Fraud said soaring and set to worsen

|PIC1|Fraud in the UK jumped 50 percent in the first half of the year, compared with the previous six months, and is likely to worsen as the effects of the credit crunch spread throughout the economy, a report said.

As many as 128 fraud cases went to courts in the first half of the year, involving 630 million pounds - with banks suffering an all-time high of over 350 million pounds - said a report by accountancy firm KPMG, published on Tuesday.

Fraud against banks totalled more in six months than in any whole year in the 20 year history of KPMG's Fraud Barometer, the accountancy firm said.

"Fraud remains extremely prevalent in the UK with professional gangs accounting for over two-thirds by value, ranging from investment stings to trading scams, card fraud and money laundering," said Hitesh Patel, partner at KPMG Forensic unit.

The cases included forty people who were charged in a 'cash-for-crash' scam in which they staged or forced road traffic accidents in order to make insurance claims, KPMG said.

The most bizarre case to come to court in the first half of the year involved someone who allegedly conned an investor into believing that he was acting on behalf of the Barclay brothers to sell the Ritz hotel in London for 250 million pounds - less than a reported market price of about 600 million. The investor paid a deposit of 1 million, quickly spent by the fraudster.

"The ingenuity and audacity of fraudsters often simply catches people off their guard," Patel said in the report. "That is why companies and individuals need to be fully alert to what is, in these challenging economic conditions, an ever-present and growing threat."