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Timaru police are warning people to be vigilant after three reports of online fraud in recent days.
More than $ 70 million in large-scale fraud has been reported in New Zealand in the past 12 months, and Covid-19 is creating a climate for fraud to flourish, says a new report.
KPMG’s latest Fraud Barometer shows that in the 12 months through July, $ 72 million worth of fraud was detected, slightly lower than the previous 12 months. However, the median value of fraud cases increased to $ 3.8 million, from $ 3.4 million previously.
Employees committed twice as many fraud as managers. Eight cases of employee fraud were discovered, totaling $ 5 million, including bribery and redirection of funds to personal bank accounts.
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In contrast, four cases of management fraud were reported for a total value of $ 3 million.
There was also a sharp increase in the amount of investor fraud that amounted to $ 62 million, $ 35 million more than the previous year.
KPMG said that Covid-19 had created a “perfect storm” of fraud factors.
It had created a disruption in normal business processes that bypassed normal controls, giving scammers opportunities while chaos allowed others to rationalize bad behavior.
Nearly 60 percent of the most recent cases were due to internal control failures, which may be because attention shifted elsewhere during the pandemic, according to the report.
“We therefore expect to see an increase in the number of fraud cases occurring in the next few years, as these cases emerge and make their way through the courts.”
KPMG said it had not seen any wage subsidy fraud so far, but “due to the magnitude of the amount that has been paid,” it is not ruling it out.
Stuff
Eugene John DeMarco was convicted in December last year of fraud related to his employment at Sir Peter Jackson’s company, The Vintage Aviator.
The gender of the offenders was almost equally divided between men and women, and the average age of a scammer was 57.
Nineteen major fraud cases were reported, including two “super scams,” worth more than $ 3 million.
The largest was a Ponzi scheme that got $ 45 million from wealthy Japanese who wanted to move or invest in New Zealand. The fraud was only discovered when the financial advisor operating the scam died.
Tom Tanaka of Auckland-based East Wind Group said it could provide an 8 percent return. His death resulted in the liquidation of the company, affecting more than 200 investors.
In another case, a business owner misled consumers and wholesalers by selling caged eggs as free-range eggs, increasing the company’s profits by $ 320,000.
A former employee of filmmaker Peter Jackson and Fran Walsh also committed fraud by selling old company-owned planes without authorization and keeping the proceeds.
He also used one of the planes as collateral to dishonestly obtain a bank loan. About half of the $ 2 million in diverted funds was used to pay off a debt with a trust controlled by the filmmakers.
Financial advisor Barry Kloogh was jailed for a $ 16 million Ponzi scheme.
The biggest victim of fraud was the Government, which was subject to 37% of the cases in number, although they only represented around 5% of the total value.
