Most fraud is committed by company insiders

Company insiders are the biggest perpetrators of fraud against businesses, committing nearly two-thirds of all cases, new figures reveal.

Fraud by management and employees within organisations made up two thirds of the incidents costing £374m between January and June 2012 this year, according to KPMG's Fraud Barometer.

The absence of a single piece of major corporate fraud saw the overall level of the financial crime drop by £726m in the first six months of this year, from £1.1bn during the same period of 2011. The previous year saw a number of large frauds coming before the courts perpetrated by professional criminals against the public purse, including massive "missing trader" VAT fraud.

But Hitesh Patel, UK forensic partner at KPMG, said that revealed more about the nature of the fraud cases against British firms. "The extent and impact of fraud perpetrated from within businesses has historically been masked by a handful of exceptionally large cases coming to court," he said. "The fall in such 'super' cases now shines a spotlight on the chronic and pernicious threat to businesses in these austere times."

The largest group of insider fraudsters came from management. "The level of fraud by this group has remained stubbornly stable at £206m across 34 cases, and serves as a warning sign against complacency for business," KPMG added.

One case even involved a former head of counter-fraud operations at a bank, who undertook procurement fraud to the tune of £2.4m.