The National Fraud Indicator published in March indicates annual losses of £73bn. It is clear that fraud is a paramount threat to both the public and private sectors. In particular:
Tax fraud accounts for £14bn of the estimated £20.3 bn losses from fraud in the public sector. In the budget George Osborne talked of a crackdown by the HMRC on tax evasion but query if this is possible in the face of significant funding and staff cuts.
Whilst proposals for the US style deferred prosecution agreements together with plea bargaining and civil disposals are tools available for the incoming SFO Director, David Green, there's a real risk that the new director will be hampered in his efforts to deter and detect fraud through insufficient funding. The imminent report into the agency's workings may reignite calls for the breakup of the SFO.
Recently the FSA has focussed on tackling criminal insider dealing, but its pending breakup and loss of senior staff will undoubtedly impact on its effectiveness in bringing prosecutions.
Insider enabled fraud is wide-ranging and insiders are identified as being responsible for some of the biggest frauds ever recorded. Much more could, and should, be done by businesses themselves to prevent, and identify, incidents of fraud. Business victims should also consider civil recovery methods as an efficient, controlled and often speedier route to resolving wrongdoing.