19 Jul 2010

Fraud expected to rise to record level

7:27 pm on 19 July 2010

KPMG warns that white-collar crime looks set to rise to a record level this year.

Its latest fraud barometer report shows companies were defrauded of $72 million in the first six months of this year, more than triple the amount lost in the same period last year. About $100 million worth of large fraud cases was uncovered in the whole of last year.

The report is based on fraud cases in which more than $100,000 or more was stolen. For a case to be included in KPMG's data, charges must also have been laid.

KPMG forensics partner Stephen Bell says the amounts being taken are getting bigger, but the results are not unexpected in these tough economic times.

Fraudulent loans, which totalled $51 million, accounted for most of the losses; the next biggest category was accounting fraud ($9 million lost).

Managers were more likely to commit fraud more often than junior employees and took almost twice as much.

The lobby group Business New Zealand says the figures are just the tip of the iceberg, and the executive director of the Centre for Business Ethics, Rodger Spiller, says it shows that business practices need to be more closely looked at.

Only 16% of the NZX Top 50 companies have advanced ethics systems, Mr Spiller says.