Fraud in Scotland skyrocketed by 194% during 2022, according research by KPMG.

Specifically, the number of alleged fraud cases over £100,000 being heard in Scottish courts rose significantly last year, with their total value amassing to £1.12bn.

This is an increase of 151% from 2021, which only saw fraud cases reach £447.m in 2021.

KPMG’s bi-annual Fraud Barometer found a total of 24 cases totalling £1.7m reached Scottish courts in 2022, tripling amount the 16 cases worth £5.9 on 2021, with a year to year increase of 194%.

One of the cases involved a 24-year-old Ayrshire man scamming £7 million from a top US bitcoin broker.

Commercial businesses were the victim of five cases of fraud in Scotland with a combined value of £1.3m. Four of these cases were instances of embezzelment.

By both volume and value, however, the general public were the victim of the most cases with 11 cases in 2022 compared to three in 2021. The total value of fraud against the general public also increased to £10.3m, up from £1m in 2021.

Annette Barker, Head of KPMG Forensic in the UK said:  “The dramatic increase of fraud cases coming to light in Scotland is worrying, particularly with many cases involving rogue employees abusing their positions of trust to steal money from their employers, clients and other partners.”

Sandra Aitkenhead, Senior Manager, Forensic at KPMG in Scotland, added: “Businesses must do all they can to maintain adequate controls to prevent serious fraud from being committed. Without the right safeguards in place, businesses across Scotland will unfortunately continue to be victims of crime and incur the reputational and financial damage which comes with it.”

Figures from KPMG UK’s Fraud Barometer found that despite the increase in total value of reported fraud cases heard in 2022, the volume of cases fell by 27%. A total of 219 alleged fraud cases reached the courts in 2022, compared to 298 in 2021.

While volume of alleged fraud £100,000 or above decreased and total value increased, the value was largely driven by five cases with a value of £50m or above which were heard in UK courts in 2022. These cases amounted to a total value of £648m, more than half the total value of all the fraud cases heard. This is a stark contrast to 2021 which saw no reported cases over the value of £50m.

Fraud cases against financial institutions halved in 2022, with only 16 cases being heard compared to 32 in 2021. Despite this, the value of fraud committed against financial institutions in 2022 increased dramatically by 2204% to £609.2m.

Reflecting on the data, Roy Waligora, added:“The Fraud Barometer only looks at reported cases heard with a value of £100k or above in UK courts, so the likelihood is that the general public have been the victims of many more frauds. As the cost-of-living hits households, we are likely to see a combination of two things happen.

“Firstly, we are likely to see opportunist fraudsters target the public through specific scams relating to the cost of living, such as a recent energy rebate scam. Secondly, there is likely to be an increase in frauds committed by more amateur criminals as people face financial difficulties. The public must stay vigilant, with the help of businesses, government and the police.”

Investment fraud also saw a large increase in value despite only six more cases being heard in 2022 than in 2021. In 2022 19 cases were heard in UK courts amounting to a total value of £181.8m, compared to 13 cases in 2021 which had a combined value of £12.5m, a 1358% increase in value

Further data revealed in the Barometer reveal that cases of advanced fee fraud, such as romance scams and services paid for but not delivered, increased from nine cases to 19 cases from 2021 to 2022.

In addition, professional criminals were the main perpetators of fraud in 2022, responsible for 92 cases of fraud worth a total of $725.2m, an increase in value of 130% since last year.

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Interestingly, management was the second largest group of perpetrators by volume, accounting for just over a quarter of cases in 2022.

Roy Waligora said: “While these cases may seem alarming, it is positive that these cases are making it to UK courts as these alleged crimes are exposed. However, businesses and institutions themselves need to be doing more to stop money laundering activities which are achieving such high values.

“As for investment fraud, investors and potential investors need to be wary of any investment opportunities. They should ensure they are doing their due diligence first by seeking advice and checking the FCA register.”

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