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May 22, 2017

Financial Fraud: What Is It and What Are Its Implications?

Financial fraud: Definition and Types of Fraud

Financial fraud is a white-collar crime that is defined as a form of theft committed by an individual or a business when they either take resources or use them illegally in order to obtain profit. Often those who commit financial fraud act deceitfully and abuse the position they hold at work, and that is what makes this type of crimes different from robbery and theft.

Types of financial fraud:

  • securities and investment fraud;
  • credit or debit card fraud;
  • money laundering;
  • tax fraud;
  • extortion;
  • bribery;
  • embezzlement
  • bank fraud;
  • accounting fraud;
  • pyramid schemes;
  • etc.

Tips on How to Avoid Financial Fraud

Most victims of related crimes have a distinctive feature – a desire to accumulate wealth quickly and effortlessly. Unscrupulous investment advisers, stockbrokers, insurance agents and pyramid schemes have a nose for such persons’ naivety. And the Digital Revolution has made it easier than ever for a scammer to take advantage of people. The means by which fraudsters contact their victims are plentiful: from door-to-door sales and cold calls to social media and email. And with all the technologies available, sometimes deceived people won’t even be able to learn the real name and the location of the criminal, making it difficult and in some cases impossible for law enforcement authorities to track down the fraudster.

So in order not to become end up in such a situation, we recommend that you follow these guidelines:

  • Be wary of anyone promising you investment returns and other benefits that sound too good to be true. Never trust salespeople who rush you into making an investment or a purchase immediately.
  • Always double-check before making a decision. Take your time to learn more details about the salesperson, the firm they represent, and the venture they are trying to convince you to invest your money in. A simple Google check can save you from becoming a victim. Other sources include the FINRA (Financial Industry Regulatory Authority) BrokerCheck online service and the SEC (Securities and Exchange Commission) website. You have all the right ask for records of the person’s professional conduct, inquire into the company’s background, audits, investigations, lawsuits and other details.
  • Ignore unsolicited emails, messages, phone calls and Internet banners asking you to invest your money in some venture or to wire money as a processing fee for a lottery you won but had never signed up for. Set up spam filters for your email box and install an ad blocker in your browser to save you the trouble of even paying attention to such things.
  • Never provide your personal financial information, your ID, Social Security card number, PINs, etc. and stay alert when using your credit card in public. Regularly check your credit card charges for transactions you never did.

What to Do If You Become a Financial Fraud Victim

Sadly, despite the informative measures the government takes in order to prevent people from falling victims to financial fraud and all the media coverage about scandalous Ponzi schemes, people are still largely exposed to such crimes. This is especially true about senior people. Moreover, the elderly frequently feel embarrassed about reporting crimes, as they are afraid to come across as not capable of managing their finances. Therefore, it is advisable that young people educate their elderly relatives about the guidelines mentioned above.

If you or someone you know still ended up falling for a scam, it is necessary that you report the crime right away. You can find the contacts of the authorities charged with attending to your specific type of situations on government websites, for example, you can visit the stopfraud.gov website. And in case the scammers have done their homework and it seems like there is no chance that you can prove that a crime has been committed against you, hire a legal counsel immediately. Timely and competent assistance of an experienced financial fraud lawyer can make all the difference and help you get your money back.

Steps for People Investigated or Accused of Financial Fraud

A recent spike in financial crimes and their scale has put law enforcement authorities on guard against such crimes. This has given way to a large number of investigations and prosecutions against business professionals and companies that provide services related to investment, securities, insurance, etc., who meant nothing but good to their clients. If you have found yourself under investigation or someone you know was arrested for this crime, you should hire a financial crimes attorney as soon as possible. Mind that you should avoid speaking to the enforcement officers without legal representation as any details provided may be used to incriminate you. This will make it much more complicated for your securities or bank fraud defense lawyer to defend your case successfully.

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Manhattan

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New York, NY 10005

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Queens

35-37 36th St,
Astoria, NY 11106

Phone

888-977-6335

Brooklyn

195 Montague St.
14th Floor,
Brooklyn, NY 11201

Phone

888-977-6335