Recession crime wave hits Britain

A recession crime wave has hit Britain with police uncovering a dramatic rise in fraud, The Daily Telegraph can disclose.

By Richard Edwards, Crime Correspondent
Last Updated: 9:45PM GMT 06 Mar 2009

Senior officers revealed a 63 per cent increase in reported financial crime compared to this time last year, with more than 10,000 victims across UK at a cost running into "hundreds and hundreds of millions of pounds".

Det Chief Supt Steve Head, who runs the economic crime unit at the City of London police, told The Daily Telegraph that it is "just tip of the iceberg".

His force, which takes the lead nationally on fraud investigations, have 615 live investigations into 689 suspects - from individual white collar cases to multi-million pound "mini-Madoff" investment scams and massive mortgage frauds.

Some middle class families and individuals have turned to criminality because of "desperate" times and people are even more "vulnerable" to investment scams after the Bank of England this week cut interest rates to 0.5 per cent, police said.

Detectives are also unravelling a series of multi-million pound property frauds which were hidden during the boom years when house prices were at record highs.

Mr Head said: "This has been going on for a long time under the surface but as the tide goes out it has left for us to see everything that it has left behind."

He added that the rise in fraud was down to three factors.

"There is an increased awareness of fraud and willingness for victims to report it, and we continue to urge people to do that and come forward.

"The other factors are offences that are attributable to the credit crunch. There are areas like mortgage fraud, which has been going on for some considerable time and have come to light now because of the downturn in the financial markets.

"Other offences are growing because of how the markets are now and the continued downturn. For example, with interest rates at 0.5%, it makes people more vulnerable to being targeted by fraudulent offers of huge investment returns.

"Half a per cent is nothing, especially if this is your pension or a redundancy payment. Unfortunately criminals are profiting from these people's desperation."

Police fear that the levels of fraud will continue to escalate as they uncover further major cases.

The police chief said: "There is more to come in terms of investment fraud in particular. The reported levels of fraud are just the tip of the iceberg. I do not want to try to quantify it, but it runs into hundreds and hundreds of millions of pounds. The figures are huge. And this is exactly the times when the impact of it is at its greatest and people need to be most careful."

One of the cases being investigated is that of suspected rogue trader Terry Freeman. He ran GFX Capital Markets, which has collapsed with estimated losses of £44 million and is suspected to have been run as a "Ponzi" scheme, similar to the one that disgraced Wall Street financier Bernie Madoff is accused of running in the US, albeit on a much smaller scale.

About 800 investors, including professional footballers and several Metropolitan Police officers, are believed to have lost money in the collapse of GFX.

http://www.telegraph.co.uk/news/newstop ... itain.html