5 Jan 2023


Financial Fraud: The Business Crime You Need to Know About

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Business crimes refers to crimes committed for financial gain. It is also known as corporate, economic, and financial crime. Examples of business crimes include money laundering, insider trading, forgery, identity theft, embezzlement, copyright infringement, Ponzi schemes, counterfeiting, blackmail, bribery, cybercrime, and fraud bank. Business crimes are non-violent and are committed through dishonest practices. Normally, business personnel who have access to huge amounts of money or those involved in unlawful businesses are the ones who commit these crimes. The committers of business crimes often hold decent positions in their businesses or communities until their unlawful activities are exposed. The laws governing business crimes are dependent on the nature of crimes executed ( Hopkins & Gill, 2017). This paper seeks to discuss the business crime involving financial fraud. 

Financial Fraud 

Fraud involves several different acts of deliberate misleading a person for financial gain or some other right such as property. There are different types of financial fraud including investment fraud that involves individuals deceiving other investors in giving them money for an investment that may not exist or may be an identity theft. The second type involves vendor supplier fraud that involves individuals or organizations overcharging the business that the sell or goods may not be shipped even if the payment has been made already. The third type is the management fraud that involves the management team of a company distorting the financial information to the people depending on that information. The fourth example is customer fraud whereby customers may attempt to defraud sellers into giving them something they are not supposed to have. The fifth type include either employee embezzlement fraud that involves an employee stealing money or items of value from their employers directly or indirectly (Burnes et al., 2017). 

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Recently, there have been numerous alleged fraud and fraud charges, in the headlines. An example involves the case of Elizabeth Homes who was charged in March 2018 for massive fraud. Elizabeth committed investment fraud by luring investors such as James Mattis and Henry Kissinger and a partnership with Walgreen’s into investing with Theranos. Elizabeth promised to bring evolution to the field of medicine with new technology. However, it was discovered that Elizabeth conducted her experiments using the technology of other companies while stating it was the work of Theranos. SEC charged Elizabeth for dishonesty about make over $700 million for Theranos in external investments. Elizabeth paid a fine of $500, 000 and commended to hand over more than 19 million shares of the company. In addition, Elizabeth was prohibited from being an officer in any public company for 10 years. At the age of 19, Elizabeth established Theranos Company but her success came crumbling down after being charged with “massive fraud” in March (Michaels, 2018). 

Financial fraud is a grave business crime associated with serious punishment as well as fines, which are issued to perpetrators. It is a common crime with several levels, which vary enormously. For instance, there exists cases, where companies can lose billions of dollars and become bankrupt. There are also cases, where at least one individual or a group of fraudsters goes to prison. Like in the case of Elizabeth Holmes, she was fined a huge amount of money, she was commanded by the caught to hand over her company’s shares, and she was prohibited from holding any position in the public company (Burnes et al., 2017). These are some of the applicable penalties given to a person if convicted of financial fraud crimes. 


It is evident that financial fraud is a serious crime and thus it is important for one to protect themselves from being victims of fraudsters. The prevention tips to help people from becoming victims of financial fraud crime include get the company’s details including address and phone number, ask for professional license number, obtain a written validation notice, and check receipts regularly against the bank statements. Therefore, prevention of financial fraud would help to address these crimes. 


Burnes, D., Henderson Jr, C. R., Sheppard, C., Zhao, R., Pillemer, K., & Lachs, M. S. (2017). Prevalence of financial fraud and scams among older adults in the United States: A systematic review and meta-analysis.  American journal of public health 107 (8), e13-e21. 

Hopkins, M., & Gill, M. (2017). Business, crime and crime prevention.  Handbook of crime prevention and community safety , 373. 

Michaels, M. (2018). Finance, The most memorable and expensive financial fraud cases of all time. Business Insider . Retrieved from: https://www.pulselive.co.ke/bi/finance/the-most-memorable-and-expensive-financial-fraud-cases-of-all-time-id8297568.html 

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StudyBounty. (2023, September 16). Financial Fraud: The Business Crime You Need to Know About.


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