Red Flags: How to Tell if You’re Being Targeted for White Collar Crime

Red Flags: How to Tell if You’re Being Targeted for White Collar Crime

White collar crime can happen to anyone. It’s important to watch out for red flags so you can protect yourself. Here’s what to look out for and how to respond if you suspect something fishy.

What is White Collar Crime?

White collar crime refers to non-violent crimes done for financial gain, often by abusing a position of power or trust. Common examples include embezzlement, insider trading, tax evasion, bribery, and fraud. Perpetrators are usually business people, government officials, or professionals. Victims can be individuals, businesses, or even governments.

While violent crime rates have dropped in recent decades, white collar crime has been on the rise. Advances in technology have opened up new ways for criminals to scam people. And the complexities of the financial system provide opportunities to hide illegal activities. No one is completely immune from the threat.

Watch for These Red Flags

Here are some suspicious behaviors that could indicate you’re being targeted:

• You’re pressured to make a big purchase, investment, or donation against your better judgment.
• Someone you just met is overly friendly and wants details about your job, income, or assets.
• You receive an invoice for products or services you never ordered.
• There are unusual transactions in your financial accounts that you didn’t authorize.
• Your employer asks you to falsify records, forge signatures, or bend accounting rules.
• A financial advisor encourages aggressive strategies that seem risky or unethical.
• You discover accounting discrepancies or missing inventory at your company.
• A contractor, vendor, or consultant bills your company for questionable charges.

Of course, not every unusual situation is criminal. Use common sense to assess if something seems legitimately concerning. The more red flags that appear, the more vigilant you should become.

Watch Out for These Scams

Some common white collar scams to beware of include:

Ponzi Schemes

This is a fraudulent investing scam where money from new investors is used to pay fake “returns” to earlier investors. The scam collapses when new money stops flowing in. Many people lost money in Bernie Madoff’s infamous Ponzi scheme.

Pyramid Schemes

Participants are recruited to join a business that’s more focused on signing up new members than selling real products or services. Money flows upwards to those at the top of the pyramid. Most people lose money.

Fake Invoices

Criminals send out invoices for products or services that were never ordered or delivered, hoping some people or businesses pay them by mistake. It’s a numbers game for scammers.

Bogus Investments

Fraudsters promote fake investment opportunities to steal money. They may falsify documents, lie about returns, or simply take the money and disappear. Some pretend to have inside information on “hot stock tips.”

Romance Scams

Con artists develop online relationships and eventually ask their victims for money for various false emergencies or needs. The scammers prey on the loneliness and generosity of their targets.

Fake Charities

Criminals set up sham charities or nonprofits to enrich themselves with donated funds. They pull at heartstrings with emotional appeals while spending little on actual programs.

Protect Yourself from White Collar Crime

If you notice red flags, take steps to avoid becoming a victim:

• Don’t give money or sensitive details to someone you just met or barely know. Verify their identity and motives.
• Review financial statements regularly for any suspicious transactions. Report anything concerning.
• Don’t make major financial decisions under pressure. Consult trusted advisors if needed.
• Watch for unusual behavior changes in colleagues that could signal fraud.
• Research investment opportunities thoroughly before committing money.
• Don’t pay invoices for unknown goods or services. Report them as potential fraud.
• Avoid business deals that seem too good to be true. They probably are.

Trust your instincts. If an offer raises many questions or concerns, it’s usually better to walk away. Don’t let fear of missing out or polite manners override common sense.

Report White Collar Crime

If you uncover or highly suspect white collar criminal activity:

• Report it to your supervisor if it involves your workplace.
• Contact law enforcement authorities to file a complaint.
• Notify relevant regulatory agencies that oversee the business or industry.
• Consult a whistleblower attorney to understand your rights and next steps.

Under the SEC whistleblower program, you may be eligible for a monetary award if your tip leads to an enforcement action. An attorney can advise if you qualify and help you navigate the process.

Many white collar crimes can be charged under federal statutes like mail fraud, wire fraud, bank fraud, or money laundering. State laws also apply. An attorney can assess which criminal laws may have been violated.

Don’t confront the suspect directly or tip them off. That could hurt the investigation. Work discreetly with the proper authorities.

Recover Losses from White Collar Crime

If you lost money due to someone else’s fraud or misconduct, take legal action to seek compensation. An attorney can help you:

• File a civil lawsuit against the perpetrator for financial damages.
• Explore whether any seized assets could reimburse victims.
• Determine if insurance policies cover any losses.
• Petition the court to order restitution if the defendant is convicted.

The path to recovering stolen funds or recouping investments lost to fraud is rarely quick or easy. But it’s worth exploring your options with an attorney. They can evaluate the evidence, assess your chances of success, and craft a legal strategy.

Avoid Being Branded a White Collar Criminal

If you’re being investigated for potential white collar crimes:

• Don’t try to destroy evidence or hide assets. That can lead to obstruction charges.
• Hire a criminal defense attorney to protect your rights.
• Follow your lawyer’s advice about whether to testify or cooperate with authorities.
• Your attorney may be able to negotiate more favorable plea terms.
• Be cautious about public statements that could be used against you.

An experienced white collar crime lawyer can carefully navigate your defense, advocate for you in court, and try to achieve the best possible outcome given the circumstances.

The Costs of White Collar Crime

Beyond financial losses, white collar crime has many victims and wider costs:

• Workplace morale and productivity suffers if fraud occurs.
• Investor and public confidence declines.
• Consumers pay higher prices when companies lose money to scams.
• Taxpayers shoulder the burden of investigating and prosecuting cases.
• Government services lose out on tax dollars diverted by evasion and fraud.
• Criminals divert time and talent away from legitimate business activities.

There are few winners in white collar crime. To protect our economy and communities, it’s important we all stay vigilant and report suspicious activities. With awareness and action, we can try to stop financial crimes before they start and avoid becoming victims.