account arrow-down-linearrow-down-small arrow-downarrow-download arrow-left-small arrow-leftarrow-link arrow-rightarrow-upaudio-less-volume audio-not-playing audio-plus-volume audio awarded books calendar close-modal closedate delete document education emailevent Facebookhamburger impact instagramjustice linkedin location-outline location opinion page phonepinterestplay pluspost preview project reports search-bigsearch-old search share star-full star-open startime twitterwelfare youtube zoom-in zoom-out

Criminal justice system deals with fewer than two per cent of detected fraudsters

By Nuffield Foundation

A new study from the University of Portsmouth, funded by the Nuffield Foundation, find that fewer than 2% of people caught committing fraud are dealt with by the criminal justice system.

The research found only 15,696 fraud offenders were dealt with by the criminal justice system in 2014-15, with a further 162,869 if TV licence evasion was also included. These offenders were caught by bodies such as the police, Serious Fraud Office or Department for Work and Pensions, and then prosecuted in the criminal courts. The research also found at least another 868,105 fraudsters were dealt with by private bodies such as fraudster registers and by regulatory bodies in the same year.

The major study was conducted by researchers from the University’s Institute of Criminal Justice Studies and funded by the Nuffield Foundation.

Principal investigator Professor Mark Button said: “This research highlights that the criminal justice system plays only a small role dealing with fraud related cases and the vast majority are dealt with by other public and private regulators.

“The nature and quality of the systems operated by these regulators does vary significantly. There are also large inconsistencies in the way comparable frauds are dealt with -justi some resulting in criminal prosecution, others only a regulatory sanction.”

The largest regulator was the NHS, which issued 606,063 penalty notices against those wrongly claiming exemption from NHS charges. At least 135,485 people who made fraudulent credit or employment applications were also added to private databases, such as the Cifas National Fraud Database, as ‘confirmed fraudsters’.

The research also investigated professional regulatory bodies and found 395 cases of what most would regard as serious cases of fraud had been dealt with solely by them. For example:

  • Finance director Nicholas Hill abused his position to defraud his employer of £250,000 using carefully planned purchasing and asset sale frauds. He was not reported to the police but was referred to the accountancy regulator, the ICAEW. He was struck off, fined £25,000 and ordered to pay £33,846 in costs for the case hearing (ICAEW, February 2014).
  • Alberto Micalizzi was the chief executive of Dynamic Decisions Capital Management, a hedge fund management firm which went into liquidation. He misled investors, lenders, the FSA and others. He deliberately hid the fund’s losses to attract new investors by buying a bond and then artificially revaluing it to create a US$400m gain. The FCA did not find sufficient evidence for a prosecution. The FCA banned him and fined him £2,700,000 (FCA reference AXM02173).
  • Karen Wilson was a senior occupational therapist who perpetrated an expense fraud against her employer worth £2,788. She was not prosecuted but was removed from the register of the Health and Care Professions Council (HCPC reference OT14127).

The finding that at least 1,046,670 people have been found to have engaged in fraud-related behaviours also illustrates how widespread the problem of fraud is in society.

The report illustrates different rates of offending in society and between different occupations. For example, the number of detected fraudsters per 100,000 was 25 for solicitors, 15 for the financial services sector, 13 for nurses, seven for chartered accountants and three for architects.

The research assessed 128 regulatory bodies and identified 71 which deal with fraud and 25 fraud-related databases. The findings highlighted significant differences in the quality of justice among regulatory bodies and highlights areas in need of further research and reform to improve justice.

The research is published not long after recent changes to the way crime statistics are collected to include questions about fraud in the England and Wales Crime Survey, which has highlighted an additional 3.6 million crimes related to fraud. When added to other crimes in the New Year, along with computer misuse offences, is likely to see a near doubling of crime.

This reports highlights priority areas for research to better understand these regulators and areas where policy reform is required to improve the quality of justice.” Professor Mark Button, Principal Investigator
By Nuffield Foundation

Explore our projects

In progress

Justice | 2019 - 2022

Understanding criminogenic influences on youth offending

View project
In progress

Welfare | 2019 - 2022

Children living with domestic violence: effects on children’s well-being

View project
In progress

Justice | 2019 - 2021

The Edinburgh Study: causes and impacts of criminal justice pathways

View project
In progress

Justice | Welfare | 2019 - 2021

Girls and women with experience of care and the criminal justice system

View project
In progress

Justice | Welfare | 2018 - 2020

The implementation of new rules and guidance for permanent foster care

View project
In progress

Justice | 2018 - 2020

Paths to administrative justice in Wales

View project
In progress

Justice | Welfare | 2018 - 2020

System conditions and welfare inequalities in children’s services

View project
In progress

Justice | Welfare | 2018 - 2020

Looked after children grown up

View project
In progress

Justice | Welfare | 2018 - 2019

Pathways of incarcerated children in care

View project
In progress

Justice | Welfare | 2017 - 2018

Visualising data in care proceedings

View project
Reported

Justice | Welfare | 2017 - 2018

Addressing the ‘care cases’ crisis: a sector-led review

View project
Reported

Justice | 2017 - 2019

Immigration judicial reviews

View project
In progress

Welfare | 2019 - 2022

Children living with domestic violence: effects on children’s well-being

View project
In progress

Justice | 2019 - 2022

Understanding criminogenic influences on youth offending

View project
In progress

Justice | 2019 - 2021

The Edinburgh Study: causes and impacts of criminal justice pathways

View project
Reported

Justice | Welfare | 2015 - 2018

Bridging the Evidence Gap in Family Proceedings

View project
Reported

Justice | 2016 - 2018

The impact of Litigants in Person on the Northern Ireland court system

View project
Reported

Justice | 2016 - 2017

Transparency and privacy in family courts

View project
Reported

Justice | 2016 - 2019

Implementation of recommendations of the Carlile report

View project
In progress

Justice | 2017 - 2020

Enhancing problem-solving practice in youth court

View project
In progress

Justice | 2013 - 2019

Timely disclosures mean timely interventions for young offenders and victims

View project
Reported

Justice | 2008 - 2012

The impact of anti-social behaviour interventions on young people

View project
Reported

Education | Justice | 2012 - 2015

Personal narratives and student achievement in pupil referral units

View project
In progress

Justice | Welfare | 2018 - 2020

Looked after children grown up

View project
In progress

Justice | 2019 - 2022

Understanding criminogenic influences on youth offending

View project
In progress

Welfare | 2019 - 2022

Children living with domestic violence: effects on children’s well-being

View project
In progress

Justice | 2019 - 2021

The Edinburgh Study: causes and impacts of criminal justice pathways

View project
In progress

Justice | Welfare | 2019 - 2021

Girls and women with experience of care and the criminal justice system

View project
In progress

Justice | Welfare | 2018 - 2020

The implementation of new rules and guidance for permanent foster care

View project
In progress

Justice | 2018 - 2020

Paths to administrative justice in Wales

View project
In progress

Justice | Welfare | 2018 - 2020

System conditions and welfare inequalities in children’s services

View project
In progress

Justice | Welfare | 2018 - 2020

Looked after children grown up

View project
In progress

Justice | Welfare | 2018 - 2019

Pathways of incarcerated children in care

View project
In progress

Justice | Welfare | 2017 - 2018

Visualising data in care proceedings

View project
In progress

Justice | 2017 - 2020

The Mental Health MHTS For Scotland

View project
In progress

Justice | Welfare | 2017 - 2020

Birth fathers’ recurrent appearance in care proceedings

View project
Reported

Justice | Welfare | 2017 - 2018

Addressing the ‘care cases’ crisis: a sector-led review

View project
Reported

Justice | 2017 - 2019

Immigration judicial reviews

View project
Siblings play ball in a playground - Siblings Contact and the Law
Reported

Justice | Welfare | 2017 - 2019

Siblings, contact and the law: an overlooked relationship?

View project
Reported

Justice | Welfare | 2017 - 2019

Measuring outcomes for children’s social care services

View project
Reported

Justice | 2016 - 2018

The dissemination of lessons from research to the Judiciary

View project
Reported

Justice | 2016 - 2018

The impact of Litigants in Person on the Northern Ireland court system

View project
Reported

Justice | 2016 - 2017

Transparency and privacy in family courts

View project
Reported

Justice | 2016 - 2019

Implementation of recommendations of the Carlile report

View project
Reported

Justice | Welfare | 2015 - 2016

Feasibility study for research into improving children’s social services

View project
Couple of African descent attends couples counselling to discuss finding fault in divorce
Reported

Justice | 2015 - 2019

Finding Fault? Divorce Law in practice in England and Wales

View project
Reported

Justice | 2015 - 2016

The fraud 'justice systems': a scoping study

View project
Reported

Justice | 2015 - 2017

The long-term consequences of domestic infant adoption

View project
Search projects

We improve people’s lives by funding research that informs social policy, primarily in EducationWelfare and Justice. We also fund student programmes that give young people skills and confidence in science and research.

We offer our grant-holders the freedom to frame questions and enable new thinking. Our research must stand up to rigorous academic scrutiny, but we understand that to be successful in effecting change, it also needs to be relevant to people’s experience.

Profile