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Sharp rise in money laundering: BDO

24 January 2014

A sharp rise in reported cases of money laundering in the UK has been found, according to a report by BDO.

The FraudTrack report conducted by BDO, an accountancy and advisory firm, upon examination of all reported cases of money laundering related to fraud offences over £50,000, found that the total value of reported offences rose to £288 million in 2013 from £70 million in 2012. 

This represents an increase of 309% from the previous year. In addition, the actual number of reported money laundering cases rose to 39 in 2013, from 33 in 2012. 

The report also found that, looking at reported cases of money laundering in the UK, the financial services sector accounted for 51% of all cases in terms of value, but 25% by number of cases reported. 

Speaking to Governance & Compliance, report author Kaley Crossthwaite, Head of Fraud at BDO, said, ‘the current climate is one of regulation, and there is a greater demand from stakeholders for transparency.  This is driving up reports of fraud, where once the fraud was dealt with in-house and not reported, we are now seeing a greater appetite for openness.’

She added that the financial services industry has seen the greatest surge in regulation in recent years and the demand for transparency comes from the legislative framework and the regulator. ‘It is therefore not surprising to see that the most reported frauds are in this sector, although we cannot take this to mean that this is the sector most susceptible to fraud’. 

Also commenting on the financial services sector’s high value cases, Michael Grillo, Senior Product Marketing Manager at payment systems company ACI Worldwide, told this publication: ‘Wherever there are high volumes of capital, you can bet there will be criminal elements constantly looking to poke and prod at defences to see if they can grab a piece of it. Fraudsters follow the trail of money. There are huge volumes of capital tied up in financial services, much of which goes through regular transactions, which are perceived to be potential opportunities to skim off the top.’

In order to stay vigilant and tackle fraud offences head on, Grillo added that companies must make sure the left hand knows what the right hand is doing and that it is a rule that applies to all businesses and industries. ‘A joined-up, coordinated approach is key to identifying issues when they occur. All employees must understand that they are accountable and can be monitored for any and all activity.’

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