Economic crime: sharp increase in the Lake Geneva region

Last year, Swiss courts dealt with 52 cases of white-collar crime with a minimum offence amount of CHF 50,000. Total losses amounted to CHF 355 million (2019: CHF 363 million). The average offence amount per case in 2020 was CHF 6.8 million, slightly lower than in the previous year (CHF 7.7 million). Experience shows that a large number of cases are not reported to the police, which is why the number of unreported cases of white-collar crime is likely to be many times higher, according to KPMG.

Public institutions most affected

With 20 out of a total of 52 cases heard by the courts, public institutions were particularly often the victims of white-collar criminals. "A large proportion of the offences involving public institutions are cases of (social) insurance fraud," explains Anne van Heerden, Head of Forensics at KPMG. "We also saw money laundering, unfaithful management and tax fraud relatively frequently in 2020 compared to other offences," he adds. However, if you look at the offence of (social) insurance fraud in relation to the damage caused, it only plays a minor role, he said. Thus, although the eight cases of (social) insurance fraud account for 40 percent of economic crimes at public institutions, they are responsible for less than five percent of the total damage of CHF 203 million, at CHF 8.5 million. A single case of tax fraud accounted for more than CHF 72 million and thus caused a third of the damage to public institutions.

Private individuals as well as commercial companies were also confronted with great criminal energy: Compared to the previous year, the number of publicly heard cases for these two victim groups increased from 16 to 22, according to KPMG. The amount of crime almost quadrupled from around CHF 34 million to around CHF 130 million. In only one case was the victim a financial institution.

Fig. 1: White-collar crime by victim group (click here)

 Geographically 

Geographically, the Lake Geneva region is the most affected by white-collar crime, it says. In 2020, 19 offences were recorded in this region. This means that 40 per cent of the offences and more than a third of the total amount of losses are attributable to the Lake Geneva region. It said the sharp rise in convictions in this region, which had 13 cases in 2019, was particularly striking. With eight cases each, the regions of Zurich and eastern Switzerland registered the second most cases, according to KPMG.

In comparison, northwestern Switzerland was less affected with two offences and a total loss of CHF 1.3 million, while Ticino was less affected with a single offence heard in public and a total loss of CHF 15 million. The four cases heard by the Federal Criminal Court in Bellinzona involved total damages of CHF 43 million. As in the previous year, the average loss in the Espace-Mittelland region was by far the highest, at CHF 20 million. Three cases there caused damage in excess of CHF 60 million.

Fig. 2: Economic crime by region (click here)

Significant increase in the number of private individuals as a group of offenders

As in 2019, commercial fraudsters committed the most economic offences in 2020, with 19 cases. In contrast to the previous year, when management and employees were in second and third place respectively, private individuals were the second largest group of perpetrators in terms of number of offences this year, with 13 cases. In the previous year, only three offences were attributable to private individuals. What is also striking is the sharp increase in the amount of damage caused by this group of offenders. The damage for 2020 amounts to over CHF 144 million (2019: CHF 2 million). The sharp increase in the amount of loss was attributable to three major cases, which together caused damage of around CHF 130 million.

Organised crime appears to be negligible, with only one offence negotiated, but is responsible for the greatest damage per negotiated case, with an average damage volume of CHF 31 million. Across all offender groups, the average offence sum was 6.8 million Swiss francs, which was down on the previous year (7.7 million Swiss francs). Nine of the 52 cases caused damage of over CHF 10 million each.

Fig. 3: White-collar crime by offender group (click here)

Tax fraud as the biggest source of losses

Broken down by type of offence, unfaithful business management and embezzlement were among the most frequently tried offences in 2020, with ten cases each; together they caused more than 40 per cent of the damage throughout Switzerland, according to the report. If one looks at the average amount of damage per case, a different picture emerges. Unfaithful business management and embezzlement, for example, caused "only" average losses of CHF 8.3 million and CHF 6.9 million respectively. This roughly corresponds to the average amount of the offence across all cases, which is 6.8 million Swiss francs. In contrast, the average amount of the offence of tax fraud was over CHF 30 million, and CHF 20 million for the offence of corruption.

Fig. 4: White-collar crime by type of offence (click here)

Methodology

Every year, the "KPMG Forensic Fraud Barometer" records the court cases that are publicly heard and published in the media. For this purpose, more than 5,000 relevant articles from various Swiss media from the year 2020 were analyzed. In the current "KPMG Forensic Fraud Barometer", only articles reporting on convictions for economic crimes over CHF 50,000 in Swiss courts were taken into account.

Source: KPMG