The firm’s FraudTrack analysis looked at reported fraud cases over £50,000 in the UK. It found the number of reported cases fell slightly to 504 in 2016 compared to 519 the previous year. BDO says this means the average value of fraud rose 35.4% to a five-year high of £3.9m.

Public administration was the industry sector with the highest level of reported fraud, accounting for £1.4bn of the UK total. This has risen 204.7% from the £450.9m reported in 2015, due in large part to a single £1bn VAT ‘carousel fraud’ case involving a woman from York. The volume of fraud in public administration also rose, climbing from 114 cases in 2015 to 150 cases in 2016.

However, the value of reported fraud in financial services fell more than 62.1%, from £567.2m in 2015 to £214.9m in 2016. The volume of reported fraud also fell, dropping from 70 cases in 2015 to 58 cases in 2016, which BDO suggests may be related to increased public and regulatory scrutiny in this sector.

Within financial services, money laundering showed the biggest decrease in the value of fraud, falling from £201.6m in 2015 to £98.9m in 2016. The volume of cases, however, rose from 15 last year to 20 cases this year.

A key case involved a man arrested by City of London police on suspicion of money laundering. The arrest was made following the investigation of a UK bank account thought to be linked to an organised crime ring. Police discovered £30m worth of banker’s drafts during a raid on a home in the Welsh valleys in what is thought to be the biggest money seizure by UK law enforcement.

Mortgage fraud and third party fraud also showed a significant year on year decline both in terms of value and volume. Mortgage fraud fell from £151.1m in 2015 (13 cases) to £54.8m in 2016 (four cases), while third party fraud fell from £209.7m in 2015 (26 cases) to £47.6m in 2016 (17 cases).

Kaley Crossthwaite, partner and head of fraud at BDO, said: ‘It is extremely encouraging to see that the public and regulatory scrutiny within financial services is starting to gain some traction in reducing the volume and value of reported fraud. In particular, we have seen a marked decrease in the level of insurance fraud as firms in the sector adopt ever more stringent systems and controls to address fraud.

‘As with last year, the numbers have been skewed slightly due to a small number of very large cases. Removing these anomalies would show an apparent fall in both volume and value year-on-year.

‘However, this would not give us the full picture. Many high value complex fraud cases continue to be dealt with outside of the judicial system as companies prefer to handle these situations privately to avoid the reputational damage to their businesses. Our experience would suggest that both volume and value in real terms continue to rise despite efforts by companies to strengthen their processes.’

From a volume perspective, London and the south east continues to be the biggest contributor of fraud in the UK, with 159 reported cases (31.6% of all cases) followed by the north west with 73 reported cases (14.5% of all cases) and the West Midlands with 53 cases (10.5% of all cases).

The biggest case in London involved a £79.5m Ponzi scheme operated by three men who claimed their electrical wholesale business had won a contract to supply to the London Olympic Village. Their victims were persuaded to invest hundreds of thousands of pounds to meet urgent orders then paid seemingly high returns before being asked to ‘roll over’ their investments for two months.

Fraud against individuals continues to be the most common type of activity, accounting for 30.4% of all reported cases. Prosecutions against fraudsters in this area have remained at high levels by volume year-on-year, but in value terms they have fallen for the first time since 2012.

In 2016 there were 153 reported cases of fraud, with a total value of £172.3m compared to 152 cases totalling £276.7m in 2015. An analysis of these frauds shows that the majority of cases continue to target the elderly and vulnerable.

Crossthwaite said: ‘While the number of scams in this area has remained high, the value has come down for the first time since 2012 suggesting that, although people are still being conned, they are waking up to the issue sooner and are more effectively taking remedial action.’