In-house fraud doubles in a year

THE VALUE of fraud committed inside British companies more than doubled last year to pounds 671m and the upward trend is continuing, according to KPMG Peat Marwick.

David Carter, head of the accountants' forensic unit, said yesterday that there had already been pounds 571m of fraud recorded in the first four months of 1993.

Mr Carter said the worsening figures in the firm's four-monthly Fraud Barometer were not just due to people being driven to crime by the recession, but fundamentally 'people are getting more dishonest'.

Mr Carter claimed this trend was borne out by the age profile of those involved in company fraud: 'The thirty- something generation are committing 30 per cent of the fraud,' he said. Given their comparative youth he was surprised that they had been given such access to company funds.

Looking at all frauds tracked by KPMG between 1987 and 1993, more than 30 per cent were committed by people aged 31-40. The bulk of the rest, 35 per cent, involved individuals aged 41-50. The youngest corporate fraudster was aged 16 and the oldest a man of 70.

KPMG compiles the fraud barometer every four months from press reports where criminal charges of more than pounds 100,000 have been brought. The firm says the majority of company frauds are committed by top managers.

The biggest fraud growth area consists of fraudsters working at one remove who persuade an authorised intermediary, who may be an entirely innocent lawyer or insurance broker, to allow them access to clients' funds.

'This worrying development allows the fraudster to operate outside the disciplines of the Financial Services Act,' said Ian Huntington, head of fraud investigation at KPMG.