Employee Fraud Rises During the Pandemic

KPMG’s latest UK Fraud Barometer found employee fraud rose considerably from 2020 to 2021, due in part to the COVID-19 pandemic.

2020 saw a total of 44 acts of fraud committed by employees, but in 2021 there was an increase of 22, with a total of 66 employee fraud acts.

Where management was involved in committing the fraud, 2021 saw 66 cases, up from 44 in 2020.

Roy Waligora, the KPMG partner and head of UK investigations, stated, “Covid-19 has changed so many aspects of our working lives.

“As organisations have had to make changes to adapt to economic uncertainty and hybrid working, many employees may feel a mixture of reluctance and anxiety about being forced to perform their job in a certain way to comply with new measures.

“Economic uncertainty has been a great motivation for some employees to commit fraud.

“Those working from home may even think that they have a lower chance of being caught because they are out of sight of their employer and are willing to risk it.”

From 2020 to 2021, Action Fraud received 875,622 reports of fraud, which totalled a staggering loss of £2.35 billion, as reported by Money Marketing.

Here we will discuss the aspects of employee fraud, what actions class as employee fraud, whether employers are responsible for their employees’ actions, and the type of penalties individuals can face if found guilty of employee fraud.

What is employee fraud, and what actions class as employee fraud?

Where fraud is considered as ‘employee fraud’, it means the fraud is committed by an employee against the business or organisation. This type of fraud could include:

  • Payment fraud – this type of fraud is where an individual deceptively creates payments or diverts existing payments, such as changing payee details, creating false financial information, cashing in cheques, self-authorising payments to oneself and more
  • Procurement fraud – this type of fraud involves the purchasing of goods or services, but where the tender process was avoided to commit fraud, untruthful payment claims are made and bid rigging.
  • Travel and subsistence fraud – this type of fraud could be falsely claiming for journeys that were not made, forged signatures, untruthful client entertainment claims, and more.   
  • Personnel management – this type of fraud could account to abusing flexible working, misusing company equipment, employees calling in sick to work a different job, and more.
  • Exploiting assets and information – this type of fraud is where employees use company assets for unofficial purposes or provide information about the business to an individual or group outside the company
  • Receipt fraud – this type of fraud could account to stealing cash or cheques or amending the amount customers owe in return for incentives

Are employers liable for fraud committed by employees?

Where employee fraud has caused damages to a business, such as financially, the employee who committed the fraud will be usually be liable themselves. However,  it is also possible that the employer may be liable for the fraud too, most usually where it can be proved that the employee who committed the fraud, acted within the scope of their employment.

What penalties can you face for employee fraud?

There are many types of fraud, meaning that the sentencing can completely vary depending on the type of fraud committed. For fraud in general, the maximum sentence for is 10 years imprisonment, whereas the minimum sentence a perpetrator could receive is a fine or a community order. 

What sentence someon may receive can also be determined based on several aggravating and mitigating factors.

There are countless aggravating factors which could potentially increase the sentence given,  including:

  • If an offender have previous convictions
  • If the offence was committed on bail
  • Steps were taken to prevent a victim from reporting fraud to authorities
  • Concealing or disposing of evidence
  • Wrongly placing blame on another individual

Some of the mitigating factors that can reduce a sentence include:

  • Co-operating with authorities, for example, in any of the police interviews
  • Genuine remorse
  • Voluntarily reporting the offence
  • Age of the offender/lack of maturity
  • No previous convictions
  • Good character
  • Presence of a learning disability
  • Determination to address the offending behaviour

Occasionally any mitigating factors can outweigh any aggravating factors.

Should you speak to a solicitor if you’ve been accused of employee fraud?

Yes, where you have been accused of fraud, you should seek legal advice and assistance from a fraud defence lawyer.

An expert fraud lawyer will take the time to listen to the facts of your and advise you on the right response to an accusation of fraud.

At Renshaw Derrick ,our serious fraud solicitors have decades of experience in defending clients facing serious fraud charges, including employees who have been accused of fraud. With our support, we can help to minimise the issues caused by the allegations and help you restore your life to normal.

Get in touch with our serious fraud solicitors in Bournemouth, Dorset, today

Get in touch with our serious fraud defence lawyers in Bournemouth by giving us a call, emailing mail@renshawderrick.co.uk, or by filling in our online enquiry form.