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What Is Financial Crime? All of Your Biggest Questions Answered!

Have you lost money or property due to fraud? You have probably been a victim of financial crime.

But just what is a financial crime?

If you’re not a criminal lawyer or a crime-buster, you certainly know little about financial crimes. This means you can be a victim without knowing or you can even commit a financial crime accidentally and find yourself in trouble.

This is why it’s important to brush up your knowledge of financial crimes. Continue reading to learning more about this, including the different types of forms of financial crime.

What Is A Financial Crime?

By definition, financial crime is any crime committed against property. In this case, property can be anything from money in a bank account to a physical building.

The goal of most financial criminals is to gain monetary benefit. For instance, when a person manages to siphon money from your credit card or bank account, it’s usually because they want it for themselves.

Types/Forms of Financial Crime

There are several types of financial crime. Here’s a brief breakdown of the most common types.

Tax Fraud

Did you know about one in every six dollars owed in federal tax goes unpaid?

If you or your business doesn’t pay your taxes, you could be guilty of tax fraud or evasion.

There are a couple of ways this fraud can happen. If you underreport your income so that you owe less in federal taxes, for instance, the IRS won’t take long to discover your illegal activity. www.paystubs.net has an informative article on the consequences of using fake paystubs to manipulate your earnings.

Depending on how long a person commits fraud and the amount of money involved, they could face anything from hefty fines to time behind bars.

Money Laundering

Money laundering involves trying to make illegally obtained money appear legitimately obtained.

Here’s an illustration:

Let’s say person A robs a bank and steals $50,000. They manage to escape successfully. After a while, they decide to start a small business using the stolen funds as capital.

The business picks up and starts making sales. A takes this income and banks it in the business’ account. He/she then withdraws the money and uses it without a worry in the world.

This is a simple case of money laundering, but there are usually more complex ones involving a web of bank accounts across the globe.

Identity Theft

Identity theft happens when a person uses another person’s identification details to commit fraud, such as applying for credit or filing taxes. In 2017, over 14 million consumers in the United States were victims of identity theft.

Terrorist Financing

Terrorists and terrorist groups need money to fund their heinous acts. Anyone who provides financial support, monetary or otherwise, to these individuals groups commits a financial crime.

Understand Financial Crimes

Financial crime is a major issue in the United States and abroad. As a consumer, it’s important to understand these crimes and how they can affect you. Reading this article on “what is a financial crime” is a good place to start, but don’t stop here.

Keep reading our blog for more insights on financial crime and related laws.

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