There has been a lot of public spending in some areas in the last decade. Billions have been pumped into the grossly inefficient health system for example. Fraud detection and prosecution has always struggled to win resources and the recent bail out of the banking system means that the competition for public funding will be even stronger.
Barristers' and solicitors' income from criminal work has been eroded over recent years with the result that in some cases they have refused to act and accused parties have been allowed to walk free. The cutbacks are now hitting the private sector fraud specialists and expert accountants who support the police and are essential for progressing any complex financial case. In the UK the funding of expert accountants working in fraud cases will be reduced by around 20% according to the Legal Services Commission.
The police fraud squads and economic crime units are experiencing similar funding cuts. Given their administrative burden they seem to have less and less time for front end policing. This will result in the underfunding or even overlooking of the so called 'non serious' crimes that inevitably will include fraud. Commentators estimate the cost of fraud within the UK alone to be as much as 䀆 billion, with proportionately higher costs in the USA.
There is no way that approximately 450 full time police fraud officers can handle this level of economic crime? A lot of fraud is never reported for fear of publicity and is therefore not investigated. We will never really know how much. Loss due to fraud is a crime that is hidden beneath the surface of our daily lives and only that which is discovered, investigated and prosecuted is every fully counted. The rest passes by unnoticed.
The cunning thief can target a huge number of victims for just a couple of thousand pounds each. Lumped together the whole fraud will be worth a substantial sum, but each victim separately has little power or voice to do anything. It is possible for the victims to proactively group together to fund their own private action but more often the case just fades into the background.
There is a lot of excitement concerning the new National Fraud Reporting Center. It may assist with our understanding of the volume of fraud so that resources can be directed in the most sensible way that will reduce its threat. Investing in accredited police fraud investigators and outsourcing work to experienced and capable forensic accountants specializing in fraud matters is a big part of the answer but with the increasing cut backs in public sector spending it may be the case that the fraudsters are safe for a little while yet.
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