Corporate fraud is on the rise even though many cases still go unreported, according to a leading corporate crime investigator. In the third quarter of this year 2,650 cases of fraud in Hong Kong were reported to the Commercial Crime Bureau, of which 17 were considered 'major' fraud cases, according to Paul MacKellar, head of Arthur Andersen's regional business fraud and investigation services. He said the figures marked a 30 per cent increase on the previous quarter, during which 2,032 fraud cases were reported, including 14 cases of major fraud. 'Many commercial crimes are largely unreported. It is estimated that only about 10 per cent of crime is reported to the police,' Mr MacKellar said. 'According to figures from the United States, almost 6 per cent of a company's turnover is lost to commercial crime, such as corruption and fraud. But some countries have a much higher figure - which can be up to 10 per cent to 15 per cent of a company's turnover.' Mr MacKellar said all commercial crimes had the potential to damage a company, but money laundering was a significant problem because it could suggest a link to terrorism and triad activities. 'Money laundering may link to trafficking and other serious crimes,' he said. Companies were even more susceptible to commercial crime during an economic downturn, Mr MacKellar said. 'Commercial fraud is like the rocks in the river bed. When the economy is good, the ship can go through the river. But when the recession is here [and there is not enough water in the river], the ship gets hit.' Mr MacKellar, a former detective-superintendent in the Australian Federal Police, took over as head of Arthur Andersen's regional commercial crimes unit at the beginning of the month. He said commercial fraud investigation was a growing business and he expected to expand the unit's staff from 45 at present to between 200 and 300 within a few years.