To protect against white-collar crimes | Rockstate of Mind
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Strategies for small ventures to protect against white-collar crimes

When people think of white-collar crimes, they think about the most famous white-collar criminals which include people like; Bernie Madoff, Charles Ponzi or Martha Stewart. The white-collar crimes generally involve cheating, lying and stealing in a business setting. Here are some strategies for small time business against white collar crimes:


  1. Crimes by Employees of the Company-

Adding to the crimes done by public officials, sometimes small businesses suffer loses by the crimes done by their employees. Due to the limited resources, the small businesses have only one bookkeeper who is the signatory of checks and prepares the financial and accounting statements. So, having one person to have that much power over the business can expose the company to potential embezzlement, money laundering ,and tax evasion charges. To protect this type of crime the following strategies can be used:

  • Company checks should require two signatures, in this way more than one individual is aware of all the company’s disbursement.
  • Get an independent accountant to perform an audit on company financials. It need not be a certified audit and not to be done annually, but a biannual audit is a good idea.
  1. Crimes by Vendors Who Contract with the Company-

Not only crimes by employees but vendors also commit white-collar crimes in small businesses. A few scenarios of this crime are: A firm purchased a bulk order of pens from a company giving the pen at a lower price but later on after the delivery the company realizes the pens only have half ink. So, to prevent these crimes, the company can do the following:

  • Bring in fraud awareness programs for employees.
  • Develop a policy whereby the board approval is necessary before making the purchases, so that more company representatives are, asking questions about the new vendor.
  • Make a policy to whereby all new vendors are investigated before getting into a contract.

Environmental crime


  1. Strict Liability for Environmental Crimes-

Being a business owner, you are held liable for the crimes of another individual without the knowledge or intention of the crime. For instance, if a company X acquires a land and later finds out about the hazardous material underground, company X is responsible to clean it up. Now if company X hires company Z to clean the area and they throw it into the lake and disappears, then company X is exposed to criminal prosecution. So, make sure to check the companies before engaging for business.

  1. Be Truthful About the firm’s Finances-

During the times of recession, the small business has cash-flow problems, money is entering, clients have delayed payments due to their financial issues. So small business seeks loans and while presenting the finances of the firm, to stretch the truth they show fraudulent representation which is called cooking the books. So, make sure while making representations about the firm do not stretch the truth.

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