Fraud and financial crimes are global phenomena. They run across all human races irrespective of their social and economic status. These crimes are forms of theft that transpire in a situation where assets like money or property are being used to gain a benefit from it. Maintaining a lifestyle beyond one’s means or poor investments are some of the factors of these illegal activities. It is highly driven by financial needs due to avarice, gambling, debts and business reversals, hence financial crime is rampant.
Typically, these involve some form of deceit, subterfuge or the abuse of a position of trust, which distinguishes them from common theft or robbery. Financial crime includes money laundering, bribery, embezzlement, fraud, tax evasion and foreign exchange malpractice and identity theft. Manipulating the accounting and financial records are the easiest and most sophisticated way to carry out these types of financial crimes
Fraud will continue to increase this year with the COVID-19 pandemic adding to the pressure according to a new survey by the Association of Certified Fraud Examiners. The report found out that an increase year on year comparison to the overall level of fraud wherein in November 2020 had 79 percent compared to August 2020 which had 77 percent and in May 2020 a record of 68 percent. A significant increase of 34 percent had been recorded in August and 25 percent in May. Thirty-eight percent of the respondents said that November record made a huge difference.
There are three top fraud schemes that increasing momentously according to anti-fraud professionals, these are cyber fraud, payment fraud and identity theft. The following breaks down and explains the different nature of financial crimes.
Bribery is the offer or acceptance of anything of value in exchange for influence and a favorable treatment of an official or employee. Bribes are always intended to influence or sway a decision or a process. It is often made to escape legal actions and avoid rules and regulations. Generally, bribes can take the form of gifts or payments of money. It can also be a property, privileges, services and favors.
To prove this crime, a written agreement is not necessary but a prosecutor generally must show corrupt intent. In a common scenario, the people involved can be both charged: the person offering the bribe and the person accepting it.
Swindle is an underrated word for a broader term of fraud, an act to lure someone over financial gains. In substance, it is the use of intentional deception for monetary or personal advantage. The purpose is to gain something of value, usually money, by misleading or deceiving someone with false statements, misrepresentations and deceitful conduct.
Identity theft, insurance, mail, credit/debit card, securities, telemarketing, wire and bankruptcy frauds and tax evasion are the common fraud offences. Thousands of people fall into this trap each year. Every year, fraud accounts for the global economy billions of dollars, those fraudsters that were caught were either serving jail time or hefty fines.
Embezzlement is most common in the employment and corporate fields. In general, embezzlement is appealing and attractive to a trusted person who has been given access to someone else’s property or money for the purposes of managing, monitoring, and/or using these assets of someone else or of the owner’s best interests. However, covertly misused the assets for his/her own personal advantage and use. They can be a bank teller or manager, store clerk, office manager or those financial managers that have direct access to your money / assets.
Obtaining personal or financial information of another person to use as their identity to commit fraud and use unauthorized transactions or purchases make a part of identity theft crime. It is committed in many different ways and its victims are usually left with damage to their credit, finances, and reputation.
One of the fastest-growing crimes in the nation which targets small or large scale groups by stealing its victims time, money and peace of mind is identity theft. Identity thieves often use the Internet but also can obtain sensitive personal data from trashcans and other unsecured locations.
Today, identity theft protection is a growing industry that keeps track of people’s credit reports and financial activity.
Money laundering is usually the root from illegal source to thwart tax officials. Criminal offences that involve movement of illegal money and other gains transferred to legitimate channels to cover its unlawful origin.
The money from criminal activity is considered to be “dirty” and the process of “laundering” makes it look clean. Criminals usually use a wide variety of money laundering techniques to make illegally obtained funds appear clean. They find an easier way to transfer and withdraw money without detection, using online banking and cryptocurrencies.
Racketeering is the act of acquiring a business through illegal activity, operating a business with illegally derived income, or using a business to commit illegal acts. These illegal businesses are known as “rackets.”
Illegal gambling, prostitution, drug trafficking, counterfeiting, embezzlement and extortion are examples of racketeering that constitutes criminal operations.
Securities and asset markets are the top variables of securities fraud. Illegal and unethical activities made in order to gain at the expense of others. It involves false statements on the company valuation and stocks valuation along with disclosure of confidential information where other people use this information in making financial and investment decisions.
Financial people hear this many times that ‘death and taxes are the only things constant in life’. Tax evasion is an illegal activity in which a person or entity deliberately avoids paying a true tax liability, which is punished severely and can lead to asset forfeiture or prison. Generally, a person is not considered to be guilty of tax evasion unless of failure to pay is deemed intentional. While tax evasion is illegal, tax avoidance is a legally accepted method in reducing taxpayer’s obligations.
Several decades ago up to this present time, fraud and financial crimes have been tagged as one of the pivotal issues in the global arena. As the year 2021 kick-in, criminals and the authorities continue to run with their cat and mouse play. Authorities are constantly finding new ways to track down and prevent financial crime with the aid of new processes and technology investments. On the other hand, criminals are always on the offensive side – researching new vulnerabilities and developing innovative tactics to stay ahead.
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