London fraud jumps to highest in 20 years

The level of fraud in London hit its highest level in more than two decades last year, with the average case now worth more than £7.5 million.

The annual Fraud Barometer, published today by accountancy group KPMG, showed that 80% of the UK's fraud took place in the capital last year.

The aftermath of the recession triggered a 33% jump in the number of cases, up to 143 in 2010 from 107 the previous year.

Hitesh Patel, KPMG forensic partner, said: "Fraudsters are becoming increasingly sophisticated, focusing on the big institutions where a successful hit can see them walking away with large amounts of cash."

Some of the biggest cases of the year included a gang of Ukrainian builders who netted £8 million in fraudulent tax rebates and spent the cash on prostitutes, top-marque cars and riverside apartments before being sentenced to six years in prison.

In another case, a fraud investigator with Newham council was sentenced to two years in jail for diverting £200,000 in ghost payments to two landlords over an 18-month period.