Across the globe, there has been an unprecedented rise in the number of new business ventures because of declining employment rates. People have been saving money and taking loans to launch their startups.
But, there has been a proportional increase in corporate crimes as well, and there can be many reasons why people are drawing towards what we call white-collar crimes.
The term crime often implies gory images of hapless bodies and blatant cruelty. But, corporate crimes, or commonly known as white-collar crimes, are much less visible, but they can be as damaging.
Therefore, if you are looking to start a business, you must be aware of the most common business crimes so that you can watch out for the black sheep in your setup.
1 Corporate Frauds:
Corporate fraud revolve around misreporting of the financial situation of your company to evade some financial responsibilities and generate unearned profits.
Let us take an example; Suppose the CEO of a company bribes the accounting department to include bogus entries in the register to fake boost the profits of the company. This way, business appears more profitable than reality. It is a crime and can have significant impacts on the company.
These activities are challenging to detect because they start slowly and are not meant to linger on forever. However, they are often detected by whistleblowers, or otherwise, with more magnitude, it gets challenging to bridge the gap between pretense and reality.
There exist some innocent people who get trapped as scapegoats in complex business schemes, and they must look to hire Tampa criminal defense lawyer to protect their rights and hopefully clear their name.
Kickbacks are different from extortion because the amount of money or goods is negotiated beforehand by the involved parties. It is a mutually agreed agreement where all interested parties gain benefits from some illegal practice.
For example, a drug representative goes to sell his pharmaceutical company’s product to a prescribing doctor and offers the doctor to sponsor a vacation or a dinner for him and his family. On a quid pro quo basis, the doctor has to prescribe the drugs of that pharmaceutical company.
Embezzlement is the inappropriate usage of the employer’s finances such that it causes loss to the employer and profit to the employee. Embezzlement is simple to understand because it is quite similar to theft or robbery.
For example, an employer assigns an employee a task to manage his finances efficiently. But, he uses that money to swell up his bank accounts secretively and cover its tracks by creating a fake money trail. Hence, the employee has embezzled money from his employer.
Extortion is often represented in different movies where gangsters coerce and blackmail departmental store owners to pay them what they call ‘protection money’ under the fear of physical threats.
5 Ponzi Schemes:
Named after the famous con man Charles Ponzi, Ponzi schemes promise high profits against minimal risk and involve paying the older investors by the money of new investors. The scheme becomes a non-starter when new investors diminish, and this way, most of the funds of old investors go down the drain.
6 Bankruptcy fraud:
Bankruptcy is typically declared to admit the inability to pay off huge debts of creditors. But, fraudulent elements sneak in when the supposedly bankrupt company try to conceal assets after declaring bankruptcy so that they can be saved from the creditors.
Lastly, if you are running a successful business or starting a new one, look out for these potential frauds because these white-collar criminals may be lurking around in your workplace.
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