KPMG Forensic Fraud Barometer on current white-collar crime
Last year, 59 cases of white-collar crime were dealt with in Swiss courts. The volume of damage was high. A large proportion of the perpetrators came from within their own organization, acted alone and had as their central motive for enrichment the financing of a lavish lifestyle or the repayment of debts. The current "KPMG Forensic Fraud Barometer" shows this and more.
Last year, 59 cases of white-collar crime in Switzerland caused damage amounting to CHF 426 million. Compared to the previous year, however, the volume of losses fell significantly: from CHF 1.4 billion to CHF 426 million, whereby the all-time high in 2016 was primarily due to a case with a loss volume of CHF 800 million and three cases with a volume of over CHF 125 million each.
Compared to the long-term average of CHF 512 million, the volume of claims in 2017 was slightly below average.
The most common offences in the area of white-collar crime in 2017 were commercial or simple fraud and embezzlement. The motivation for the perpetrators was often to finance a lavish lifestyle or to pay off debts. As in previous years, private investors were the most affected victim group. Losses here amounted to around CHF 162 million, which corresponds to an average loss of CHF 20.2 million per case.
Great damage in the case of acts committed jointly
Due to their special position in the company, managers still potentially pose the greatest danger. The analysis shows that managers were responsible for the highest total loss in 2017 (compared to other offender groups) at CHF 120.9 million. Employees showed a total loss of CHF 117.4 million, but after deducting an individual case of CHF 100 million, the total drops to CHF 17.4 million, which corresponds to an average loss of CHF 1.7 million. In comparison, the average tort amount for management was CHF 11 million.
In 2017, it was once again evident that acts committed jointly by management and employees have particularly serious consequences: The average loss in the three cases amounted to over CHF 25 million.
Example 1: Embezzlement
A former asset manager speculated in the course of his work at a bank and covered the resulting book losses with misappropriated assets of his clients. The financial loss amounts to around CHF 100 million.
Example 2: Ponzi scheme
In another case, the perpetrator acted according to the snowball principle and promised investors high returns on their deposits. Some of the money was invested, but the perpetrators used the bulk of the assets for self-enrichment. In the process, a loss of CHF 73 million was incurred.
High number of unreported cases
Every year, the KPMG Forensic Fraud Barometer records court cases that have been publicly heard and published in the media. It does not include crimes that are reported to the police but never lead to convictions. Moreover, experience shows that the majority of crimes are not even reported to the police. "The reasons for this lie in the companies' fear of reputational damage should the offences become public," Matthias Kiener, Head of Forensics at KPMG Switzerland, summarises the problem. "In addition, the fact that the perpetrators of cybercrime, for example, cannot be identified with a reasonable amount of effort plays a decisive role," adds Nico van der Beken, Head of Forensic Technology at KPMG Switzerland.
Further information and details on the "KPMG Forensic Fraud Barometer" can be obtained from KPMG AG
