The Impact of Embezzlement in Small Business
According to the Oxford Dictionary, “embezzlement is the act of dishonestly appropriating or secreting assets by one or more individuals to whom such assets have been entrusted”. It is this act of dishonesty that is costing American businesses billions of dollars each year. According to the Federal Bureau of Investigation (FBI), “Embezzlement is considered a white-collar crime, a term coined in 1939. It is not a victimless crime. A single scam can destroy a company, devastate families by wiping out their life savings, or cost investors billions of dollars.”
In today’s economic decline, the number of embezzlement cases in small businesses has risen drastically. Bressler (2009) states that “Embezzlement may perhaps be the most serious crime impacting business, in that many times the crime goes undetected for years. As so many instances of embezzlement go unreported to police, experts can only estimate the extent of embezzling. Embezzlement may cost companies as much as $90 billion each year.”
The current trend of economic decline has shown an increase in the number of arrests made for embezzlement. The following data shows that increase.
Estimated arrests of all persons in the United States: 1994 - 2008
1994 1995 1996 1997 1998 1999 2000
Embezzlement 14,300 15,200 15,700 17,400 17,100 17,100 19,000
2001 2002 2003 2004 2005 2006 2007 2008
Embezzlement 20,200 18,600 16,800 17,300 19,000 20,000 22,400 21,400
These statistics are estimates that account for missing data and may differ from other published sources. The county-level files which are the source of this information are not official FBI releases and are being provided for research purposes.
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Works Cited
Bressler, Martin S. "The Impact of Crime on Business: A Model for Prevention, Detection & Remedy." Journal of Management and Marketing Research 2 May (2009). Web 21 Jan. 2012
"Embezzlement." Oxford Dictionary. n.d. Print.
"Embezzlement Law." N.p., n.d., Web 21 Jan. 2012
Federal Bureau of Investigations (FBI) web. 21 Jan. 2012
McCown, Ella A. “Embezzlement – A White Collar Crime: A Review of Federal and Supreme Court Cases During Economically Challenging Eras. Amerian Society of Business and Behavioral Sciences. Feb (2010). Vol 17, No. 1
Puzzanchera, C. Adams, B., and Kang. W., (2011) “Easy Access to FBI Arrest Statistics 1994-2008” Web.
Ruoco, Vincent. “Embezzlement Prevention and Detection for Small and Mid-Size Businesses and Tax Exempt Organization.” N.p. March (2007). Web. 21 Jan. 2012.
Debra became the assistant vice-president and manager of energy lending of a Canadian Western Bank on January 31, 2006. Within a month Debra set up her embezzlement scam by creating two corporations that the embezzled funds would be funnelled too. Debra set up an account in a woman’s name using the woman’s GIC (guaranteed investment certificate) which was worth 8 million dollars. Debra started with 100,000 dollars in a line of credit using the woman’s name and increased it 6 times until the line of credit reached $950,0000 on November 6, 2007. Additionally, Debra arranged for 5 new accounts in the same woman’s name with a total deposit of $16.4 million. Debra made 72 unauthorized withdrawals from the fake account in the two year time frame of the scam. She kept the scam going by transferring money from the
I believe that asset misappropriation by accounts payable fraud is occurring at Wayland Manufacturing Company due to a lack of proper internal controls. Making the company’s Chief Accountant responsible for additional day-to-day functions provides him with opportunity to commit by creating fictitious vendors with his information and then creating fictitious invoices. Newbaker can then conceal his fraud by approving the invoices for payment. Employees working at an organization for more than five years are more likely to commit fraud. Therefore, Newbaker’s six-year history with the company has made him trustworthy and very knowledgeable, which could indicate involvement in asset misappropriation. The high employee turnover could represent a past fraudster leaving before getting caught or employees refusing to continue with the asset misappropriation. In addition, the varying monthly accounts payable transactions ranging from the lowest being April 2014 and
One of the most recent white-collar crime involved Wells Fargo, a banking and financial services provider. In 2016 San-Francisco based bank Wells Fargo (WFC) employees secretly created millions of unauthorized bank and credit card accounts without permission of their customers. Opening about 1.5 million fraudulent deposit accounts and submitting 565,443 credit card applications allowed Wells Fargo employees to boost their sales targets and receive bonuses. Consequently, customers were wrongly charged fees for accounts they did not know existed. In this business crime scenario, Wells Fargo involved to pay $185 million in fines and refund $5 million to affected customers. Also, around 5,300
One of the most recent white-collar crime involved Wells Fargo, a banking and financial services provider. In 2016 San-Francisco based bank Wells Fargo (WFC) employees secretly created millions of unauthorized bank and credit card accounts without permission of their customers. Opening about 1.5 million fraudulent deposit accounts and submitting 565,443 credit card applications allowed Wells Fargo employees to boost their sales targets and receive bonuses. Consequently, customers were wrongly charged fees for accounts they did not know existed. In this business crime scenario, Wells Fargo involved to pay $185 million in fines and refund $5 million to affected customers. Also, around 5,300
US Department of Justice, Federal Bureau of Investigation. Uniform Crime Reporting Statistics. n.d. 13 February 2012 .
In 2008 the worst financial crisis since the great depression hit and left many people wondering who should be responsible. Many Americans supported the prosecution of Wall Street. To this day there have still not been any arrests of any executive on Wall Street for the financial collapse. Many analysts point out that greed of executives was one of the many factors in the crisis. I will talk about subprime loans, ill-intent, punishments, and white collar crime.
Ulinski, Michael. "AN ANALYSIS OF SMALL COMPANY FRAUDS AND." American Society of Behavioral Society. Dept of Business, Pace University. 05 Feb. 2008.
Most people consider this crime to consist of CEO’s manipulating their way to making a large fortune. This of course, is true most of the time in high-profile cases. For example, in late 2001 Enron Corporation executives confessed to overstating the company’s earnings. This lead to artificially inflating what the company was worth and deceived the investors. It took some time to unravel all the fraud put behind this devious act but shows how sophisticated white-collar crime can be. Although it’s usually associated with upper management of corporations, people from all different levels and occupations can perform this crime ("How White-collar Crime Works").
U.S. Department of Justice. (2012). Correctional Populations in the United States, 2011. Bureau of Justice Statistics.
Perri, J.D., CFE, CPA, F. (2011, January/February). White-collar crime punishment too much or not enough?. FRAUDMAGAZINE, Retrieved from http://www.all-about-forensic-science.com/support-files/white-collar-crime-punishment.pdf
Crime Data Sources Kayla M. Ferrell American Public University Systems Date of Submission Contents Introduction 3 Uniform Crime Reports 3 National Incident-Based Reporting System 3 Uniform Crime Reports Methodology 4 National Incident-Based Reporting System Methodology 4 Similarities of UCR and NIBRS 5 Which System is More Efficient? 5 Conclusion 6 References 6 Introduction The top two and most commonly used programs for reporting and tracking crime statistics in the United States are the Uniform Crime Reports, UCR, program and the National Incident-Based Reporting System, NIBRS, program.
Ott, T. P. (2010). US law enforcement strategies to combat organized crime threats to financial
From 1991-2000, statistically there was a dramatic decline in crime nationally. The statistics studied were of all categories of crimes considered serious, including: homicides which decreased by 39%; rape which decreased by 41%; robbery which decreased by 44%; aggravated assault which decreased by 24%; burglary which decreased by 41%; auto theft which decreased by 37%; and larceny which decreased by 23%. The statistics show a range of decline of 23-44%! (United States Department of Justice, Federal Bureau of Investigation 1990, 2000. Uniform Crime Report. Washington, D.C.) The evidence indicates that the benefit of declining crime rates are concentrated on specific groups with...
Champion, D 2011, ‘White-collar crimes and organizational offending: An integral approach’, International Journal of Business, Humanities, and Technology, vol. 1 no. 3, pp. 34-35.
The U.S. Department of Labor (2011) reported the national average of unemployment for 2008 was 5.8 percent. The rate dramatically increased in 2009 with an average of 9.3 percent and 9.6 percent for 2010. While unemployment rates have increased, the FBI’s preliminary reports for 2010 show that law enforcement agencies across the U.S. have reported a decrease of 6.2 percent in the number of violent crimes for the first 6 months of 2010 when compared to figures reported for the same time in 2009. The violent crime category includes rape, murder, robbery, and aggravated result. The number of property crimes also decreased 2.8 percent when compared to the same time last year. Property crimes include burglary, larceny-theft, and motor vehicle theft. Arson decreased 14.6 percent when compared to the same time periods of 2009 (FBI, 2011).