Fraud by employees and managers now accounts for nearly half the fraud cases being brought to court, according to KPMG Forensic’s Fraud Barometer.

The Fraud Barometer, which has been running for 19 years, considers fraud cases above the £100,000 level being heard in the crown courts.

During the first six months of 2006, 123 cases worth £653 million reached court – compared to 88 cases worth £250 million in the first six months of 2005.

Management was the biggest perpetrator of frauds, accounting for £310 million of frauds coming to court.

A typical example of a managerial fraud was the prisons payroll boss from Thornton Heath in Surrey who created fictitious employees so she could pocket more than £180,000 and start a new life for herself in Jamaica.

Another case saw a construction company director steal some £400,000 by simply writing cheques to himself, undercharging customers in return for cash and racking up personal expenses on his company credit card.

There was a proliferation of cases of insider fraud within banks – most notably the case of the bank manager in Scotland who, in one of Scotland’s biggest ever frauds, created £21m in false loans over a period of five years.

Many bank insider frauds were carried out by low level employees, sometimes connected to organised criminal gangs – such as two call centre employees in Yorkshire who were part of a nationwide fraud ring that used customer credit card and bank details to swindle almost £900,000.

A number of frauds were fuelled by the need to feed a gambling addiction. An accounts clerk at a Japanese bank, for example, siphoned almost £500,000 from the bank to feed her internet gambling habit.

Another bank clerk gambled away nearly £300,000 from the bank account of an 84 year-old pensioner. Meanwhile, a bookkeeper at a Dorset construction company was charged with stealing £1m from the firm to gamble on the net.

London remains the hotbed for the highest value frauds. Over 80 per cent of frauds by value – £540 million – were committed in London and the South East.

However, London only accounted for 37 of the 123 frauds committed, indicating that fraud is widespread across the country but tends – with some significant exceptions – to be of lower value in the regions.

Jeremy Outen, partner at KPMG Forensic, said: “Unfortunately, fraud seems to be reaching new heights right now, although we can take some comfort from the fact that more cases are being successfully brought to court.

“Fraudsters are characterised by greed, determination and ingenuity. It is not easy to stop them – which is why companies need to keep on reviewing and refining their systems of controls, and as individuals we all need to take care in making sure that we know who we are dealing with when asked for personal information and data.”