Fraud From the Credit Crunch – A Busy Time Ahead?

I recently wrote a post on my earlier blog site (which has unfortunately disappeared along with my older articles into my hosting server’s archives!) commenting on the state of the world economy as we draw towards the end of 2009 and how it will be effecting the level of frauds that are being discovered and investigated.

I concluded that we fraud investigators should be getting very busy as a result of the recession, along with insolvency practitioners and those who give advice on cost cutting and business turnaround.  Whilst there is some general activity increase particularly in London in the UK the great wave of new fraud cases has not yet broken. In fact the work load has been going up and down over recent months  but definitely not flat out or gaining momentum.

The initial worry was that my own portfolio was struggling, but this is not the case. I have been reasonably busy given one or two changes I have been making to my marketing efforts and then there is the increasing competition it seems! A number of recent tenders have been lost on price and this is one area where the recession is biting, in areas of civil investigation. Others are turning to fraud to fill in their shortfall. This is coupled with extreme pressure on public sector spending where certain agencies and regulators outsource their investigation work.

The word on the street from a number of my more frank and well known sources is that it is generally quiet.  From a couple of my insolvency sources it seems that the floodgate of businesses poised to go under is about to burst – whether this is before the end of the year or early next year we can only surmise.  This opinion is supported by a couple of contacts I have in the banking arena. They say that there is a lot of desperation building up (individually as well as for businesses) and the banks are not yet back to a position to assist fully.

Added to this are the reports from some of the economists that even if we are in or near the depths of the recession – it will be a long slow climb out. This will mean the weaker companies will go bust as the market place “cleans” itself up and that yes, frauds will be surfacing. It also means that the drivers for the fraudsters to start committing acts of fraud will be a strong as ever and this in turn means new cases will continue to reflect the present economy well into the next decade.

So my view remains the same. We will start to see a rise in fraud coming to light – as well as businesses going into some form of insolvency procedures – a rise that may well begin soon and keep on going for some time to come!

About Mark Jenner

Mark Jenner is an experienced forensic accountant specialising in fraud and white collar criminal matters. He provides independent financial investigation and expert accounting witness services to police forces, fraud regulators and criminal defence lawyers, also providing assistance and solutions to organisations embroiled in financial disputes.

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