Fraud is soaring during the recession and must be made a police priority, the senior officer heading the national drive against economic crime said.
The number of reported frauds rose by 64 per cent during the past financial year, with people from all walks of life falling victim.
Mike Bowron, Commissioner of City of London Police, said that law enforcement agencies could no longer ignore so-called “white-collar crime”. Mr Bowron told The Times: “The notion is that it’s a gentleman’s crime, that the chances of getting caught are slim and, if you are caught, you’ll get two weeks in Ford open prison. Those days are gone. It’s not white-collar crime and I won’t have that phrase mentioned in my force. It is organised crime.
“It is very lucrative crime. There are some very bright individuals who have chosen, for whatever reason, to turn to crime. They are very intelligent, very driven individuals.
“For example, with the downturn in the property market, we are seeing a lot of mortgage fraud, which has been perpetrated by deliberate overvaluing of new developments. Those frauds require conspiracies of bent lawyers, estate agents and developers all working together.
“These are crooks who are not motivated by a heroin habit, or social deprivation and it gives me — as a cop — great satisfaction to catch them.”
The City force has appointed 50 new fraud specialists who, in the space of a year, have begun to investigate new frauds valued at £1 billion and gathered intelligence on cases with potential losses of £500 million.
The value of reported frauds was put at £14 billion in 2005 by independent academics, who said that the amount of total losses — when unreported cases were taken into account — was likely to be closer to £20 billion. The credit crunch has exposed more suspect financial activity, such as the estimated losses of £44 billion by investors in GFX Capital, a foreign exchange dealing business whose head is under police investigation.
Mr Bowron said: “People ask if this is due to the onset of recession, but we don’t think it is. The recession is identifying fraud that already existed in many cases, but it may also be causing some fraudsters to move from one type of activity to another. The pressure on us now is to try and read economic cycles, to predict the next type of fraud.”
The creation of a National Fraud Intelligence Bureau — in which police, banks and insurance companies would work together — is, City police believe, the logical next step to strengthen fraud investigation nationally. Its aim would be to create a map of fraudulent activity and determine how fraudsters in different parts of the country might link up with each other.
“We’re not going to catch every fraudster, but by logging every reported fraud we can work out where things are happening and design means to stop them,” Mr Bowron said.
Where cases can be investigated, City has a 200-strong squad of fraud specialists who can advise other forces or take on inquiries anywhere in the country.
“If we identify a network of criminals working along the M62 corridor, running staged accidents for insurance fraud, then Greater Manchester Police are likely to say ‘we’ve got a gun crime issue, we’ve got a gang issue, we’ll get round to it when we can’. I’m not criticising other chiefs — it’s about priorities,” Mr Bowron said.
“My priority in the City of London isn’t gun crime or hoodies. I don’t have those problems. We can lead on fraud. We can give advice, provide technical expertise or, if a case is really complex, take it on.”
But the most vital forward step in fighting fraud, the City commissioner argues, is educating the public. He praises the Serious Fraud Office’s role in advising the current storyline in The Archers and would like to get a character in Coronation Street ripped off.
“Fraud has not been a priority for either the police or the public, not because nobody understands it but because nobody walks down the street in fear of being embezzled. But the fact is that it is the crime that we are most likely to fall victim to.”
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