Does organised fraud exist within the housing benefit and council tax benefit systems. And if so, how much is it costing the taxpayer. A tricky question! Most people when they consider Housing Benefit fraud will say "yes". They will then go on to tell you that landlords commit most housing benefit fraud.

There is no doubt that landlord fraud is higher than we would like and lower than we think. See Landlord Fraud Briefing. However, it is not the only type of organised fraud.

The first thing to establish is what is organised fraud. I would define organised fraud as a planned operation involving more than one person, covering more than one claim. More often than not, it will also include more than one benefit or service.

Over the last few years The Department of Social Security has consistently stated in their white papers and press releases its commitment to combat organised fraud. Certainly, the recent Sharif case has driven the department to work closer with, not only councils, but also other organisations that could be targets from the same crime syndicate.

Non-landlord related fraud could mean that an Organised Fraud Syndicate might well target both the council and the landlord. For example, the syndicate may well identify small landlords who do not have systems in place to reasonably control their properties. Often, these landlords will be running houses in multiple occupation (HMOs). In this way, the fraudsters can obtain the housing, never move in, claim the benefit and insist that it is paid directly to themselves and not the landlord. The tenant simply tells the landlord that the council has not sorted out his benefit yet. If the landlord has poor paperwork then it could take months for the landlord to legally evict the tenant. In the meantime, the fraudster pockets the money.

Other types of fraud involve members of a family living in each other’s houses. This establishes a complex web of ownership and tenants. This is seen as landlord fraud, but in reality it is "family fraud". Family fraud works within a framework of trust that exists within traditional values. The term "family" expands to include "extended-family". Almost all the successful crime cartels have been based on this kind of structure. From Italian Costa-nostra, through the British Kray Brothers, to the modern Sharif family. Rogue traders such as Nick Leeson are still rare and are more likely to appear in non-team or family related arenas such as stocks and bonds.

In order to be successful in organised crime it takes a team effort and that requires trust, however misplaced. So-called "Nigerian" fraud simply replaces the family structure with a TQM management structure.

Further type of organised fraud is where an elderly person is shuffled off to sheltered accommodation, while the family moves into the elderly person's home. Or the children who arrange for the sale of the elderly person's home and then try to launder the money. Usually trying to avoid the taxman as well as the Housing Benefit fraud inspector.

An example of family fraud was a case involving Mr Smith, a builder who owns several houses that he renovates and then lets. Mr Smith's girlfriend Ms Jones runs the letting agents. Mr Smith's daughter leaves school and claims from the Benefit Agency and Housing Benefit from the Local Authority. She does not list Mr Smith on her claim form and states that Ms Jones is her landlord. The council pays.

Mr Smith then transfers another property to Miss Smith. This property is in poor repair. Miss Smith claims a renovation grant from the council using her Benefit Agency benefits as evidence of being on a low income. Her father arranges the three quotes for the building work. His company not surprisingly wins the contract.

Another example is Mr Brown who after helping his parents buy their council house in Anytown moves his wife's elderly parents, Mr and Mrs Cooper into his home in Anothertown. He helps them fill in the housing benefit form not declaring the relationship. They put their name on the housing waiting list. Mr Brown later evicts his parents who turn up homeless at the council. The council places the couple into temporary accommodation and eventually council housing. Mr Brown in the meantime moves his brother-in-law and sister-in-law, Mr and Mrs Cooper into his home where they claim housing benefit not declaring the relationship. Later Mr Brown moves his wife's brother and sister-in-law in with the parents-in-law, making them under accommodated. The brother & sister-in-law then apply for council housing and Mr Brown moves his sister and husband, Mr and Mrs Thomas into his home.

Without a doubt Verification Framework will help in making some of these crimes difficult. Checking the ownership of every property will be important and cross-referencing systems for the same names appearing. In the first example the fraud was discovered because the organisation cross-referenced renovation grants with housing benefit. In the second example, the fraud would be discovered if the council checked the previous address and simply inquired through the VF process about what happened to the parents’ old address and why they had moved to Anothertown. Cross-referencing the housing waiting list against housing benefit would also help.

Always ask elderly people what has happened to their homes. Check with your legal for "right to buy" or "tenants incentive" enquiries.