Scottish fraud hits record level

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Fraud in Scotland has rocketed to its highest level in 20 years of official research, say finance experts.

Figures from accountancy firm KPMG reveal about £50m worth of fraud was committed last year - almost three times the 2005 total.

The level has been boosted by major cases, such as that of the Edinburgh banker convicted of a £21m loans scam in June, researchers have reported.

They claim the number of frauds carried out by criminal gangs is also worrying.

Ken Milliken, head of KPMG Scotland's forensic team, said: "They have clearly been stepping up their efforts in the last year, with ID theft, card scams, bank insider frauds, money laundering and cigarette and VAT frauds represented within our figures.

The figures produce a picture of a country where fraud is becoming worryingly deep-rooted Ken Milliken KPMG Scotland

"Despite considerable government efforts to make it harder for such gangs to operate, there is still a long way to go.

"Added to that, with company managers committing nearly £350m of fraud last year, the figures produce a picture of a country where fraud is becoming worryingly deep-rooted."

Scottish courts dealt with 22 fraud cases worth £50.1m in 2006, compared with 15 worth £18m the previous year.

A total of £837m of fraud was committed across the UK last year, with a third of Britain's 277 cases carried out by professional criminals.

Company managers were responsible for 40% of fraud in terms of value.

Company fraud

Last year, Edinburgh bank manager Donald Mackenzie was jailed for embezzling £21m from the Royal Bank of Scotland.

Insurance broker, John Walker, admitted to selling customers of his Midlothian-based business £10m in bogus policies.

In Ayr, the boss of a knitwear company stole more than £250,000 from the firm over a four-year period to fund his gambling habit.

Mr Milliken claimed measures should be put in place to make operating fraud more difficult, as well as creating systems to make it easier to detect.

He added: "The government's recent fraud review, as well as the creation of the new Scottish Crime Campus, are important measures which will help in the fight against fraud.

"But you can't legislate against human nature, which is why fraud will always be around."