City chief calls for fraud action

Writing in the Financial Times, the City's policy and resources committee chairman, Michael Snyder, says the UK is suffering from "complacency".

"The UK record on punishing fraudsters could be better," he says.

The warning comes after the government set out proposals for stiff sentences and plea bargains for fraudsters.

The Fraud Review, published by the Attorney General Lord Goldsmith earlier in July, said that too often frauds were not reported in the UK - often because the perception was that they would not be investigated.

That, Lord Goldsmith said, helped fraudsters continue to find new victims and made it more difficult to spot patterns.

"Some big companies regard fraud as a risk they have to manage down to acceptable levels... that attitude smacks of complacency"
Michael Snyder, City of London

He suggested that fraud squads - a shrinking resource almost everywhere in the UK outside London - should have their funding ring-fenced, and that the City of London Police should form the basis of a National Lead Force on fraud.

According to KPMG, almost £1bn in major frauds worth more than £100,000 were dealt with by the crown courts in 2005, and most experts are certain the overall cost of fraud to the UK is much higher.

The review had been triggered in part by a string of collapsed, high-profile fraud prosecutions - notably the £60m Jubilee Line case.

'Chains, not cufflinks'

In his Financial Times article, Mr Snyder welcomed the review's ideas.

He said the divergence between the UK and the US was stark when it came to attitudes to fraud.

"How can it be right that a serious fraudster who steals more than £1m is sentenced to an average three years in prison?" he said.

That was much less than another - non-white collar - criminal stealing £1m would receive, even though the damage was similar.

In contrast, Mr Snyder pointed to the heavy sentences meted out to fraudsters from Enron and Worldcom in the US.

"Whatever you may think of the merits of the NatWest Three case, in the US fraudsters and those accused of serious fraud are as likely to wear heavy chains on the way to court as cufflinks," he said.

Without action, he said the cost to the City and to London as a whole - not to mention to the victims, and to the wider public in higher prices and insurance costs - could be grave.

"Some big companies regard fraud as a risk they have to manage down to acceptable levels," he said. "That attitude smacks of complacency."

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