It's been an embarrassing week for the National Health Service with two employees in positions of trust jailed for separate operations which collectively ripped off nearly £3 million from hospitals.
Both perpetrators were in their thirties, bearing out new research from accountants KMPG showing that fraudsters and scam merchants are getting younger all the time. Although some commit rip-offs well into their seventies – convicted boiler room boss Tom Wilmot for example – the trend is for the sweet and innocent to dip their hands deeply into the till or operate scams such as phoney wine sales or carbon credits.
Stacey Tipler, 32, was jailed for four years for stealing £642,000 from London cancer hospital Royal Marsden. Along with plot instigator Scott Chaplin, she used her accounts job to divert monies intended to pay for drugs to personal accounts. They spent the cash on designer shopping sprees, loan payments and a wedding which never took place. Chaplin was sentenced to five and a half years.
Tipler, 32, replaced drug company account numbers with those of plot accomplices who laundered the money in return for a commission.
At 38, convicted fraudster Trevor Barry Cosson, from Hastings, was slightly older than Tipler. But the former head of financial accounting at two NHS trusts had still not learnt the difference between his own assets and those of the organisations for which he worked. He ripped off £2.2 million which he used to buy 11 properties, mostly in the Hastings area.
In some ways, his method was similar to that of Tipler and Chaplin. He set up standing orders in the names of regular suppliers such as medical products or building services, issued phoney invoices appearing to be from them but ensured the resulting payments went into his bank own accounts.
He was sentenced to five years and four months. But at least the properties can be sold to recompense the health service, unlike Tipler and Chaplin who spent it almost as fast as they stole it.
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Sharp increase in younger fraudsters
According to KPMG's latest UK Fraud Barometer, there is “a marked increase in frauds committed by those under 35 years of age.”
This suggests, KPMG says, that organisations have failed to spot a ‘changing of the guard’ as the profile of fraudsters shifts from rogue senior executives to younger individuals funding extravagant lifestyles.
The firm's analysis of crown court cases going since the start of 2014 shows frauds committed by those aged 26-35 were valued at £62 million, up 285% on the first half of 2013. At the same time, frauds committed by those aged 46 and over fell by 72% to £88m.
These figures, of course, ignore the huge numbers of scams perpetrated by those outside the reach of UK law and by those who manage to escape prosecution often using small print get-outs. Many of these are run by fraudsters under 30, although sometimes the young people cited as directors are just unpaid work experience personnel.
One case, featured by KPMG, was that of a 30 year old man who convinced victims to invest in wine, which they believed would increase in value. More than 400 people were conned into handing over sums ranging from £20,000 to £2 million. Their cash bought him a Lamborghini and five-bedroom house with a swimming pool.
Hitesh Patel, UK Forensic Partner at KPMG, said: “Today’s fraudster is younger and just at ease with using technology and data as selling promises. They rely on the assumption of the innocence of youth, whereas the reality is that many of these fraudsters are nothing more than a wolf in lamb’s clothing. It is important for UK organisations to recognise that youth doesn’t always equal innocence, as a confident and tech savvy generation comes through, adept at circumnavigating conventional controls and staying under the radar.”
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Why young people are becoming fraudsters
So why do so many younger people turn to fraud?
Here are some reasons:
- They are more tech savvy than the older people they target. The “pre-internet” generation often has an implicit trust in what's online.
- They are better educated than a generation or two ago so they understand how to set up frauds, and more importantly, how to manipulate potential victims into disgorging their savings.
- Legal, well-paying opportunities are hard to find. They see City bankers engaged in all sorts of bad practices so they want some of that.
- It's safer, cleaner and much more profitable than mugging, burgling or car theft.
- The chances of being found out are low – at least not before they have made a lot of money – and history suggests most avoid custodial sentences.
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