Corporate fraud is a complex area of law. Here’s what you need to know about corporate fraud crime, along with answers to the most commonly asked questions.
No business, no matter how large or small, is exempt from the risk of corporate fraud. Crimes in this category happen on both large and small scales and can involve either an individual or a group of people participating in fraudulent activities on the business level. Corporate fraud involves various criminal acts such as falsifying records, misuse of company property and insider trading.
The incarceration rate of prosecutions against corporate fraud has steadily increased over the past few years. The latest data from the IRS claims a 97 percent incarceration rate in corporate fraud cases. Being accused of this type of white collar crime can have a serious, permanent impact on your future. If you’ve been involved in an act of corporate fraud, or suspect that someone else has, federal criminal defense lawyers at the Broden & Mickelsen, LLP in Dallas explain what you need to know.
Corporate Fraud Statistics
On any given day, you’ll likely find at least one headline about a major corporate fraud case. This plays a big part in the reason why most people associate corporate fraud with crimes that occur on a large scale and involve significant amounts of money. When we take a look at corporate fraud statistics, the picture that we are given looks entirely different from that initial impression.
According to one report, private companies and small businesses have the highest level of occupational fraud cases, costing them a median loss of $164,000. For smaller operations, the prime contributing factor to fraud is a lack of internal controls.
A 2018 study on global occupational and corporate fraud looked at data from 125 countries and determined that small businesses with fewer than 100 employees lost twice as much to corporate fraud than larger companies. This data tells us that while we may look at larger corporations as the primary contributor to fraud, an overwhelming number of cases are happening in small and medium-sized businesses.
This also means that the average person, working in a small business setting, is at risk of being exposed to or approached about participating in an occupational or corporate fraud scheme. The average person might not be fully aware of the scope of corporate fraud, the severity of the crime or the possible penalties.
Anyone who commits these acts is putting themselves and possibly their coworkers at risk of facing criminal charges. To help you better understand corporate fraud, here are the answers to a few of the most common questions about business-related acts of fraud.
Common Questions About Corporate Fraud
Because the scope of these types of crimes is so expansive, there are plenty of misconceptions about corporate fraud. These misconceptions can place a person in the position of committing an unlawful act without even realizing it. To help clear up these misconceptions about this common white-collar crime in Texas, here are the answers to some of the most common questions about corporate fraud.
What Is Corporate Fraud?
This is the most basic question, but one that we often see an inaccurate answer given. Corporate fraud can be defined as any fraudulent act by or against a business for the purpose of deception and financial gain. Corporate fraud can include crimes of seemingly minor monetary value or ones that involve millions of dollars. The amount of money involved factors into how the crime is charged, but even small scale fraudulent acts can be prosecuted.
What Is the Motivation Behind Corporate Fraud?
The simplest answer to this is money. Businesses may falsify records for tax purposes or to make their operations appear more successful than they actually are in reality. Employees may participate in fraudulent activities in order to secure their own financial wellbeing through bribes, bonuses or individual acts of fraud.
Who Commits Corporate Fraud?
Surprisingly, it isn’t always the higher-up executives in a company that are directly involved in corporate fraud. Fraud occurs at all levels of a business operation and those who make less money may feel additional financial pressure to perform or take part in fraudulent activities. Corporate fraud that does involve upper management typically involves a greater sum of money.
What Are the Penalties for Corporate Fraud?
Depending on the type of criminal activity and the amount of money involved, acts of corporate fraud may be charged as a misdemeanor, but in most cases they are charged as a felony. Some acts of corporate fraud are against federal law as well. The penalty that will be issued if convicted of this type of fraud will depend significantly on these factors, as well as past criminal history. Penalties may include restitution, significant fines and incarceration.
Should You Contact a Dallas Criminal Corporate Fraud Defense Attorney?
If you’ve been accused or are suspected of corporate fraud, it’s best to not speak to the authorities or any other person involved in the situation until you’ve had the chance to speak with a Dallas criminal corporate fraud defense attorney. Anything that you say in a corporate fraud investigation can later be used as incriminating evidence against you. An experienced defense attorney in Dallas at Broden & Mickelsen, LLP can advise you on how to proceed and will be there to defend your freedom along the way.
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Prior results cannot and do not guarantee or predict a similar outcome with respect to any future case.
Sources:
- https://www.irs.gov/compliance/criminal-investigation/statistical-data-corporate-fraud
- https://businessfraudprevention.org/fraud-statistics/
- https://www.acfe.com/report-to-the-nations/2018/docs/2018-RTTN-Key-Findings.pdf
