Cost of fraud in global stimulus spending estimated at $500 billion

About $500 billion of the money being spent worldwide to stimulate economies could end up being wasted because of fraud and corruption, according to a report by risk-consulting firm Kroll.

The report coincides with remarks made this month by FBI Director Robert Mueller that fraud related to Troubled Asset Relief Program funds and the U.S. stimulus package has the potential to create the "next wave" of public corruption cases.

Kroll estimates that corruption can raise procurement contract costs by at least 10 percent even in a stable economy, or an equivalent of $500 billion as governments worldwide spend about $5 trillion to stimulate their economies.

Such spending is a once-in-a-generation opportunity for fraudsters to cut themselves a piece of the pie, Kroll said.

"Federal and state agencies controlling the distribution of these funds need to enhance their already stretched resources to oversee and enforce robust anti-corruption policies," said Blake Coppotelli, senior managing director in Kroll's business intelligence and investigations practice.