by Jenha White
Serious fraud cases involve amounts over $500,000 and it is mainly the professional advisor and mortgage areas that have seen a dramatic change.
The number of frauds involving professional advisors, such as accountants and lawyers, has increased from two to four since March 2008.
Mortgage and property frauds have doubled from four to eight cases.
Chief executive of the Serious Fraud Office Grant Liddell says more mortgage frauds have come to light as financial institutions have been less tolerant of false valuations.
A false valuation often leads to financial institutions lending more than properties are worth.
He says formerly some of these cases were treated as the cost part of business, but not anymore now that conditions are tighter.
The Serious Fraud Office expects more serious fraud cases will come to light as assessment, detection and investigation of a fraud case can take 12 months or longer and the economy is only just rising out of recession at the moment.
Prosecution then usually takes about a year which means the book of business is relatively slow moving.
Considering this, the Serious Fraud Office expects the number of cases arising from the recession may well take some time to materialise.
"It is often towards the end of recession that the pressures that cause offending to come to the surface become most acute," says Mr Liddell.
Many of the frauds that will come to light from now on will have begun years earlier when economic conditions were good.
The recession has acted as a catalyst in the detection of fraud.
As the high-flying American investor Warren Buffet says, "you only find out who is swimming naked when the tide goes out".
PricewaterhouseCoopers has released a review of fraud in a downturn and this looks at how fraud and other integrity risks affect business.
The review contains the Fraud Triangle developed by the criminologist Dr Donald Cressey which says there are three conditions commonly found when fraud occurs.
The perpetrator experiences some incentive or pressure to engage in misconduct, there is the opportunity to do so and the perpetrator is often able to rationalise or justify their actions.
With the presence of the recession, these three factors are magnified and this creates pressure for people to cross the line between what is acceptable and what is unacceptable behaviour according to the Price Waterhouse Coopers review.
With the annual report of the Serious Fraud Office yet to come out, there may still be more cases of fraud to be uncovered.
Jenha is a TPL staff reporter. jenha@tarawera.co.nz
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