Exclusive: Big increase in fraud as gangs target 'pot of gold' Yorkshire

ORGANISED fraud cases in Yorkshire have more than doubled in two years as crime gangs steal from recession-hit businesses to bankroll illicit enterprises like drug dealing and people trafficking.

Detectives at the region's largest police force have been called to investigate frauds with a total value of 68m in the first six months of 2010, compared with a 33m total for the whole of 2009.

West Yorkshire Police, which has Britain's largest economic crime unit outside London, has seen the number of cases soar by 111 per cent in two years, from 142 in 2007 to 300 in 2009.

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In the six months to July 1 this year, the unit carried out 163 organised fraud investigations – more than six a week.

Credit card fraud is also on the rise in West Yorkshire, growing from 848 serious cases in 2008 to 1,046 in 2009.

Experts warn small and medium-sized businesses are particularly vulnerable as they usually have fewer anti-fraud controls than larger firms and are more likely to take risks to remain profitable in difficult trading conditions.

The head of the economic crime unit, Det Ch Insp Steve Taylor, said: "West Yorkshire is being targeted not just by local criminals but national and international criminals.

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"About 89,000 people in West Yorkshire are employed in banking and finance, so we are not too far behind the City of London in terms of numbers. That makes us prime targets for organised criminals to attack; the region is a pot of gold, a piggy bank, they can aim for.

"We know from the people we have arrested the stolen money gets put into organised crime to fund firearms, drugs and people trafficking."

Det Ch Insp Taylor said complaints by private companies had risen by 150 per cent in two years, while frauds in the banking sector had also risen significantly.

Detectives have been asked to look into a growing number of "long firm" frauds, by which seemingly legitimate businesses are created to steal from suppliers, and "advanced fee" frauds where companies take money from customers but fail to provide goods.

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"We are concerned about small and medium-sized businesses because they have been targeted particularly and they must start protecting themselves," Det Ch Insp Taylor said.

"With the downturn in the markets there has been an increase in cases of fraud, as you would expect, but we want to alert private industry to the fact that people realise companies are taking greater risks to get trade."

Gary Blinkhorn, research and development manager of South Yorkshire Police's economic crime unit, which has seen a marked increase in mortgage scams, said estimates put the nationwide cost of fraud at 30bn a year.

Investigators at business advisory firm PricewaterhouseCoopers have seen a rise in Yorkshire cases involving small and medium-sized enterprises (SMEs).

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Fran Marwood, head of the firm's Northern fraud and investigations team, said it been called to look into about 12 incidents in the past year, including one in which a member of staff created purchase orders to make payments to themselves.

He said personal circumstances, such as a reduction in family income, could lead people to commit fraud but another factor was that SME employees often had more opportunity to steal than staff at larger firms.

"In an SME people get more responsibility, typically, and there might be a situation where there is additional trust in people and limited oversight," Mr Marwood added. "That allows them to manipulate records and extract monies from the businesses through fraudulent cheques or manipulated electronic payments."

Cath Lee, of the Federation of Small Businesses, said small firms were becoming increasingly susceptible and the results could be "absolutely devastating" – not only in terms of the financial loss but also in the time taken to sort out the matter.