Fraudsters make iTunes top of the crime pops

Click to follow
The Independent Online

The public sector now suffers more from fraud than financial services, one of the nation's leading firms of accountants says – while iTunes is proving a hit with white-collar criminals.

The latest KPMG Fraud Barometer shows that 42.5 per cent of all fraud cases were levelled at the public purse, totalling £593m. This was an increase of nearly 20 per cent, from 59 instances in 2009 to 70 in 2010.

One of the largest cases was worth £103m, in which a 48-year-old man claimed a flood of fraudulent bids for tax breaks on research into green technologies.

In the private sector, the biggest case over the past 12 months was worth £200m – in which a director of a City firm transferred large sums of taxpayer money out of the country. He then went on to set up a currency exchange business to help more than 100 criminal clients clean up the proceeds of their fraud.

However, external professional criminals remain the biggest threat to the UK, being the largest group of perpetrators of fraud, recording a total of £709m in 2010 (51 per cent) compared to £718 million in 2009.

Determined fraudsters are also keen on exploiting the latest technological trends, as one case in the Midlands demonstrated, where a DJ was accused of plotting a credit card scam on the iTunes website. Both the man and his 10 accomplices targeted the Apple and Amazon sites with 20 songs which they then sold through the respective websites. It is thought that they then stole approximately 1,500 credit cards to buy the songs, and then claimed back just under £469,000 in royalties.

Hitesh Patel, KPMG Forensic partner, commented: "The online universe has opened up a whole new world for innovative fraudsters. While credit card and data theft remain common tools from which they are able to profit, the need for ever-more effective techniques to combat fraud grow greater by the day. Unfortunately, anti-fraud measures do not always keep pace with professional criminal activity."

Mortgage fraud, which was rife in the first half of 2010, plummeted from July to December, dropping from 21 to 13 cases (£96m to £12.4m), suggesting the bigger, more organised mortgage fraud is being tackled head-on by financial institutions.

The Government is making £900m available over the spending review period to raise additional revenues from tax dodgers.