2022 recorded more economic crimes again

According to the latest "KPMG Forensic Fraud Barometer", in 2022 Swiss courts dealt with 78 cases of white-collar crime involving an offense amount of at least CHF 50,000. This represents an increase of 10 cases or 15 percent compared to the previous year. There was also a slight increase in total damages: from CHF 567 million to 581 million. The actual figures are likely to be much higher, as many cases are not even reported.

Private individuals most frequently targeted by white-collar criminals

Since 2019, white-collar crimes heard by the courts have been on the rise. 48 cases were judged by Swiss courts at that time. "One reason for the increase is that white-collar criminals have found new ways to engage in fraudulent activities in the wake of the Corona pandemic," said Bob Dillen, head of KPMG Switzerland's forensics department.

With 40 of the total of 78 cases heard by the courts, private individuals were the most frequent victims of white-collar criminals. They thus overtook the long-time leader "public institutions". In the previous year, with 11 court cases, significantly fewer private individuals were affected.

Public institutions with greatest damage

Swiss courts dealt with 19 cases of white-collar crime in which public institutions were victims in 2022. The public sector's loss amount of CHF 419 million corresponds to almost three-quarters of the total loss amount and an average offense amount per case of more than CHF 22 million. "Reasons for the high attractiveness of the public sector for white-collar criminals are, on the one hand, the considerable financial resources managed there and, on the other hand, the often complex structure of public institutions, which can favor weaknesses in the internal control system," says Dillen.

In seven cases, there were convictions related to illegally obtained Covid 19 credits. "We expect many more white-collar crimes related to the pandemic to come to light, as they can take years to uncover, investigate and try in court," Dillen explains.

The most common economic crimes: embezzlement and (social) insurance fraud

Despite seven cases related to unlawfully obtained Covid 19 credits, (social) insurance fraud was only the third most common type of offense in 2022. Although the number of such court cases decreased from 20 to 12, the average offense amount per case increased almost by a factor of 10 due to a large individual case with an offense amount of over CHF 28 million. The most frequent type of offense in 2022 was embezzlement, with 14 cases heard by the courts - with an average offense amount of around CHF 1 million.

Private individuals also largest group of offenders

As in the previous year, private individuals were the largest offender group in 2022, accounting for 30 out of 78 of all white-collar offenses negotiated. The second-largest offender group, with 17 cases and a total offense amount of more than CHF 82 million, were employees in executive functions ("management"). The average amount of crime per case was almost CHF 5 million, which is about six times higher than for the perpetrator group of private individuals.

Even though companies and public institutions had fewer court-prosecuted white-collar crimes than in the previous year, one-third of the crimes were committed in the workplace. "The danger from within should not be underestimated," Dillen points out. For those companies that have not yet fully adapted their compliance requirements and security systems to the new realities, the forensics expert recommends upgrading and leveraging data and the latest technologies, such as machine learning and AI, to prevent and detect fraud. "Since fraudulent activity can never be completely ruled out, additional measures such as providing a whistleblower platform where employees can report criminal activity and suspicious cases are recommended," Dillen adds.

Most economic crimes in central Switzerland, the largest in the Lake Geneva region

Central Switzerland accounted for 21 of the 78 cases, or just under a quarter of the offenses tried. In the previous year, there were twelve cases. The Zurich region took second place with 18 cases. In the Lake Geneva region, 15 white-collar offenses were tried compared to six in the previous year. The high crime total of over CHF 415 million in this region is striking. This corresponds to a share of more than 70 percent of the total crime amount. The reason for this is a tax offense committed by a private individual, with an offense amount of CHF 340 million.

Source: KPMG