Battle against white collar crime rages on

Data theft preoccupies Swiss companies Keystone

Corporate crime continues to haunt companies in the post-financial crash era, with larger firms most likely to suffer attacks, according to a survey from auditing giant KPMG.

A survey of 500 small and medium sized enterprises (SMEs) and 93 bigger firms found that each criminal act in the last two years cost companies an average CHF360,000 ($380,000). The 133 cases that made it to court in the same period saw losses amounting to nearly CHF1 billion.

Almost half of the larger firms (more than 250 employees) surveyed by KPMG admitted to being the victim of crime in 2011 or 2012, compared with 13 per cent of SMEs.

The vast majority of offences were embezzlement and fraud, more often than not perpetrated by the company’s own managers.

“There has been a massive increase in prosecutions since the financial crisis,” canton Zurich prosecutor Peter Pellegrini told a media conference. Pellegrini’s department handled 156 cases in 2011, nearly double the number of 2008.

KMPG corporate crime survey 2013

KPMG surveyed 593 companies in Switzerland, Germany and Austria. In Switzerland, 100 SMEs and 30 larger firms were asked about white collar crime in 2011 and 2012.

Some 47 per cent of large firms and 13 per cent of Swiss SMEs admitted being the victim of crime in this period.

Theft and embezzlement (246 cases) were the most frequent offences, costing SMEs some CHF4.7 million.

Other crimes included: fraud, data theft, corruption, money laundering and leaking of company secrets.

Large firms were most likely to be ripped off by their own staff (57

per cent of cases) than SMEs (40 per cent).

Nearly a half of all crimes were detected by tip-offs – from within or outside the company, including law enforcement agencies.

Outside forces

Some 79 per cent of firms interviewed by KPMG identified staff, unhappy with their financial situation or the size of their bonuses, as being a major threat.

But another worrying feature of white collar crime in Switzerland is the growing influence of external perpetrators who either plunder unwitting firms from the outside, or collude with company staff during the rip off.

The Swiss financial industry has been plagued by data theft in recent years that has been sold to other countries as evidence of tax fraud. More than half of the Swiss firms named such  offences as their top concern – 79 per cent in the case of larger firms – compared to just 13 per cent in Germany or Austria.

A growing number of Swiss companies have also been the victim of cyberattacks, according to KPMG head of forensics Anne van Heerden.

“Cybercrime is becoming quite some headache, with banks being attacked on a constant basis,” he told swissinfo.ch. “These attacks are mainly coming from China or other parts of Asia.”

Under wraps

Swiss companies appear keener than counterparts in Germany or Austria to deal with abuses in-house, thus keeping the offences out of the newspaper headlines.

Just over a third of large Swiss firms prosecute through the criminal courts compared to two thirds in Germany and in 58 per cent of cases in Austria. And only 18 per cent of Swiss SMEs take public legal action (50 per cent in Germany, 39 per cent in Austria).

In the meantime, white collar crime is on the rise, according to KPMG’s van Heerden. “We are seeing more and more cases every year and our forensic teams are constantly growing,” he told swissinfo.ch.