Business Fraud Explained
Business Fraud can involve a number of commissions or omissions by a company and its employees. This can involve any the following instances described in this article.
Account takeover involves identity theft where the online credentials of a company are stolen by malware. Criminals can start a fraudulent banking activity, and a corporate account takeover involves the compromised identity credentials.
Another fraudulent activity that can happen is where a fraudster opens an account using stolen or fake documents in another person’s name. The account can be anything from a phone contract, a credit card account, or even a mortgage. This is something that happens when your identity has been stolen.
Fraudulent activity can also happen as a result of bankruptcy and insolvency. Especially when a company engages in business after they have been declared bankrupt. A Phoenix Company is when a new company is formed after another declares bankruptcy; it has the same directors and they try to avoid the liabilities of the former company since these are now two very different entities.
Fraudulent activity also involves a company illegally trading while it has been disqualified or suspended from trading. A bankruptcy describes a person’s financial status and the victim of such frauds seem to be companies that have lent money or given credit to someone who is bankrupt.
Betting frauds happen when someone makes an offer for inside information or a foolproof system that will guarantee you a profit from gambling. Betting fraudsters will offer people inside information that focuses on horse racing but it can also involve another sport. One can receive a glossy brochure that introduces you to an insider in horse-racing, and this is a person who will provide you with regular information that improves your chances of winning on your bets. The people who perpetuate these scams claim that they cannot place bets because they are too well known to bookmakers. This is the reason why they are willing to sell the confidential information.
False accounting is another form of business fraud and it involves employees in an organization altering or destroying any account. It also involves presenting accounts from an organization or individual such that they do not reflect the true value or the financial activities of the company. False accounting is done for a number of reasons, and they include obtaining additional finances from banks in order to inflate the share price and report inflated profits or to hide losses.