Super-frauds help set record value for NZ cases, says KPMG

Friday 13th April 2012

Super-frauds committed against financial institutions have resulted in the largest values ever attributed to fraud cases in New Zealand, even as the number of cases declines, according to KPMG’s fraud barometer.

The value of large fraud cases rose by about $79 million to $279 million in the second half of 2011. There were 24 cases, down from 29 in the previous period, but five of those were so-called super-frauds, defined as cases involving more than $3 million.

Three of the five super-fraud cases topped $100 million and were carried out against financial institutions. They involved falsifying financial information in order to obtain loan finance, while the other two related to the collapse of finance companies in which directors used investor funds for personal benefit.

“The focus of the financial sector and restoring the confidence of investors in our financial markets by the Serious Fraud Office and the Financial Markets Authority is reflected in the level of prosecutions in this sector,” said Stephen Bell, head of forensics at KPMG New Zealand. “This trend will continue into 2012 and 2013.”

The survey found the most common victims were government agencies and investors remained in cases relating to finance companies.

“We are now witnessing the results of investigations into failed finance companies reaching the court,” Bell said. “The significant amounts involved in these cases are making a significant impact on the results of the fraud barometer with ‘investors’ recorded as suffering the second highest aggregate amount of fraud.”

Taxpayers and employees remained the most common perpetrators of large fraud on six cases.

Males were the perpetrator in 71 percent of all cases, but only 63 percent in super-fraud cases.

(BusinessDesk)

BusinessDesk.co.nz

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