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White Collar Crime: Is It Happening In Your Business?

White Collar Crimes

We probably know by now that criminals come in all shapes and sizes, as well as coming from across the class spectrum, such as it is. A suit-wearing desk worker could very well be engaging in crime, while wearing a suit and working at their desk. It may be a nonviolent crime, but it’s crime nonetheless. And it has serious effects on both your business and the economy at large.  The sort of crime we’re talking about here is known as white collar crime, involving the abuse of business and finance capabilities.

“But wait,” I hear you say. “This has nothing to do with me. All my employees are angels.”

Are you sure about that?

It’s essential that you get to know more about this oft-overlooked aspect of law. Being in the know will reduce the risk of you unwittingly allowing your business to get into trouble with the law! 

What crimes are we talking about, here? 

The most common crime in small businesses? Tax evasion via fraudulent bookkeeping. (There are other forms of tax evasion that take advantage of legal loopholes and are, thus, technically, legal.) This sees a business “cooking the books” to make it look either more or less profitable than it is, either to encourage investment (the former) or tax breaks (the latter). There’s also the retention of assets for the purpose of criminal conversion, which keeps the embezzlement lawyers busy. There’s also payroll fraud, which sees a business list an employee incorrectly in order to avoid paying them what they’re owed. Businesses may actually commit this crime inadvertently if they’re a little incompetent with their employee records! 

Investigated or accused? Here’s what to do 

They may be nonviolent, but white collar crimes aren’t generally looked upon lightly when compared to other crimes (although the argument could be made that corporations with strong ties to the government are more likely to get away with it!). But you need to remember that there are people out there serving whole-life sentences for these sorts of crimes! While jail isn’t that common, hefty fines and other business penalties are basically guaranteed. The agencies that investigate these crimes are not pushovers. We’re talking IRS, SEC, the U.S. Treasury, and even the FBI. So gather all the evidence that can help clear you, and remember to cooperate fully. Oh, and get a lawyer, of course. A good one. 

Employee monitoring 

If you’re an employer in a  financial or insurance business, then background checks on candidates are utterly essential. A lot of people hate the idea of running background checks, or having these checks run on them, but you need to remember how much may be at stake, here. Even if the employer is innocent of any crime, they may still get a rough ride if the courts rule that they were negligent during the hiring process. A background check won’t tell you everything, however, so it’s best to keep an eye on everyone your hire. You may not like the idea of rigid monitoring of employees, especially if your business is relatively small. We’re not saying you should get CCTV trained on every single employee at all times. But do make sure you work with trustworthy accountants who will keep an eye out for discrepancies or suspicious data.