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What is corporate fraud?

White-collar crimes are crimes committed to gain assets, either financial or otherwise. The idea is that the person committing the crime obtains assets without losing any in the process. Some people use white-collar fraud to secure advantages in business that they otherwise would not have.

Corporate fraud is one of many white-collar crimes. The Federal Bureau of Investigation deals with white-collar crimes because they can lead to significant losses for investors and can cause damage to the economy of the United States. Most of these cases involve deceiving investors, analysts and auditors. The real value of a company or the reality of how it operates is falsified for the benefit of those working there or those running the company.

Some examples of this kind of fraud include faking accounting entries, making illicit transactions to evade oversight by regulators (this could include selling merchandise on the black market) or inflating profits or hiding losses, so investors have faith in a company that isn't doing what it says it is.

Other issues might include self-dealing by corporate insiders. This means that by giving someone information on a company's stocks or sales ahead of publication, that person is in a position to earn kickbacks or to gain financially on the stock market or in other ways. Misusing corporate property for personal gain is another kind of crime that the FBI looks into.

It's important to know that if you're accused of this kind of crime, it's imperative that you have a defense ready as soon as possible. Even if the allegations are false, it's easy for others to make up stories to come to the incorrect conclusions. Your best chance is to address concerns with a strong defense full of facts and proof of your innocence or lack of knowledge about fraudulent dealing.

Source: Federal Bureau of Investigation, "White-Collar Crime," accessed Sep. 23, 2016

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