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What are the different kinds of business fraud?

On Behalf of | Jan 4, 2023 | White Collar Crimes

White-collar crime is unfortunately all too common in Vista, California and San Diego County. If you are running a business, you should be aware of some of the most common white collar crimes including different kinds of fraud. This will undoubtedly help you if you become a victim of such crimes or are someday accused of committing one yourself.

What Are the Major Types of Business Fraud?

Fraud is a crime in which someone deceives, withholds facts or obfuscates to cause monetary harm to another party intentionally. As such, this definition casts a wide blanket that covers a huge amount of criminal activity. Some of the major types of business fraud include:

  • Identity theft
  • Tax fraud
  • Cash and non-cash misappropriation
  • Financial statement fraud
  • Payroll fraud
  • Corruption

What Is Cash and Non-Cash Misappropriation?

Some of these crimes, such as identity theft and tax fraud, may be familiar to most laypeople. However, something you may not have heard of before is cash and non-cash misappropriation. Sometimes, both these crimes are categorized as “asset misappropriation.”

Cash misappropriation is using fraudulent activities to steal cash from the company. An example would be using a company credit card to make non-approved purchases. Non-cash misappropriation involves fraud to steal physical assets such as machinery, equipment, products, parts, raw materials or more.

What Is Payroll Fraud and Financial Statement Fraud?

Payroll fraud occurs when an employee or hacker accesses a company’s payroll system and produces a paycheck for fraudulent activity instead of labor or something else approved by the company. Financial statement fraud occurs when the numbers on a financial statement are altered to make the company seem more valuable than it is. This can be done to secure a loan quickly.

What Is Corruption?

Finally, corruption describes a wide array of different kinds of business fraud such as money laundering, taking bribes, election tampering, business embezzlement and working with organized crime. In many cases of corruption, the business owner may be in on the crime instead of the victim.

Overall, if you are a business owner in San Diego County, you should know the different kinds of business fraud. This could be vital information to help prevent your company from being victimized or unwittingly running afoul of the law yourself. In most cases, ignorance that a certain kind of fraud was illegal is not a defense.