KPMG Forensic Fraud Barometer reveals billions in losses

According to the KPMG Forensic Fraud Barometer, 57 white-collar crime cases were handled in Swiss courts in 2016. These cases in the area of white-collar crime caused damage of CHF 1.4 billion. The Barometer, which analyzes court cases heard in public and published in the media every year, thus records an inglorious record. Compared with 2015, the extremely high volume of damage is striking:

This rose from CHF 280 million to CHF 1.4 billion. The all-time high is primarily due to a case with a claims volume of CHF 800 million and three cases with a volume of over CHF 125 million each.

The average loss amount for investors was CHF 165 m, for the state alone. CHF 13 m

The KPMG "Forensic Fraud Barometer" is based on white-collar crime cases with a loss amount of at least CHF 50,000 that were tried by a Swiss criminal court in the year under review and reported on in the most important Swiss daily and weekly newspapers.

economic crime rate

The total loss of over CHF 1.4 billion is the highest level since KPMG began collecting data, with the public sector being particularly affected, but investors (private and institutional) were also massively damaged in 2016. KPMG emphasizes: "Independent investment advisors and foreign exchange dealers often acted as delinquents in these cases."

In the previous year, private individuals and non-commercial organisations suffered the most from economic crime.

Example: Embezzlement

In another case, the chairman of the board of directors, the former managing director and a client advisor of the custodian bank of an investment firm embezzled around CHF 170 million. As a result, 2,500 clients were harmed.

Danger from managers

The most frequent offences in the area of white-collar crime in the past year were commercial or simple fraud. The motivation for the perpetrators was often to finance a lavish lifestyle (13 cases) or to avert the bankruptcy of their own company (7 cases). In the case of white-collar crime, executives pose the greatest danger due to their internal position and scope for action in companies:

Thus, in 58 percent of all cases, management alone was responsible for the acts and in a further 21% of the cases, management was involved together with employees.

Accordingly, active prevention work in the organizations would be important, comments Philippe Fleury, Head of Forensics at KPMG Switzerland, on the Barometer results.

Bribery and corruption weaken the economy, the state and society. Business leaders and politicians are aware that progress in the fight against illicit money flows is only possible with cooperation between the public and private sectors.

Promote cooperation

For companies, the fight against such misconduct has become even more challenging in recent years. First, because a growing number of governments have tightened or newly introduced anti-corruption regulations. Secondly, the fight against corruption has become more difficult in the globalized world because internationally operating companies have to deal with different corruption risks locally. KPMG's Anti Bribery & Corruption practice has a network of 3,000 dedicated specialists in 50 countries and can help companies and organizations prevent or respond effectively to illegal business practices.

More facts from the KPMG Forensic Fraud Barometer can be found in this Link