Financial crimes are acts that are committed using deceit and omission for monetary gain. Most financial schemes are nonviolent, but they can impact the economy. There are several types of financial crimes in West Des Moines, Iowa, a consumer should know.
Types of financial crimes
An example of a financial crime is money laundering, which involves attempts to conceal illegal funds. This may be done by making several small deposits in different institutions, buying real estate, or gambling. Another financial crime is embezzlement, or depriving the owner of property the offender had permission to use.
Many financial crimes involve ID theft, which is stealing someone’s personal data to make purchases or open credit lines. Credit cards may be obtained fraudulently by theft or acquiring passcodes by skimming devices installed on ATMs. Insider trading is giving information or tips not known to the public to avoid losing money on trades.
How financial crimes impact business and economy
A survey conducted by PwC found financial crimes cost businesses a loss of $42 billion per year and 13% reported losing $50 million. Money laundering is responsible for a loss of 2% to 5% of GPD, which equals $800 million to $2 trillion USD.
The biggest threat of financial crimes to a business is having to close or reduce the number of employees and income. It also may cause employer and partner distrust, decrease the number of future employees, and ruin the reputations of small and large businesses. These crimes make a country’s economic system unstable and less appealing to investors because of the security risk.
Financial crimes often carry stiff penalties because of the effect on the economy. However, the accused party can use some valid defenses to challenge the charges.
