When most people think of white-collar crime, they think of Enron, Bernie Madoff, Martha Stewart or the father of the Ponzi Scheme – Charles Ponzi.
It is all relative.
While some crimes cost companies millions of dollars, some crimes can cause a small business thousands of dollars (which seem like millions to them).
White-collar crime includes lying, stealing or cheating in a business setting. In total these crimes cost the United States around $300 billion (yes that’s with a “b”) a year.
Internal Theft by Employees
Often, a small business has one person overseeing a certain department, this is fine usually, except for billing. A good example would be a single bookkeeper who has check signing ability, prepares the accounting and financial statements in addition to reconciling the books. Allowing one person to have that much authority could expose the company to potential money laundering schemes and embezzlement.
1. Have two signatures required on company checks to ensure that more than one person is aware of company disbursements.
2. Have an independent accountant perform audits without informing the bookkeeper.
Vendor Fraud
Vendors also commit white-collar crimes, usually various types of consumer fraud.
Here are a few common examples:
-Your company bought a bulk order of pens at a significantly lower price, but after delivery learns the pens are only half full of ink.
-Your company gives a deposit to a vendor for supplies but soon after rendering payment that vendor has packed up shop and left with your deposit, nowhere to be found.
To help prevent these types of fraud:
- Create an approved list of vendors that are tried and true.
- Have a policy in place where a new vendor needs to be approved..
- Do your own investigation –search the Better Business Bureau for their rating and any past issues.
If you liked this post, maybe you’ll like ways to secure your small business.
Thomas Ruskin 