Financial crime occurs all around the world every single day, and if you aren’t careful, your business could fall victim to any number of financial crimes. Because of the prevalence of financial crime in the world of business and the potential repercussions, business owners need to be aware of their risk level and take steps to protect their companies.
Below is a list of three of the most common financial crimes you need to be aware of in business:
Fraud
Fraud is one of the most common financial crimes because it can take on so many different forms. When someone commits fraud, they are willfully deceptive in their intent and actions.
Fraudulent advertising, fraudulent representation to a client or business partner, and fraudulent revenue reporting are all examples of fraud crimes that can lead to big trouble for perpetrators. Your business should take all available steps to reduce the potential for fraud, and if fraud is found in your business, it needs to be addressed immediately.
Money Laundering
Money laundering is the act of transferring money from one entity to another so that it can be transferred back to the source without appearing to have come from the source. In a sense, this “cleans” the funds of original ownership and makes it difficult to track the origin of funds.
Money laundering is often used to circumvent financial regulations, tax obligations, and donation restrictions. If you form any kind of business partnership, it would be wise to scrutinize the money handling of business partners to make sure your company isn’t unwittingly involved in a money laundering scheme.
Political Corruption
Although technically not a financial crime in and of itself, political corruption often goes hand-in-hand with financial crime. Politically-exposed persons (PEPs) are often the target of corruption efforts due to their positions of power. For more information on screening for PEP, visit the website.
Screening for PEP risk is a good idea if you plan to enter into a joint effort with any type of public figure. Screening for PEP risk can reduce the chances for your business to get dragged into a financially compromising situation, and it also reduces the potential for harm to your business’ reputation.
Read a similar article about compliance for crypto companies here at this page.