Cases of fraud reached £516m in the first half of this year, with the biggest threat now coming from professional criminals tampering with the supply chain, according to research from KPMG.

The firm's Fraud Barometer shows fraud levels up by 38% compared with the £347m of losses recorded in the first six months of 2012. The average value of cases also increased, from £2.8m to £3.5m.

KPMG says professional criminals have become the biggest perpetrators, responsible for frauds totalling some £290m, up from £110m in 2012. Supply chain frauds are a key element in this, accounting for £61m, up from less than £1m in 2012.

Hitesh Patel, UK forensic partner at KPMG, said: 'In one particularly shocking case, a company sold fake bomb detectors to Iraqi authorities, at a financial cost of £55m, but the real damage was human injury and suffering. The risk to safety and therefore life through supply chain fraud can have serious operational and reputational consequences which often get overlooked as a result of financial impact being a primary focus.'>

The survey also showed a near quadruple increase in fraud committed against investors, with frauds totalling £74m coming to court compared to £19m the previous year. Loan and mortgage fraud also rose, up from £59m in 2012 to £160m. Overall, KPMG's analysis shows that governments and financial institutions lost £405m to fraud in 2013 compared with £271m in 2012.

Most fraud (86%) was committed by men, and by people over 35 (95%), according to KPMG's research.