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Firms Warned of Threat of ‘Long Term Fraud’

More sophisticated gangs of organised criminals are using the recession to prey on companies with ‘Hustle’ style fraud or ‘long cons’ according to experts BTG Forensic in Leeds.

“We have seen a marked increase in clever, longer term fraud such as the type featured in the BBC drama series, The Hustle, with groups of professional con artists targeting a specific victim with a planned swindle which may take many months,” comments Richard Pughe, partner at BTG Forensic in Leeds. “With companies more desperate to generate sales as the recession continues to bite, the conditions are perfect for long firm fraud and these gangs are seizing the opportunity to take advantage of the unwary.

“It is more important than ever that businesses are vigilant and cautious even when they are approached by apparently legitimate companies as some may have been set up with the sole purpose of defrauding suppliers,” continues Richard who specialises in fraud and criminology. “There are criminal gangs operating in the North East which target small and medium sized companies; they build a relationship with them over a number of months, place a few smaller orders which they pay for upfront and then ask for credit for a larger order. The criminals receive the goods, sell them and vanish without making full payment. As these gangs are professionals, they may well prove hard to trace.

“The criminals will often have a buyer for their goods before they target their victims. Among the businesses most likely to be hit are those which supply consumer goods such as handbags, mobile phones and computers which can be easily sold on – even more of a problem as Christmas approaches.”

Experts fear that with profit margins already under threat, being the victim of long firm fraud could prove a fatal blow for many small companies.

“Businessmen need to research new clients, for example, by checking records with Companies House, and also use their business acumen to avoid jumping into a deal which is too good to be true,” advised Richard.

BTG Forensic, part of the Begbies Traynor Group, specialises in forensic accounting, financial investigation and valuation expertise.

Julie Palmer

About the author

Julie Palmer

Regional Managing Partner

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Julie is a law graduate who qualified with Price Waterhouse in 1994. Julie joined Smith & Williamson in 1997 and became a partner in 2001. With Mike Stevenson, Julie set up Middleton Partners offices in Salisbury and Southampton, both of which are now part of Begbies Traynor.

Julie is a member of the Insolvency Practitioners Association and the None Administrative Receivers Association and is a Fellow of The Association of Business Recovery Professionals. Julie deals with all aspects of Corporate Recovery and turnaround work and takes all form of personal insolvency appointments.

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