Value of fraud cases heard in Welsh courts double

The value of fraud cases heard in the Welsh courts in 2021 reached almost £7.9m, nearly double the value of £4.1m in 2020, according to KPMG UK’s latest Fraud Barometer. This substantial increase is largely attributable to a general rise in the value of cases heard in the region’s courts: in 2021 the three highest value cases had a combined value of £5.5m, whereas in 2020 the three highest value cases totalled £2.5m. There was also a 60 per cent increase in the number of alleged fraud cases heard in the region’s courts, from ten in 2020 to 16 in 2021.

As observed in 2020, professional criminals were, by number of cases and value, the main group of perpetrators in 2021, allegedly committing seven cases of fraud worth £4.4m. There was also a marked increase in the number of alleged frauds committed by individuals in management roles, from one case with an alleged value of £500k in 2020 to four cases in 2021 totalling £2.7m.

The Fraud Barometer data shows that government organisations were, by number of cases and value, the main victims of alleged fraud in 2021, suffering an estimated £5.3m in losses across six cases. This is an increase in both the number and value of cases compared to 2020 when government organisations were the victim in three cases totalling £970k.

Commenting on the figures, Damian Byrne, Forensic Lead at KPMG in Wales said:

“The increase in the number and value of alleged fraud cases heard in the Welsh courts in 2021 compared to 2020 reflects the high fraud risk that is faced by organisations, individuals and businesses. However, it is important to remember that the number and value of alleged fraud cases in 2020 was notably lower than expected due, at least in part, to the significant disruption to the region’s courts caused by the COVID-19 pandemic.

“Despite the efforts of those working within the legal system there has been an increase in the backlog of unheard cases since the start of the pandemic and it may take a number of years for this to be cleared. Therefore, we may see high numbers of fraud cases being heard in the region’s courts into 2022 and beyond.”

Cases to reach the region’s courts over the six months include: 

• A Welsh businessman who stole nearly £1.9m of public money has been jailed for more than five years after committing VAT fraud. The individual is understood to have submitted fraudulent VAT returns to HM Revenue and Customs (‘HMRC’) to reclaim VAT on machinery that was never purchased. The funds were used to purchase four properties, including three in Spain. He was caught after HMRC officers noticed that the profits reported in his company’s accounts did not match the information in the falsified VAT returns.
• Two men have been convicted of running an illegal £2.6m waste racket involving the burial of toxic rubbish next to a Grade II-listed mansion, which was used as an illegal dumping ground before being subsequently sold by one of men. The pair attempted to hide their secret activity by using large excavators to bury the waste, but police were tipped off by people in the local area who noticed the large machinery.
• A business manager of a family firm from which he stole almost £200k has been found guilty of “systematically, deliberately and cynically” defrauding his employer. The individual is understood to have abused his position as a trusted member of staff by ordering domestic heating boilers from a supplier, which he sold on privately after they were delivered to his home and used his knowledge of the company’s systems to conceal his activities.

 The number of alleged fraud cases heard in UK courts in 2021 went up by 66 per cent compared to the same time in 2020. Despite another lengthy COVID-19 lockdown at the start of 2021, UK courts appear to have got back on their feet and made headway with the backlog of cases that built up because of initial COVID-19 measures.

Figures from KPMG UK’s Fraud Barometer released today, found 298 alleged fraud cases were heard during 2021 (up from 180 in 2020). Yet the opposite trend was seen in terms of fraud value: the Fraud Barometer figures, which records alleged fraud cases with a value of £100k and above, saw the total value of fraud reaching UK courts in 2021 fall significantly from £724m in 2020 to £444.7m in 2021.

Whilst cases in UK courts provide an indicator of fraud activity, these cases are small in the context of fraud crime reported to Action Fraud. Between 2020 and 2021 there were 875,622 reports made to Action Fraud with a reported loss value of £2.35bn, pointing out the stark reality that relatively few cases are brought to court.