Corporate Fraud

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If you’ve been accused of corporate fraud, we understand that it will be a distressing time for you and those close to you. However, it’s important to remain calm and consider your next steps very carefully.

What is corporate fraud?

Corporate fraud, sometimes called business fraud, is any fraud that has been committed against or involving a business. This type of fraud comes in a variety of forms and ranges in scale. Some people have even fraudulently obtained billions from companies prior to being caught.

What are the types of corporate fraud?

Pyramid schemes

A pyramid scheme is a business model that recruits staff members with false promises (usually in the form of payment) to recruit others into the scheme. This quickly becomes impossible to sustain as members are unable to profit. Anyone who joins a pyramid scheme usually has to pay an upfront payment, and is promised that they will make this, and more, back within a certain amount of time.

Pyramid schemes get their name from the pyramid shape of the ‘businesses’ hierarchy. Money travels up the pyramid to the person at the top from those below. By convincing those lower down to part with their money with false promises, the person at the top profits from their loss.

Payment fraud

This type of fraud involves falsely creating or diverting payments for financial gain. Examples of corporate payment fraud include generating false payments, making fraudulent payments and intercepting payee and cheque details.

Bankruptcy fraud

Bankruptcy fraud often takes place prior to the bankruptcy of a company and occurs when the directors of that business transfer assets from the failing company to a new one, avoiding paying debts accrued at the same time.

Asset misappropriation

This type of fraud involves third parties or employees of a company fraudulently using their position to take money from the business. This may involve directors, board members or bookkeepers.

How to avoid becoming a victim of corporate fraud

To avoid becoming a victim of corporate fraud, it’s important to always remain alert at all times. If you’re a small business owner and you notice something doesn’t quite add up regarding payroll, speak to the person responsible.

When hiring new staff members, make sure you always go through the company hiring policies, even if you know the candidate personally. If you’re hiring a staff member that will be in a position of trust, i.e. a bookkeeper, you want to ensure that they have a good amount of experience, and always get references from their previous employers.

If you are looking for work, avoid any ‘business opportunities’ that involve an upfront payment, as the chances of you seeing a return are probably minimal.

What to do if you’ve been accused of corporate fraud

If you’ve been accused of corporate fraud, even if you’re not guilty, it’s important that you seek legal advice and representation as soon as possible.

Here at DPP Law, we’re experts in these types of cases, so contact us today to discuss your next steps.

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