Web Analytics

Common Business Crimes to Avoid

Business crimes have become so common nowadays. They represent any form of embezzlement or violation of trust. Normally, such acts have adverse impacts on any business – from prolonged and costly scrutiny to notable damage of reputation and monetary losses.

In other cases, such crimes can make you close down your business or company.

Business Crimes

Crime assessment and having the right security preventative measures in place, and hiring an employment lawyer to deal with the business crime related to employment, can save your business from business crimes damages.

Are you wondering what’s the best way to prevent such crimes? Well, the first step is to know some of the crimes that can occur within your organization. Read on to learn some common business crimes that you should strive to avoid.

5 Common Business Crimes

Huge organizations such as the Enron Corporation have gone bankrupt and others closed operations thanks to white-collar crimes. Here is an overview of 5 common business crimes that can render your company bankrupt or leave it with huge losses and a bad reputation.

See also  Types of Incentive Schemes

1. Fraud

Fraud is one of the leading business crimes in the world. The fact that there are diverse types of fraud makes this crime highly probable to occur in any organization, big or small. Some common forms of fraud to watch out for in your organization include corporate fraud, insurance fraud, securities fraud, and Ponzi schemes.

Bernie Madoff is known for one of the historic Ponzi schemes there has ever been. Such schemes involved the collection of money from investors to fund briefcase companies on the promise of high returns from the invested capital.

However, the scammers pay only a small number of older investors using money that is gathered from the new investors.

2. Tax Evasion

It is true that no business owner enjoys paying taxes. Given that is a government requirement, failing to pay your business taxes as required can get you into lengthy and costly lawsuits. However, over the years, numerous businesses have devised ways to avoid tax remittance.

Some organizations commit this crime through falsified tax returns or providing incorrect information about a company’s taxable assets. In other cases, managers and business owners plan to avoid paying the taxes altogether.

If your accounts or finance managers do not pay taxes as required, you risk your business’s closure or losses and costly lawsuits.

See also  How do You Monitor Staff Training Needs?

3. Bribery

Bribes are now used by businesses and individuals as a stepping stone to grow. With business individuals willing to do anything to achieve certain organizational milestones, bribes are becoming a common crime among businesses.

In most cases, bribes are offered for shady deals. Most bribes are branded with different names to create the impression of a normal business deal.

For example, kickback is a common term used to refer to a bribe where the individuals cooperate in the act. In 2013, William Rapfogel was fired from his job for allegedly receiving an insurance broker’s kickbacks. Offering or receiving bribes in favor of a business proposition or request is illegal.

4. Embezzlement of Funds

Embezzlement of funds is the process of illegally taking money from a person or a business entity. Business associations and employees are the major perpetrators of this business crime.

Often, the availability of certain loopholes in how your business operates and/or handles cash can create an avenue for misuse or theft of company funds. It is important to use your investors’ funds carefully because any misuse makes your company liable for an embezzlement crime.

5. Money Laundering

Money laundering is an age-old business crime. Business individuals engaging in illegal businesses try to legitimize their money through laundering. Companies present money from such trades as their earnings. Often, funds collected from money laundering are used in illegal activities such as funding terror activities.

Measures to Avoid Common Business Crimes

Now that you are aware of the common business crimes, the next question should be how to prevent them.

See also  Hiring A Lawyer For Company Investigations

The following are a few tips to help you avoid these crimes:

  • Adopt effective verification measures to deter fraud and related crimes
  • Always monitor the activities of your employees for any weird behavior
  • Engage a reliable law firm for guidance on business crimes
  • Invest in reliable technology to detect and deter online activities that might lead to certain business crimes
  • Hold regular training sessions on business crimes to equip team members with the right skills and knowledge to detect and prevent behaviors that might lead to such crimes

Bottom Line

Over recent years, the rate of business crimes has become high. Your business is at risk of any of these white-collar crimes – from bribery, money laundering, to tax evasion.

Often, your employees are some of the key sources of business crimes. Nevertheless, having the right measures in place including engaging a reliable law firm can save your business a lot in terms of litigation fees, monetary loss, and business reputation. Get in touch with HKM Employment Attorneys for legal representation and advice in all issues around employment


About Sonia Kukreja

I am a mother of a lovely kid, and an avid fan technology, computing and management related topics. I hold a degree in MBA from well known management college in India. After completing my post graduation I thought to start a website where I can share management related concepts with rest of the people.