Company fraud in North tops pounds 85m

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The Independent Online
(First Edition)

COMPANY fraud is on the increase in the North of England and the West Yorkshire fraud squad, the largest provincial specialist team of financial investigators in the country, is investigating frauds totalling more than pounds 85m.

The force faces a seventeen-fold increase in commercial crimes and says there is evidence the recession is leading more companies into fraud.

The West Yorkshire force is about to launch Britain's first public fraud prevention campaign to target companies and individuals most at risk.

There has been a huge leap in commercial fraud since the 1980s. There was a steady increase between 1985 and 1989 but since then the value of the frauds has leapt to pounds 85m.

Small private companies are the largest group caught up in the crime.

The squad has discovered an increase in investment fraud, insider dealing, mortgage fraud and in particular, advance fee frauds.

It has been liaising with Customs and Excise, trading standards officials and Citizens Advice Bureaux to tackle the problem. Detective Chief Inspector Nigel Sutcliffe, head of the squad, said that during the first quarter of 1992 there was an increase on the overall outstanding figure under investigation.

'There are no signs of a decline. Indeed, the current poor economic climate is more likely to exacerbate this upward trend. There is evidence that the recession is causing people to be caught up in fraud,' he said.

The force has also found that people who have recently received substantial redundancy payments have fallen victim to fraudsters who have been promising get-rich-quick schemes.

The West Yorkshire squad has decided to be more public in its affairs in an attempt to warn the public about potential financial traps. People in Yorkshire and Lancashire have lost pensions, life savings and their homes by being caught up in various crooked schemes.

The squad, which is to hold public seminars on fraud, will try to impress on people that the greater the potential profit then the greater the risk they run.

A leaflet makes the point that fraudsters are not easy to recognise: it could, it says, be the police insurance salesman or the familiar person in the pub, or even someone they know and would never suspect of behaving in a fraudulent way.

The squad wants people to beware of schemes offering unusually high rates of profit, take time in reaching important financial decision and get advice from the Securities and Investments Board.

One difficulty the squad faces is that it is unable to warn people about individuals or companies under suspicion or investigation. It is unwilling to talk of a blacklist, except to say that its files are growing.