Who's the fraud suspect? Try the boss

Bosses are the people most likely to rip off businesses, according to the survey. Photo / Kenny Rodger

The person most likely to rip off a business is a manager, an industry survey has found.

Staff were responsible for 30 per cent of fraud cases in the 18 months to June, the "fraud barometer" of financial adviser KPMG reveals.

Of the 91 fraud cases before the courts in that period, managers were the perpetrators in 29, defrauding their employers of about $44 million.

This was followed by other employees, in 15 cases involving about $5 million.

The most common fraud was an employee or manager manipulating accounting procedures to divert money to their own bank account.

Bosses also obtained larger sums - more than three times the average amount defrauded by other employees.

The survey covered cases in which fraudulent activity exceeded $100,000 and police had charged someone.

KPMG forensics partner Mark Leishman said several of the cases related to offending before the economic downturn so he expected the numbers to increase.

The payroll or accounts payable areas were the most susceptible to accounting fraud, usually by the creation of fictitious payments.

"These figures confirm that fraud is a constant and serious threat to all sectors of the New Zealand economy, including business, governments, non-profit organisations, and individuals."

Most popular targets for large frauds were commercial businesses, with 26 frauds (29 per cent of the total) in court since early last year.

"A slackening in oversight of internal controls by businesses during the economic boom of recent years is likely to have contributed to the success of staff perpetrating significant frauds," Mr Leishman said.

Government bodies are the other major target for fraudsters.

Most frauds against the government related to tax - such as not declaring income or using false information to obtain refunds.

But they also included benefit fraud, grant or contract scams and false accounting frauds by internal staff.

Financial institutions including banks and insurance companies were also popular targets.

* Swindles

In 91 court cases in the 18 months to June, the amount defrauded was $93 million.

They included false accounting (28 cases), tax evasion (11), fraudulent loans (8), tax fraud (7) and internal bank fraud (4).

Main perpetrators were managers (29), employees (15), customers (13), organised crime groups (13) and taxpayers (5).

Principal targets were commercial businesses (26), Government organisations (25), financial institutions (16), customers (6) and investors (5).