Though it encompasses a range of offenses, most people probably associate the term “white-collar crime” with cases of corporate fraud. Two high-profile examples of corporate fraud in recent history are the Enron and Bernie Madoff scandals.
What Is Corporate Fraud?
Corporate fraud typically involves deceiving shareholders, investors, auditors or other external agencies by manipulating financial data or figures in order to hide the true financial standing of a business or corporation.
There are a number of ways to accomplish this, including:
- • Falsifying accounting records
- • Engaging in unlawful trades or transactions designed to misrepresent profits and losses or avoid regulations or guidelines
Receiving kickbacks, participating in insider trading or using corporate assets for personal gain can also constitute corporate fraud.
The penalties associated with corporate fraud depend on the circumstances of the case, including the amount or value of assets involved. Depending on the scale of the fraud, those involved may come under investigation by federal agencies such as the U.S. Securities and Exchange Commission, the Commodity Futures Trading Commission or the Federal Bureau of Investigation.