ACCOUNTANCY firm KPMG's annual 'fraud barometer' reveals a 42 per cent increase in the number of lawyers and accountants charged with serious fraud.
Partner in KPMG's fraud investigation unit Adam Bates said although the figures for lawyers and accountants were lumped together, most cases related to lawyers.
The barometer recorded 17 lawyers and accountants charged with fraud in 1995, compared with 12 for the previous year. The money involved has increased from £28.9 million to £38.4 million in 1995.
Bates said 11 of the 17 charges related to lawyers, but a similar breakdown of figures was not available for 1994. Six of the 17 cases involved lawyers allegedly plundering client funds. One solicitor defrauded the Legal Aid Board, another faced insurance fraud claims.
“The barometer talks of both proven and alleged fraud, and so includes people who have been charged but not yet found guilty,” Bates said.
He suspects the increase is related to hard financial times. “People in small firms who would normally be upright, honest professionals have in some cases been tempted to dip into client funds,” he said.
“This can be minimised by the 'four eyes' principle, which means two people controlling payments going out of client accounts.”
A Solicitors' Complaints Bureau spokeswoman was surprised at the financial size of the increased fraud. She said the bureau had an improved intelligence unit which was more likely to catch fraudulent activity in its early stages.
“Because we're getting into firms a lot earlier, the amount of money that is missing is reducing. The shortage we are discovering on client accounts is about one fifth the amount we found five years ago.