Top Forms of Fraud and Financial Crime
- Health care crimes
- Identity theft
- Tax crimes
- Schemes and scams
If it’s true that money makes the world go ‘round, then it makes sense why fraud and economic crimes are perpetrated on a regular basis. Financial crimes occur when someone takes money and uses it fraudulently while intending to benefit off the situation. Most often, deceit or outright theft are integral factors in economic crimes. What are the five most common types of financial crime? Here’s our list:
1. Identity Theft
Identity theft happens when an individual’s personal data is used fraudulently by someone else for economic gain. Most often, the thief obtains information like the victim’s name, address, phone number and banking information. They may have gained access to this data online, from your discarded mail or even from someone you’ve done business with.
Then, they use the information to make purchases and take out loans in your name. In 1998, Congress recognized the growing threat of identity theft, so they made the action a federal crime. It’s now considered a felony, which comes with more severe punishments.
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2. Tax Fraud
There’s a significant reason why a huge portion of the country is demanding to see President Trump’s tax returns. Tax crimes are perpetrated on a regular basis by wealthy individuals. Often, the crime goes unpunished. Tax crimes occur when someone willfully attempts to defraud the IRS by paying fewer taxes than they should. Here are the most common types of tax crimes:
- Failing to file a tax return
- Failure to report income
- Attempting to make unauthorized deductions
- Non-payment of taxes
Tax crimes are taken very seriously by the law. In addition to facing criminal punishments, the IRS could also seize your property or garnish your wages.
3. Health Care Crimes
What exactly is a health care crime? This type of crime happens when an entity abuses the health care insurance system for financial gain. This type of crime could be committed by a health care provider, business, or individual. Here are some examples:
- Providers who charge more than procedures are actually worth
- Providers who perform unnecessary procedures for the insurance payout
- Falsifying a diagnosis to justify unnecessary tests
- Overbilling the insurance carrier
- Medical identity theft
- Fabricated health care claims
It’s estimated that tens of billions of dollars are lost annually due to fraudulent health care insurance claims, according to the National Health Care Anti-Fraud Association.
4. Schemes and Scams
From Ponzi schemes to the infamous Nigerian Prince scam, deceptive financial tricks are against the law. Usually, these types of deceptions include pleas to send money either as an investment into a business, product, or relationship. The victim sends the money, and suddenly, you’ve been ghosted. The other person or business disappears, and so do your chances at ever seeing your money again. These types of scams have become even more common in the Internet era.
Have you heard of the scam where criminals hack into databases, steal information and then blackmail the person or business into giving them money for the data? This type of cybercrime is becoming even more common, and the police are not yet equipped to handle such new evolving criminals. In addition to this type of scam, cybercriminals are also stealing people’s financial information, hacking into their accounts and using the web in other nefarious ways.
These types of financial crimes typically do not involve any type of violence. Despite that, they are far from victimless crimes. The Department of Justice confirms how victims of the common types of economic crime can suffer financially, emotionally and even physically.