Financial Crime World

Here is the rewritten article in markdown format:

Financial Crime Cases in the News: New Zealand Sees Reduction in Large Fraud Cases Despite Notable Exception

=====================================================

A new report by KPMG New Zealand has revealed a significant reduction in large fraud cases over the past 12 months, with the total value of such cases dropping to $21.6 million from $105.8 million in the previous year.

Largest Single Fraud Case Exceeds $8 Million

The largest single fraud reported this year was an $8.7 million case involving fraudulent home loans obtained by property investors between 2015 and 2016. The report noted that excluding this outlier, fraud value has remained reasonably steady year on year.

Perpetrators of Financial Crime

The KPMG Fraud Barometer, which summarises reported frauds in New Zealand for the period of August 1, 2022 to July 31, 2023, found that:

  • Company owners and management continued to be the most common category of perpetrators by volume.
  • Advisers and employees followed closely behind.

Government Sector Suffers Most from Financial Crime

The government sector was hit hard by financial crime, with a significant proportion of cases being committed against Inland Revenue. The report noted that cases relating to defrauding of the Covid-19 Small Business Cashflow Scheme are starting to be prosecuted but have been valued at less than the $100,000 threshold.

Cybercrime on the Rise

Figures from cyber security watchdog Computer Emergency Response Team (CERT NZ) show that financial losses due to cybercrime rose by two-thirds in the first quarter of this year. Nearly 2000 incidents of cybercrime were reported between January and March, up 12% on the previous three months.

Regulators Crack Down on Greenwashing

The regulators have already been carefully scrutinising greenwashing claims, putting in place a variety of legal frameworks and guidelines to make ESG claims more transparent and accessible. Investigations, enforcement actions and complaints in this area are likely to be on the rise in 2023 and beyond.

Occupational Fraud Remains a Major Concern

Occupational fraud is very likely the most costly and most common form of financial crime in the world. The term occupational fraud refers to frauds that are committed by individuals against the organisations that employ them.

Hotlines Effective in Detecting Fraud

70% of victim organisations had hotlines, which are mechanisms to report fraud or other violations. This might include telephone hotlines, dedicated email addresses, web-based platforms, and other mechanisms established to facilitate fraud reporting.

AI Used to Create New Forms of Fraud

Artificial intelligence is being used in a variety of industries, including finance, healthcare and retail. It is also being used to create new forms of fraud, which are becoming more sophisticated and difficult to detect.

KPMG Offers Support with Fraud Risk Management

Our Forensic team here at KPMG can offer support with the detection, prevention, and response to fraud risks in several ways, including:

  • Performing a fraud maturity assessment of your organisation’s current policies and practices against best practice standards.
  • Conducting a fraud risk assessment to understand, prioritise and address potential vulnerabilities.
  • Providing a confidential whistleblowing hotline service to facilitate early detection.
  • Independently performing or assist with investigations into alleged or suspected fraud.