Reported fraud in Wales falls by over £40m, says new BDO report

The value of reported fraud in Wales fell by more than £40m last year despite there being nearly twice as many cases, according to accountancy and business advisory firm BDO LLP.

Despite the significant decrease in value, reported fraud is still higher in Wales than it is in Scotland (£10.1m) or Northern Ireland (£10m).

BDO’s 2014 Fraud Track report, which examined all reported fraud cases over £50,000, reveals that the cost of fraud in Wales fell from £55.5m in 2013 to £13.9m in 2014. Paradoxically, the total number of cases reported in Wales last year was 33; a rise from 18 in 2013.

Sat Plaha, forensic partner at BDO LLP, commented: “One of the reasons we are seeing lower values despite the volume of cases increasing is due to a growing trend of high value complex fraud being dealt with outside the judicial system, and out of the public eye.  Companies are increasingly assessing the reputational cost of a public case to their business, with many preferring to deal with perpetrators through civil – not criminal – remedies.”

Some of the most significant cases in Wales included a car dealer from Tycroes involved in a £5m tax evasion fraud; a couple from Llangoedmor accused of a string of frauds across West Wales totalling £2.4m; and a qualified solicitor and ex coroner from Carmarthenshire who was jailed for five years after stealing £1m in life savings from a former client.

The top three industries most susceptible to fraudulent activity in Wales were Public Administration (£5.4m), Finance and Insurance (£4.4m) and Non Corporate (individuals) (£2.5m).

The top three types of fraud by percentage in Wales were tax fraud (37%), mortgage fraud (29%) and third party (suppliers, customers etc) fraud (11%).

The total value of UK fraud in 2014 (£720m) was the lowest since Fraud Track started in 2003. However, the total number of reported cases actually rose to a record number (546), while the average value continued to fall from £3.3m (2012) to £2.0m (2013) and £1.3m in 2014.