The number of cases jumped from just three in the first half of 2017 to 16 during the first six months of 2018. The total value of the cases also skyrocketed from £700,000 to £10.2m.

 

KPMG released the figures as part of its Fraud Barometer, which found that professional criminals were defendants in 50% of the cases.

 

The alleged criminals targeted businesses and banks and have been charged with a range of crimes including embezzlement, tax fraud, and expense and payroll fraud.

 

The biggest case was valued at £3.6m, and with five men in jail for smuggling over  12m cigarettes into the North East. 

 

Three senior members of staff at Team Wearside in Sunderland were also jailed for stealing more than £450,000. The fraud contributed to the closure of Team Wearside and the loss of 23 jobs.

 

Commenting on the high figures, James Maycock, forensic director at KPMG said: “On the back of a year with the highest level of alleged fraud in three decades, 2018 appears to be continuing the trend and we can expect this year to be another 12 months of large numbers of fraud cases coming to court. 

 

“There are certain types of fraud that have dominated the fraud landscape over the past three decades, including the rise of the professionally organised gang who run criminal operations very much like a business. The main victims have been governments through attacks on the tax system, banks through loans and mortgages obtained via deception, and investors enticed by the promise of tantalising returns.

 

“Interwoven with the story is the increasing use of technology and cross-border activity that has impacted on fraud just as it has on our everyday lives. Businesses, public sector and consumers need to continue to be vigilant and on guard to fraud threats in these ever-changing environments.”

 

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Switching from a manual time and attendance management system to an automated one will save you money and time, but perhaps most importantly it will reduce the chances of several types of fraud.

 

This is when employees using a paper timesheet to self-report their hours will deliberately enter incorrect information in order to alter their pay cheque. For example, overtime that they didn’t do, or falsifying shifts on premium pay days like weekends and Bank Holidays. (Less overtly harmful forms include taking a much longer lunch break than they recorded.)

 

If their manager doesn’t work alongside them (e.g. construction, some factory work sales or cleaning) then it can be very difficult to spot these fraudulent entries. 

 

Changing to an automated system means that the workers have to clock in and out every day in order to be paid correctly. Shift patterns can be entered into the software, so that it is obvious if a worker has skipped work, or is continually staying longer than they should be with no visible work output. 

 

Clocking in and out with swipe cards or even proximity cards is not entirely free of fraudulent opportunities (since they can be swapped amongst workers), so next we will address …

 

 

This has many different names, but is the phenomenon whereby staff members clock in or out on behalf of other people. For example, if their friend is stuck in traffic, or needs to go home early to deal with an issue. (Obviously, both of those scenarios would be better dealt with by getting hold of the manager.) While it is often done on that casual basis, there are horror stories of entire shifts messing around with their clockings and causing payroll havoc. 

 

Buddy punching can only happen when the clocking-in system is not directly connected to the individual – some kind of smart card, for example, or an old-fashioned punching system. Biometrics eliminate the possibility of this fraud, since not even identical twins have exactly the same fingerprints! 

 

 

Finally, there is payroll fraud. This can take many forms, but we will focus on one common payroll process in a manual system: needing to transfer every single timesheet onto the computer (often Excel) in order to create a database from which they can start to run the payroll. 

 

Not only is this open to natural human error (in misreading illegible entries, or in entering them with a typo), but it is also a prime spot for a criminally-minded employee to deliberately alter the data. This could be for themselves, or they could be accepting money to alter it for others. 

 

Using an automated system from Time and Attendance North East removes this step completely. Our clocking data can be exported straight from the system in a format suitable for all of the major payroll systems. No more laborious transferring necessary!