Many people think of robbery with violence, murder, defamation, or even social injustice on the mention of the word crime. Well, that is not the only way crimes are done. Have you ever heard of situations where workers in a company conspired to something with the firm’s resources for personal financial benefits? Then you have an idea of white-collar crimes, in other words. White-collar crimes are schemes organized by a person or several people to reap financial gain where they did not sow.
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The most common white-collar crimes
Corporate fraud
These are illegal activities done by people or companies in an unethical manner. Some of these activities involve falsification of the business’s financial status. Showing that a company is doing well in terms of its expectation when it is really deteriorating. It is challenging to trace such kinds of crimes. A good example is insider trading. If you want to buy stocks in the stock market, it might be challenging for you to tell what company or broker you should use.
Extortion
These are crimes that involve a person coercing another or a company to give up money, property, or services so that they are protected. In most cases, people will use something that the public will not take positively to blackmail the victims. For example, you have had CEOs who have been blackmailed after they had secret affairs and didn’t want that to get into the public limelight.
Bankruptcy fraud
Bankruptcy fraud happens when an individual or a company with so much debt intentionally declares their bankruptcy. In most cases, the victim hides some of the assets they own or transfers ownership to other close family members so that their leaders don’t seize the property.
Ponzi schemes
Ponzi schemes are investment platforms that promise to pay high returns after a small investment with less or no risks. People don’t know that the schemes use new members’ investments to pay the old members. After some time, the schemes collapse, and all the investors lose their money. Pyramid schemes and multi-level marketing schemes also fall in this line.
Embezzlement
Embezzlement is when people who have authority in a company or business use their power to misappropriate funds. Even if an organization employs you as the chief finance officer, you have no right to spend the company’s finances to satisfy your personal needs. A good example is when you purchase a car using the organization’s finances, not for the company’s needs but for personal use. Most politicians also fall, culprits of this crime, when they use campaign funds for individual needs.
Tips for avoiding white-collar crimes in your business
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Screen your employees
One of the most common mistakes business owners make is hiring employees without proper screening. Who is your candidate and where have they worked before? What was the reason they quit in their former workplace?
Train your employees
Letting your employees what is not expected of them is one of the best approaches to avoiding white-collar crimes.
Invest in your network security
Never allow loopholes in your network system. Invest in the best IT system that you can access to ensure that you do not give malicious people a chance to commit their crime.
Have an internal audit function
Auditing is another suitable method to ensure that no crime happens behind the scene. Examining and evaluating the company’s statements makes sure that there is no chance for employees to misappropriate business funds.
Have zero tolerance for crime attempt
Never give a second chance to people who are found in the wrong. If they tried to commit a crime, they would do it again given a chance. Standing by this rule also instills fear in the employees and helps them stay away from anything that would be fraudulent.
Anonymous tip-offs
A wise business owner will want to listen to rumors going around their employees. If you get a tip-off that something wrong is going on, don’t assume it, but dig deeper to find out the truth.
Unfortunately, some businesses and companies have collapsed following the white-collar crimes. It would be best if you never forgot that a fraudulent person would never have a tag on the forehead telling you that they are dangerous to your business. Stay vigilant and use the above tips to avoid crime.
