Many more British companies are likely to have an unhappy start to the new year, with fraudsters expected to have been busier than ever over the Christmas break.
The accountants BDO Stoy Hayward Bank warned yesterday that employee fraud is spiralling and the long festive break is the favourite time for crooked workers to undertake their often time-consuming crimes and cover their tracks.
Its research showed a dramatic increase in employee fraud since 2003. It soared to £78m in 2005, an increase of 81 per cent on the previous year.
That figured is based only on cases that companies reported. The real extent of the crime is likely to be much to higher still, as much fraud goes unrecorded and even more goes undiscovered, BDO said.
Fraud committed by employees is rising as a proportion of total fraud too. It accounted for a fifth of all fraud in 2005, compared with only 12 per cent in 2004 and 13 per cent in 2003.
Andrew Durant, head of the fraud investigation and recovery services team at BDO, said: "I know from personal experience of investigating hundreds of frauds that Christmas is a favourite time for fraudsters to be busy.
"Management's eyes are off the ball in the run-up to Christmas and the long holiday allows the fraudster to be in the office for extended periods with few people around, so they can work undisturbed.
"Often committing a fraud is a time-consuming business because of all the extra documentation that needs to be generated to cover up the crime."
An employee fraudster is typically a long-serving and established member of staff, though there is an emerging trend for professional criminals to use temporary staff to gain access to sensitive data.
Types of fraud by workers range from the abuse of pre-signed blank cheques, letter heads and authorisation forms given out to cover the holiday period, to changes made to computer systems.
BDO's FraudTrack research is based on all reported cases of more than £50,000 from sources including the Serious Fraud Office, the Department of Trade and Industry, the Metropolitan Police and the press. The figures cover the period from 1 January to 31 October 2005 and represent 182 cases with a total value of £399m.