Corporate scandals are constantly in the news.
Bribery, fraud, negligence and sexual harassment were some of the biggest corporate crimes in the news last year. Stories like these aren’t just limited to giant multinational companies. They can happen to yours, too.
When they do, they can be devastating.
It’s important to educate yourself on the various types of corporate crime in Illinois and around the country. That way, you can avoid making any of these costly mistakes yourself.
Be Aware of these Types of Corporate Crimes
Here are just three crimes that can land your company in legal trouble.
1. Corporate Fraud
There are several different types of corporate fraud.
There’s payroll fraud, in which employees add extra hours to their timesheets and get paid for overtime that they’re not working.
There’s also payment fraud. This involves making fraudulent payments, often through fake bank accounts.
In some cases, employees in accounting departments write extra checks to themselves and disguise the payments under different names. Regular financial audits should be carried out to identify this kind of behavior.
Fraudulent activity can go on for months or even years without upper management noticing, resulting in huge losses for the company. Some companies are even forced to shut down completely due to irreparable financial damage.
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2. Tax Evasion
Some of the biggest companies in the world have been highlighted for corporate tax evasion.
Google, Apple, Starbucks, and Ikea have all been accused of avoiding paying taxes. In each case, it made headlines in the news, causing public outrage.
This can be hugely damaging to the image of a company, tarnishing its brand reputation. Disgruntled consumers often choose to boycott companies after tax scandals come to light. As a result, these companies can see huge drops in sales.
3. Sexual Harassment
In the wake of the Harvey Weinstein scandal and the #MeToo movement, more and more people are coming forward with claims of sexual harassment in the workplace.
The way in which a company responds to such claims is crucial. If the crime is ignored or not dealt with properly, victims can file a complaint with the Equal Employment Opportunity Commission. They can also take their employer to court.
A sexual harassment case may result in a settlement, forcing a company to pay out hefty fees to victims. In some cases, these settlements amount to millions of dollars.
Regardless of the outcome, these cases are often very high-profile. If such a case is brought against your company, you can expect to be publicly scrutinized.
Protect Your Business
In many cases, corporate crimes in Illinois aren’t carried out by CEOs and managing directors, but employees, partners or suppliers.
That’s why it’s crucial that you screen all third parties before agreeing to do business with them. Trust and reliability need to be established first.
Risk management allows you to do that. This process involves identifying and assessing the risks that come with third parties. As a result, you can reduce your losses through preventative measures.
Find out more about the specialist risk management services we provide.