Fraud! What is it good for? Absolutely nothing, unless you get away with it. But as Sam Metcalf finds out, with corporate fraud now being uncovered at every level of business, there's less chance of getting away with it.
Over £31bn worth of fraud came to court in 2007 - that's the highest since 1995 and the second highest in 20 years. With fears that the credit crunch will lead to a protracted economic slowdown, personal and corporate pressures may make the situation worse in 2008.
Simon Dwyer, head of fraud and financial investigations at KPMG Forensic in Birmingham, says: "Levels of fraud continue to remain disturbingly high. Organised gangs have been more active than ever, with a proliferation in VAT frauds, ID thefts and other forms of white collar crime, to the tune of a huge £3889m or nearly 90 percent of fraud by value across the UK.
"The sophistication of organised fraud in the UK is certainly extremely concerning. More cases have come to court in recent years than previously, but I fear this is the tip of the iceberg. 2007 saw a respite in prosecutions for frauds against banks and other corporates, but now that the economy looks set to slow, we could see more people attempting fraud to ease financial burdens."
Locally, too, fraud is certainly on the rise. Lynn Bleakley, partner at law firm Cartwright King, says: "The total value of frauds has increased 20 per cent during the last year to top £31bn."
Organised criminals accounted for nearly 90 per cent of fraud by value in 2007, with government agencies the primary target. They took £3833m - an enormous jump from 2006, when professional gangs accounted for £3221m of fraud. A huge portion of this was on carousel fraud on items like mobile phones. Bleakley's firm is acting in one carousel case involving over £3500m and another over £3300m.
However, just because professional gangs are targeting the government with such ferocity, does not mean that businesses have escaped their attention.
According to Lisa Richards, partner at Smith Cooper and an expert in company fraud, it happens to smaller businesses more frequently than we imagine - with devastating consequences.
She says: "Company fraud isn't exclusive to larger companies - it's an issue for all businesses and can affect everyone, from start-ups to companies turning over millions of pounds.
"It can be something as obvious as fiddling expenses to defrauding the company out of hundreds of thousands of pounds, as we saw in 2007 in the case of Ilkeston Co-op, which was forced to sell off its motor group with the loss of 200 jobs after being hit by a major fraud masterminded by a crooked accountant.
"In most cases it starts on a small scale and escalates over time when the culprits realise that they can get away with it. And after they've got away with it once, then the temptation to take more next time becomes greater, until they become used to the extra income and it becomes a regular occurrence."
Bleakley adds: "Credit scams continue to be a serious problem for smaller businesses.
"Any company finding its financial situation tight is going to be much more susceptible to going to the wall if it becomes the victim of a fraud."
But, despite the rising figures, the issue is still largely a taboo, says Jonathan Middup, who leads Ernst & Young's fraud investigation team.
He says: "The public doesn't understand what goes on when it hears about corporate fraud. You can't blame them as whenever something does happen, it's hushed-up. We need to talk about fraud in a more open way, so that people understand what's going on."
Despite the number of frauds uncovered in the Midlands rising, cases of convictions are actually dropping, according to new research from BDO Stoy Hayward.
Sat Plaha, forensics partner at the firm's Birmingham office says: "The gap between the number of frauds investigated and prosecutions in criminal courts is widening. Our fraud team took on up to three investigations a week in 2007, yet supposedly the amount of fraud is decreasing."
Contrary to common public perception, fraud is not a victimless crime, says Plaha.
He adds: "Those with drug and alcohol problems who commit frauds are being bashed by judges with tougher sentences. But criminals who plead that gambling or marital problems drove them to it, will get off lightly. Either way, the average sentence in 2007 of 2.8 years for committing a fraud allows fraudsters to laugh all the way to their offshore bank, as increasingly fraudsters and the proceeds of fraud cross international boundaries.
"When you balance the low chance of being discovered and prosecuted against the millions many white collar fraudsters make, it's not hard to see why fraud is increasing, and why more people are getting away with it."