Business Law

Protect your Small Business Against White-Collar Crimes


What comes in your mind whenever you hear the phrase ‘white-collar crimes?’ You probably think of the top ten famous white-collar criminals like Charles Ponzi, Bernie Madoff, and Martha Stewart. These are some of the people who committed crimes in large corporate settings where millions of dollars are handled like thousands would be by small and medium businesses.

When you think of crime, you probably visualize a black-clad masked guy with a gun forcing you to empty the cash counter – perhaps at a bank or a retail store. However, we live in business and tech-driven world where people steal without any violence or threats. Be it bribery, extortion, fraud, tax evasion or embezzlement of funds, someone can steal without causing physical harm.

These crimes often start small. Today, it’s a dollar that’s not accounted for, tomorrow it’s a whopping $100,000 or even millions of dollars. White-collar crimes can potentially drive small businesses to the verge of bankruptcy. Here are four suggestions to help you protect your small business against white-collar crimes.

Perform background checks before hiring

Trusting employees can be sometimes difficult. Studies show that most small businesses suffer direct losses due to white-collar crimes committed by workers, who are longtime associates. Just think about it; due to limited resources, your company has one bookkeeper who handles the accounting tasks, and he or she is the sole signatory of checks. Allowing one employee that much power exposes your business to potential tax evasion charges, money laundering, and embezzlement.

However, you can still trust this employee and have confidence in what he or she does if you already know that the employee doesn’t have a criminal record. Thus, having your lawyer perform a background check on your employees and potential workers can be advantageous to your business.  Indeed, it’s now a standard procedure for businesses to perform background checks on the individuals they intend to hire.

Invest in reliable security networks

We are living in a digital age where the availability of computers and advanced business software programs that have made things convenient, even for white-collar criminals. Companies need to keep pace and invest in advanced security systems to deter white-collar crimes.

Crooks are actually more cunning than you think. They use high-tech tools to steal items and data. Hackers, for example, can easily get personal identification details and financial data that they can use for their own gain. You will realize that someone hacked your business system when things get out of hand. You will need legal assistance and end up spending a lot of money to fix the issue. Why not take the right preventive measures early enough?

Things like access control systems ensure that employees do not have access to spaces containing sensitive data or propriety assets. Having CCTV footage enables remote monitoring of employees, be it at supermarkets to ensure that employees are not walking out with company items. It’s also recommended to invest in data protection tech.

Anonymous Reporting

Another challenge that a small business may face is when the person tasked with management is suspected to be embezzling funds. In such scenarios, small business owners should register with third party agencies where employees can voice their concerns.

The agency can then follow up with an investigation. Any employee can voice a concern to suspicious activities in the business. A reward scheme for whistleblowers and identity protection will encourage anonymous reporting.

Seek legal counsel

Remember that authorities have access to your business data, and your employees’ mistakes, such as tax evasion, can put you in trouble as a business owner. Understand what activities by your business and employees constitute a white-collar crime, and if you are unsure, consult with an attorney.


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