Business fraud soars by amazing 1,900 pc

BUSINESS fraud in Yorkshire and the North-East has rocketed by a staggering 1,900 per cent over last year, depriving businesses and individuals of almost £100m.
Research by audit, accounting and business services firm BDO Stoy Hayward's revealed fraud rising to £95m in the last six months of 2009 compared to £5m for the same period in 2008.
In nearly three quarters of cases, greed and the need for a lavish lifestyle were stated as the reasons for the fraudsters committing the crimes.
The region's financial and insurance sector accounted for the highest proportion of all cases. In terms of money lost, the real estate sector was hardest hit.

Types of fraud vary. Procurement fraud is typically found in an organisation's purchasing operation with a fraudulent employee perhaps working with an outside accomplice to defraud the employer through bogus or inflated invoices for goods and services.

Large-scale frauds often taken place in relation to sizeable purchases of information technology or other fixed assets.

It can also include the corruption of management with purchasing authority by suppliers to encourage orders being placed with a particular business. The general public were also victims of fraudsters – to the tune of £3.5m with a number of people being swindled out of their life savings.

Simon Bevan, the Leeds-based head of BDO Stoy Hayward's national fraud team, said: "It comes as no surprise that fraud is rocketing but I predict we will see overall fraud in the UK hit £3 billion per annum. There is a whole wave of commercial lending fraud that is yet to be revealed by UK and overseas banks.

"It is frightening that the predicted level of £3 billion is only representative of those cases that reach the courts.

"In our experience many cases are never reported. The level of actual fraud is incalculable but is likely to be in the double digit billions."

Looking specifically at Yorkshire and the North-East, Mr Bevan said: "This region has a number of diverse industry sectors from financial powerhouses in Leeds to manufacturing plants in other major towns and cities. Past investment has seen growth in Yorkshire and the North-East and fraudsters will always be attracted to the smell of money."

He warned businesses to be on their guard.

"Recessions bring big problems for business leaders and fraudsters will do their best to take advantage of this.

"Firms should ensure that the issue of fraud is not forgotten – a large fraud can damage all the good work undertaken to survive the current economic climate."

Merseyside's credit-crunched businesses warned: Don't play with fire

Merseyside police and fire chiefs are uniting in a bid to prevent arson-related insurance fraud and warn credit-crunched business people that it is NOT a way out trouble.

Merseyside Police Chief Constable Bernard Hogan-Howe and Merseyside Fire and Rescue Service Acting Chief Officer Michael Hagen are launching a specialist team to tackle arsons on commercial properties where the intention is to profit from false insurance claims.

The Flare team is one of the first of its kind in the country and is being run by dedicated officers from both services.

It has been set up to investigate and prevent arson-related insurance fraud in the light of the credit crunch and harder economic times.

Flare will investigate arsons at commercial properties where it is believed that suspects have purposefully set fire to their business to gain financially through fraudulent insurance claims.

The team will work closely with Merseyside businesses and the insurance sector to investigate and prevent this type of crime.

Flare will also work closely with neighbourhood police, the Force's anti-social behaviour Task Force and investigating officers from the fire service to achieve thorough and efficient investigations.

Mr Hogan-Howe said: "I understand that the economic downturn is having an adverse effect on many businesses but arson with the intent of gaining through false insurance claims is not a way out.

"By committing such a reckless act not only will you lose your business, but you could destroy your life and the lives of others.

"We are determined to ensure that people involved in this type of crime realise that they are 'playing with fire' and will be arrested and put before the courts.

"Our officers will investigate in great detail any arson where it is believed to be fraud related and you will be prosecuted."

Merseyside Fire and Rescue Service Acting Chief Officer Michael Hagen said: “We know that arson-related fraud often increases in times of recession which adds to the risk to our communities and firefighters as well as costing jobs.

"As a result of our close working relationship with the police and with the co-operation of the business community and insurance industry, we intend to deter anyone from committing arson fraud and vigorously pursue anyone suspected of such an act.”

KGM appoints fraud manager

KGM Motor Insurance is upping the fight against spurious insurance claims with the appointment of a fraud manager.

David Wells’ role at the specialist motor insurer involves both strategic and operational aspects, developing and overseeing “rigorous fraud and financial crime management processes” across the business.

Mr Wells is moving from Highway Insurance, where he has spent the past six years as special projects manager for fraud, with a particular remit to target organised fraud.

KGM’s Active Underwriter, Colin Hart, comments: “This is a key appointment for us, we are very pleased to have David on-board. He has exactly the skills and experience we are looking for in this role.”

Last month, the Insurance Fraud Bureau reported that insurers are winning the battle against “crash for cash” fraudsters.

The Bureau has been working jointly with Police forces across the UK to disrupt the actions of criminal gangs involved; it currently has 25 active joint Police operations spread across 13 Police forces.

Particular areas showing improvement include Luton, East London, Harrow and Walsall.

Other areas to have seen “crash for cash” levels stabilise include Birmingham, Uxbridge and London North-West.

The Bureau estimates that fraudulent insurance claims add approximately £40 to every annual premium paid by honest policy holders.

Policewoman made threats to former lover, court told

A LESBIAN policewoman allegedly waged a year-long campaign of harassment against her former lover and colleague.

Diane Reeves-Emery, 38, allegedly targeted her ex-partner, Charlotte Eccles, 23, with scores of abusive texts – and threatening to stab her.

The Derbyshire police officers are on trial for allegedly cheating an insurance firm after crashing their Renault Clio during a lovers' tiff.

But the scam only emerged two years later when the couple split and Reeves-Emery was accused of carrying out the hate campaign.

Stafford Crown Court heard Eccles was being interviewed by police about the harassment allegations when she revealed the alleged insurance fraud.

Later, interviewed under caution, she told how she began her relationship with Reeves-Emery while working as a special constable in Swadlincote.

Eccles said they met on New Year's Eve 2005. Within three months Eccles had split up with her boyfriend and the two women were living together.

Eccles claimed that after only a few weeks she realised Reeves-Emery had "psychological problems" and was taking anti-depressants and drinking "excessive" alcohol.

Eccles told police: "She would tell me to leave and try to push me out of the door. When we were in bed together she would push me out.

"I loved her to pieces. But she would change from somebody I fell in love with to somebody who was completely different and aggressive.

"It was my first gay relationship, it was new, and I had left everything behind."

Steven Redmond, prosecuting, said the crash happened on April 25, 2006, when the pair went for a drive to discuss their relationship problems.

The smash caused £6,000 damage to their Renault Clio.

It was Reeves-Emery, of Alexandra Road, Burton, who called the insurance company to report the accident and take responsibility for the crash.

The firm sent out a claim form and the car was repaired, but at the lower excess rate of £250 for which she qualified.

But the prosecution claims the pair lied to pay only the reduced excess, and that Eccles was in fact at the wheel of the car at the time of the crash.

Months after the incident the couple married in a civil ceremony, but Eccles said she felt threatened by the "control" her lover exercised over her.

Reeves-Emery's campaign of harassment allegedly began following their split and intensified after Eccles started a new relationship.

Eccles, of Blueberry Way, Woodville, told police: "I put CCTV signs up. My letterbox was sealed, I was scared she might try to set my house on fire."

Asked about the alleged fraud, Eccles told police she was "under the influence" of Reeves-Emery and felt she had to go along with it.

She added that her ex-partner said their careers would be destroyed if the scam emerged.

"I knew what she was like when she didn't get her own way. I was scared to tell somebody because she was violent towards me," she told police.

When Reeves-Emery was later interviewed about the claims she read out a prepared statement, accusing her ex-lover of "making mischief".

The pair both deny a charge of obtaining a financial advantage by deception.

Reeves-Emery faces another deception charge after allegedly giving false information to a second insurance firm within days of the smash.

The case continues.