Pandemic leads to major spike in whistleblowers turning to SFO to report alleged fraud
The pandemic has led to a near 20 per cent rise in whistleblower reports about alleged fraud.
Workers may have falsified accounts to cover up theft or inflated sales figures in a bid to achieve bonuses during the pandemic, a new report by consultancy firm Accuracy has found.
There was a 17 per cent rise in whistleblowing reports to the Serious Fraud Office (SFO), up from 128 in 2019/20, to 150 last year.
The pandemic, which led to a recession and major economic shock, slowed down trade that can make it easier to detect irregular activity and fraud, according to Accuracy.
The SFO took action against nearly 90 per cent of the reports it received, and conducted further investigations with other agencies, such as HMRC.
Partner at Accuracy, Morgan Heavener, “heard anecdotal reports that employees working remotely have been less likely to report fraud to their employers, and some of those employees may have instead made reports to government authorities like the SFO”, directly.
“Internal controls at many companies changed during the pandemic, and the lack of ‘physical’ surveillance may have given some the false impression that their fraud would go undetected.
“We are increasingly seeing that this is not true.”
This comes after HMRC announced that nine per cent of furlough claims were either fraudulent or paid in error. Any or individuals found guilty of fraud face large financial penalties, or time in jail, with oilfield service providers Petrofac fined £47m in October 2021 for failure to prevent bribery, with the group’s head of sales sentenced to two years in prison.
Director at Accuracy, Roberto Maluf, warned that “the severity of the potential charges bought forward by the SFO can have huge financial consequences, but also cause irreversible reputational damage.
“What one employee does can have serious implications for the entire business.”