The number of fraud cases heard in UK Crown Courts in the first half of the year has seen a significant increase of 16% compared to the same period in 2023, according to the latest report from KPMG. Money laundering emerged as the most prevalent type of fraud by value, with nine cases amounting to over £128 million being heard so far this year.
The mid-year Fraud Barometer report by KPMG highlighted a total of 122 alleged fraud cases with a value exceeding £100,000 during this period, showing a rise from 105 cases in the first half of 2023. The report also pointed out that four-fifths of reported fraud cases are now cyber-enabled, indicating a growing trend towards digital criminal activities.
Money laundering, in particular, has a strong digital component, with illicit funds often originating from cybercrimes like online scams. These funds are then laundered through various means such as blockchain transactions, securities trading, shell companies, or offshore trusts before being reinvested in legitimate purchases, many of which are conducted online. In 2023 alone, an estimated $22 billion worth of cryptocurrency was laundered, as reported by Chainalysis.
KPMG partner Ray Waligora stated, “Money laundering remains a significant challenge in the UK due to the intricate and sophisticated financial systems that can be exploited for illicit purposes.” He also mentioned that the recent requirement for overseas entities to be registered at Companies House may lead to an increase in such cases being brought to court in the near future.
According to KPMG, the government has been the primary victim of fraud cases in the current year, with 26 cases heard in court amounting to a total value of £193 million. This marks a 30% increase compared to the same period in 2023. A parliamentary report from September 2023 criticized the previous Conservative government for being slow to address errors and fraud in Covid grant schemes, with only £20.9 million recovered out of an estimated £1.1 billion in losses by May 2023.
In response to these challenges, the new Labour government has pledged to establish a Covid corruption commissioner to recover billions of pounds lost to fraud and flawed contracts, aiming to safeguard taxpayer money and combat financial crimes effectively.