White collar crime is any type of nonviolent illegal act committed in a business environment. The term is used because the crime does not involve any use of force. Small businesses are often used to perpetrate many types of white collar crimes.
What Is Criminal Small Business Fraud?
Criminal fraud in a small business is any act committed by or through a small business that is intended to deceive someone via a false representation of a fact. That fact is relied on by an individual to their legal detriment. The elements of fraud are:
- Misrepresentation of a material fact
- The misrepresenter knew that the misrepresentation was false
- The misrepresenter intended to defraud the victim
- The victim relied on the fact as truth
- The victim incurred damages or injury from relying on the false fact
The most common underlying reasons for fraud in a small business are to:
- Obtain money or assets
- Advance the business’ interests
Who Can Commit Small Business Fraud?
Anyone connected to the business involved in the fraud can commit small business fraud. However, the people who are most likely to commit small business fraud are the business owner and their employees.
What Are Some Examples of Small Business Fraud?
Embezzlement is one of the most common types of small business fraud. It occurs when an individual illegally takes assets or property entrusted to their care. For example, an employee can take money entrusted to them from the small business. Other types of small business fraud are:
- Telemarketing fraud
- Tax evasion
- Mail fraud
- Wire fraud
- Payroll fraud
- Charity fraud
- Bankruptcy fraud
- Securities fraud
- Credit card fraud
Can I Face Jail or Prison Time for a Small Business Fraud Conviction?
Yes. The type of punishment a person convicted of fraud receives depends on the criminal act. Typically, punishment varies from jail/prison or probation to fines or restitution.
Do I Need a Lawyer If I Am Accused of Small Business Fraud?
Yes. A small business fraud charge is extremely complex. The small business may be investigated, and there may also be investigations into the professional and personal lives of the owner and employees. Contact a criminal lawyer to understand more about defenses pertaining to small business fraud.