Small Business Fraud

Small Business Fraud

Financial fraud is a big problem for small businesses. Small companies tend to lose almost twice as much money from each occurrence of fraud, compared to comparable incidents at medium-sized and large corporations, according to a recent study.

Recovering from fraud can be a long and stressful process, but with the right approach – and the right assistance – small business owners can bounce back successfully while taking steps to ensure the fraudsters are identified and held accountable.

Prime Bank Fraud

Prime Bank Fraud

Red flags for potential investment fraud in "Prime Bank" programs include claims of “risk free” returns as high as 40 percent in a short-term offering. Investors are often pressured to commit funds immediately, before conducting appropriate due diligence.

Promoters may falsely claim the securities are backed by major banks or international finance organizations such as the World Bank, Federal Reserve, International Monetary Fund, or the International Chamber of Commerce.

Advance Fee Scams

Advance Fee Scams

So-called "advance fee" scams are prevalent on the internet. They are also known as “419” scams, in reference to the relevant section of the criminal code in Nigeria where many of these schemes originate.

Fraudsters solicit victims by promising to share a large sum of money, in return for a small up-front payment. The initial payment might be described as a tax or administrative fee. Rather than releasing a large inheritance, payment of the advance fee will only lead to elaborate excuses and more demands.

Shell Games

Shell Games

Fraud schemes that launder money through complex webs of corporate shells make it more difficult – but not impossible – for investigators and tax officials to trace the flow of funds.

Diligent investigation of corporate affiliations and business interests is a critial component of comprehensive asset searches in cases of investment and securities fraud. Shutting down the ‘shell game’ is important for fraud victims seeking restitution and financial recovery.

Corporate Fraud Playbook

Corporate Fraud Playbook

If there are signs of potential corporate fraud, management must take steps to confirm whether there is actual proof of wrongdoing, determine the identities of all people involved, and obtain a full and clear understanding the scheme.

Retaining an independent investigative agency to conduct a fraud investigation is important if there are suspicions of financial improprieties by top executives, or potential collusion with security, compliance, or accounting personnel.

Forex Fraud

Forex Fraud

Skepticism and professional scrutiny should be given to any retail broker who promises their foreign exchange (forex) trading program will deliver easy or guaranteed profits.

Trading foreign currencies is a high-risk activity with a heavy loss rate for new investors, particularly if trading on margin with significant leverage.

If an investment opportunity involving foreign currencies sounds too good to be true, it may be a form of forex fraud.

Affinity Fraud

Affinity Fraud

Perpetrators of affinity frauds seek to manipulate and leverage the high level of trust among tight-knit and insular communities, using word-of-mouth referrals to recruit members into pyramid schemes and similar investment frauds.

Successful investigation requires sensitivity to the painful social aspects of these crimes, including the real possibility that shame and embarrassment can prevent victims and witnesses from stepping forward.

Pump and Dump: Crypto Coins & Penny Stocks

Pump and Dump: Crypto Coins & Penny Stocks

In a pump-and-dump scheme, unscrupulous promoters “pump” a cryptocurrency or company stock by making sales pitches to private investors with false and misleading statements about potential returns. The value of the alt coin or company stock increases as more and more shares are sold to unsuspecting victims, but the price crashes as soon as the insiders sell their shares.

Precious Metals Fraud

Precious Metals Fraud

Precious metals are promoted as an alternative market that can occasionally outperform traditional investments. Unsolicited pitches from “metal dealers” and “metal merchants” may describe enticing opportunities to earn a great deal of money by buying and trading gold, silver, palladium, platinum and rare earth metals. Yet promises of easy profits in precious metals are a red flag for investment fraud.

Ponzi Schemes

Ponzi Schemes

The size and ambition this classic fraud scheme has grown considerably since Charles Ponzi pioneered the technique during the decade before the Great Depression. The most notorious contemporary example is Bernie Madoff, whose massive fraud ran smoothly for decades until collapsing in 2008. There have been many perpetrators of Ponzi schemes whose names have not made headlines – and whose frauds are still active and attracting new victims.