White-collar crimes increase but cause less damage

Employees or executives are responsible in 40% of cases of white-collar crime Keystone

Swiss courts processed a record 91 cases of economic crime in 2015. However, total losses almost halved to CHF280 million ($275 million), the lowest level for eight years. The average loss per case was around CHF3 million. 

The number of cases was the greatest since consultants KPMG started gathering data systematically on white-collar crime in 2008. In 2014, the courts looked at 77 major cases of white-collar crime. 

However, the cost of those 91 cases was significantly down from CHF537 million the previous year, KPMG said in its Forensic Fraud Barometer on Tuesday. The most costly case involved an international bank and did CHF40 million worth of damage. 

KPMG said the apparent contradiction in these findings could be explained by previous results having been skewed to an extent by a few extremely large cases involving losses of more than CHF100 million. 

“Over the past few years, fraud, bribery and corruption have also attracted greater public attention, which has also raised awareness of the issue within organisations and has meant that significantly more fraud prevention measures are being implemented these days,” KPMG said in a statement. 

It added that there had also been a strong focus in recent years on setting up new compliance programmes, policies, codes of conduct and whistleblower mechanisms within larger organisations. 

Guilty employees 

With employees or executives responsible in 40% of cases, there has been a slight fall overall in the percentage of crimes perpetrated internally. 

However, the past few years have seen a shift away from executives and towards employees in terms of who the actual culprits are. 

“This shows that groups of perpetrators within the company itself continue to pose a major threat in terms of it falling victim to fraud,” said Philippe Fleury, head of forensics at KPMG Switzerland. 

The group of “other” victims – a category that includes private individuals, charities and non-governmental organisations – has grown considerably. Unlike commercial organisations, private individuals in particular do not usually have many – if any – preventive measures in place to prevent fraud and embezzlement. As a result, wealthy individuals who are in a relationship of dependency are an especially popular target. 

“With professional organisations having increased their preventive measures, it may become increasingly attractive in future for fraudsters to target non-professional ones and individuals,” Fleury added.