White Collar Crimes Your Business Can Avoid

What are the common business crimes your company should avoid?

In this article, we provide an overview of white-collar criminal activity every company needs to prevent, including fraud, Ponzi schemes, embezzlement, and identity theft.

Although business crimes are non-violent, in the physical sense, i.e., no harm comes to persons, the activity can, at worst, destroy your business and, at best, damage its reputation.

Did you know a single action by one of your employees could expose your business to liability?

It’s scary stuff, so never underestimate the value of legal counsel. If your company hasn’t got an attorney on retainer, maybe now is the time to do so, as their services are much like having insurance: They are there when you need them.

Additionally, an experienced attorney should be part of your team of experts in designing and implementing a risk mitigation plan to avoid internal criminal activity.

In addition to legal counsel, implement a compliance program and ensure everyone in the company adheres to it. Educate your employees on issues such as ethics and white-collar crimes. This will help them avoid committing crimes such as:

Ponzi Schemes

Ponzi schemes typically involve fraudulent investment programs where the organizers promise mouth-watering returns to their investors. The organizers then use the invested funds to pay earlier investors, and the cycle continues until it finally crumbles.

Eventually, the organizers will run out of new investors, or the old investors will decide to cash out, and the scheme will crumble.

Money Fraud

Since a lot of counterfeit money is in circulation, it is likely that the fake bills will eventually find their way to your business. What do you do if this happens and you realize that you have counterfeit bills? If you report it to the relevant authorities, the government will not replace the counterfeit bills with open accounts.

You can either absorb the losses or recoup the losses via insurance. The latter only applies if you have an insurance policy that covers the receipt of counterfeit bills. You can avoid losses by training your employees to identify counterfeit bills. You should also train them on handling customers who pay using such accounts, how to handle the bills, and who to contact.

Embezzlement

Employees who embezzle funds from a company rarely fit the description of a criminal. Like any other employee, they are silently milking the company dry. It typically begins with minor charges, and they continue when the trusted employees realize that no one noticed.

More often than not, it involves personal financial distress, and the trusted employee embezzles to maintain a lifestyle. It’s also fueled by economic greed, employee disenfranchisement, or employees feeling that they deserve better compensation.

The idea is that they borrow funds for use now and return them later. Sounds innocent, right? It’s not because they begin cooking books to cover their tracks and continue “borrowing” more.

For small businesses, embezzlement can cause a significant setback as the employees behind this are often family members or friends. Anything involving family, friends, and money is always complicated; thus, you might want to hire an experienced attorney.

Bribery

Bribery is often used to influence the decisions or actions of others by gifting them something of value for something else of value. For example, you can poach an employee from a rival company by bribing them to work for you.

You can also offer something valuable, such as season tickets, to a public official in return for a favor. It can also involve bribery of a foreign official to get a contract to conduct business in a foreign country. This is quite common, but it doesn’t mean these actions have no consequences.

Individuals suspected of bribery can face civil and criminal charges, resulting in prison terms or hefty fines.

Identity Theft

Identity theft affects individuals, but it can also affect a business. This applies in situations where criminals impersonate a company’s professionals to gain their prospective victims’ trust. The criminals later commit fraud, and since the criminals have been identified as representatives of your company, the victims will blame your company.

If you’ve not got a robust IT security plan, don’t delay; get cybercrime experts on it immediately. What will harm your business reputation instantly is weak security measures to block unwanted access to your tech systems and customer data.

Environmental Crimes

Environmental crimes are typically committed by businesses, companies, factories, etc. They come in different forms, such as dumping waste in aquifers or rivers. Factories are allowed to dump trash in rivers but in a controlled way. However, not all factories follow the regulations and instead dump waste uncontrollably.

In such a scenario, people along the river can begin to fall ill due to contaminated water. These people can file an environmental lawsuit, especially if they have evidence that your company is contaminating the water.

Summing Up

All businesses are vulnerable to business crimes; thus, the best alternative is to devise ways to prevent these crimes. It might sound boring and tedious, but you’ll enjoy it more than paying hefty fines or serving a prison sentence. Implementing prevention measures is less risky and cheaper than sitting back and hoping nothing happens.