, but it leads other people to commit fraud as a way to keep the gravy train running.

Assuming my theory is correct it’s an interesting yet vicious double-edged sword.

Back in ‘07 I predicted that we were going to see a surge in fraud cases in the wake of credit crunch, let’s hope that we’re seeing the tail end and not the tip of the iceberg. This is no a situation I want to be right about.

Disclosure: at the time of publishing the author didn’t own a position in any of the companies mentioned in this article; the ideas expressed are solely the opinions of the author and shouldn’t be viewed as financial or investment advice.

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