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Property fuels record fraud levels

A buy-to-let scam helped fuel the record level of fraud uncovered in the first half of 2009.

The North East-based scam extorted 2,000 investors out of £80m for investment properties, which turned out to be nothing more than derelict shells, according to the statistics from accountancy firm KPMG out today. This is in addition to the attempted fraudulent sale of the Ritz hotel in London for £200m.

KPMG’s Fraud Barometer reveals that over 160 cases of serious fraud across all sectors, worth a combined £636m, was dealt with in UK courts during the six months to June 30, with consequential charges in excess of £100,000. 

This also includes 18 cases of mortgage fraud worth a combined value of £24m, which  compares to 25 cases worth £36m in the whole of 2008. The firm expects to see this level increase throughout the recession.

Hitesh Patel of KPMG Forensic, the team behind the barometer, says: “These figures are bad, but the worst is yet to come. It will be a number of years before the impact of the recession fully feeds through into the fraud statistics.

“Hard times mean more people driven to fraud by personal pressures, and more investors willing to believe in cooked up investment schemes. Companies too remain vulnerable to the threat within - their staff - as evidenced by the £150m of fraud that managers have been tried for in the last six months alone.”

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