Financial crimes have been some of the most important and pivotal issues for several decades. The rise of the internet and technology have exacerbated the situation, with criminals becoming even more sophisticated in their efforts. 

This has especially been the case with Coronavirus, as criminals have used the pandemic to commit various acts of fraud on unsuspecting companies and the wider public. But what is financial crime and how can it be dealt with?

Financial Crime Definition

Financial crime is defined as an act that is specifically committed against property or money. It involves an individual or organisation taking something that belongs to a third party for their own personal benefit. 

The scale of financial crime can range from basic theft committed by individuals right up to large scale, global schemes orchestrated by criminal syndicates. So severe is the problem that it is recognised as a substantial threat to the development and stability of global economies.

Types of Financial Crimes

It is possible to separate financial crime into two different types of conduct. The first can be defined as activities which dishonestly generate wealth for those involved, for example securing another person’s property by ways of deceit. 

There are also types of financial crimes that aim to protect a benefit that has already been obtained. An example of this is the laundering of money that has been illegally obtained, with the aim of placing the funds out of the reach of the law. 

Financial crime is commonly considered to cover the following offences:

  • Fraud
  • Insider Trading
  • Cybercrime
  • Bribery and Corruption
  • Terrorist Financing
  • Tax Evasion
  • Embezzlement 
  • Information Security 

Who Carries out Financial Crime?

When thinking about financial crime, you could be forgiven for conjuring up images of somebody illegally entering your home or even being accosted in the street. The reality, however, is entirely different.

question mark covering someones identity

Financial crime can be performed by well-respected individuals embedded in society, who perform the act from the comfort of their own office or home. There are several different categories of people who carry out financial crime, including:

  • Employees: These crimes are typically performed by those who have access to systems and protocols with a view to stealing funds or intellectual property from their employers
  • Business Owners or Leaders: This involves senior executives misreporting or manipulating financial data to misrepresent their company’s financial position
  • Customers and Suppliers: Covers fraud carried out by third parties with no internal connection to the business
  • External Fraudsters Colluding with Employees: This involves external third parties working with employees of the firm to try and benefit from the employee’s insider knowledge
  • Organised Criminals: Where large-scale financial crime is carried out by organised syndicates 
  • Corrupt Heads of State: Situations where heads of state will use their power and influence to commit fraud for their own benefit or of their associates

How to Report a Financial Crime

If you suspect a financial crime has taken place, whether it’s against your company or not, it’s essential to report it to the relevant authorities. The way in which you do so may vary slightly depending on the type of crime that has transpired.

As a first step, you should contact your local police and file a report. Action Fraud also acts as a central point of contact to obtain assistance, if you’ve been a victim of fraud yourself, so be sure to file a report there as well. Your next step should be to contact your insurers, as they can provide you with valuable assistance. You can also speak to your local trade association for financial crime-fighting advice. 

Should you believe that another company has committed an act of financial crime or misconduct, this should be reported to Company Investigations at the Insolvency Service. They can also help if a business owes you money unlawfully. 

If you suspect that you are the victim of organised crime, it is essential that you call the police. It is also a good idea to contact them if you are ever feeling intimidated by a third party. 

What is Financial Crime Prevention?

There are several ways in which your business can prevent financial crime. These range from having the correct policies in place, ensuring that everybody within your organisation knows what to look out for and how to act, and understanding the various legislations involved.

bolted door to signify financial crime prevention

For more information about how to tackle financial crime, please check out our blog on the subject. 

Swift Action is Essential

If you believe that you are the victim of financial crime, or have become aware of an instance of fraud, it is vital that you take immediate action. This is to ensure that any financial and reputational damage is mitigated, while also maximising the chances of identifying the perpetrator and bringing them to justice. 

The best way to achieve this is to contact a specialist and experienced forensic accountant, as they will have all the knowhow you need to give you the best possible chance of achieving a positive resolution.

Why Work with Inquesta 

The fact that financial crime is so prevalent in today’s society means it’s essential to obtain specialist assistance if you’re ever unsure about the warning signs or how to respond if the worst does happen. This is where Inquesta can help.

We provide a director-led and independent service that covers everything from tracing important financial records and evidence gathering, to helping you recover misappropriating your funds and mitigating your losses. In addition, we’ll carry out a thorough review process that highlights potential weaknesses in your operations and assists you in closing any loopholes. 

The Inquesta team believes that it’s incredibly important to be proactive when it comes to preventing financial crime. This is why we will also advise on any steps you could take to protect yourself to ensure you are never caught out. We’ve helped businesses across all areas of industry, meaning we’re perfectly placed to do the same for you.

If you’d like to know more about how Inquesta can help, book a free consultation or contact a member of our team today.