INDUSTRY FOCUS
Scottish fraud cases triple
The value of major fraud cases going through the Scottish courts more than tripled in 2019, according to the latest KPMG Fraud Barometer.
The latest data, which analyses fraud worth more than £100,000, showed that cases valued at more than £15.6 million were heard in courtrooms across the country, up from cases worth more than £4.5 million in 2018.
One case involved Alistair Greig, 65, who offered investors (mainly in the Aberdeen area) through his business, Midas Financial Solutions (Scotland) Limited, high-interest accounts with the Royal Bank of Scotland (which did not exist), promising them that the returns on their capital and interest payments were guaranteed.
He is alleged to have obtained a total of around £12.98 million from investors under false pretences and a significant proportion of this money was transferred out of the UK.
Another case involved Paul Galbraith, who stole more than £500,000 from his employer, Oil States Industries, in West Lothian.
The project manager was jailed after it emerged he had submitted invoices from a non-existent company for work that hadn’t been done enabling him to spend thousands of pounds at a private members club in Glasgow, on designer clothes, holidays to Dubai and Australia and on a property. He made the fraudulent payments into his mother’s bank account.
A further case involved credit union boss Anne Costello, who was jailed for two years after stealing more than £180,000 by forging friends’ signatures.
The 67-year-old used her senior position at the Cumbernauld South Credit Union to make false applications for loans over an 18 year period, after she personally fell into debt.
Annette Barker, KPMG’s head of Forensic Regions, said: “There has been a significant increase in the value of fraud cases in the Scottish Courts this year, which correlates with the overall UK picture, where fraud is rising across the board.
“What remains a concern is the number of fraud cases involving personal connections – from employees to advisors and family members.
“Large frauds are often allowed to occur because people accept what they are told at face value by people they trust.
“You wouldn’t give someone access to your bank account without checking the balance regularly rather than asking them is my bank balance okay.”
UK-wide, sophisticated cyber-crime combined with traditional 'old school' frauds have pushed the value of alleged fraud cases hitting UK courts in 2019 to more than £1 billion.
The total of £1.1 billion in alleged frauds is the sixth largest amount recorded in the report's 33 year history.
The figures also show that alleged insider frauds against businesses more than doubled in value compared to 2018.
More than £192 million of alleged fraud against businesses involving traditional embezzlement against employers, manipulating accounts or abuse of position appeared in UK Courts in 2019 compared to £109 million in 2018.
One case included a European-wide scam that involved warehouses in the UK hiding goods as part of a £2 million fraud.
The scam involved supposedly genuine UK businesses ordering goods from 39 Europe-based companies which were collected in the UK but never paid for.
When police raided the site they found 281 pallets containing wine, pasta, flat screen TVs, pressure washers and bathroom fittings. A 29 year old from Kent was jailed for five years for playing a leading role in the scam.
