Financial crimes have become a serious issue globally. These illegal activities involve money laundering, embezzlement, cybercrime, identity theft, Ponzi schemes and other forms of fraud that defraud millions of people every year.
As financial crimes continue to impact individuals and businesses alike, it’s important to be aware of the following seven types of financial crimes and the shocking facts about them.
1. Financial Crimes Are Increasing Rapidly
In recent years, financial crimes continue to increase rapidly worldwide. Another report by the Association of Certified Fraud Examiners (ACFE) estimates that global economic losses due to financial crime are at least $5 trillion annually. With technology improving significantly in recent decades, fraudsters are finding new ways to exploit digital systems for personal gain.
2. Identity Theft Is More Prevalent Than Most People Realize
Identity theft affects millions of people globally each year with thieves stealing names, birth dates and social security numbers for fraudulent purposes like getting loans or opening bank accounts in another person’s name.
One of the latest examples is synthetic identity theft where criminals combine real and fake details to create a new identity; these identities then obtain credit cards or loans before disappearing entirely.
The impact of these types of financial crimes can be devastating, as they not only undermine the integrity of the financial system but also facilitate other criminal activities such as drug trafficking and terrorism financing.
3. Money Laundering Is Linked To Organized Crime And Terrorism Financing
Money laundering is the process by which illegally obtained funds are hidden and disguised as legitimate funds through different channels like banks or offshore accounts – typically used by terrorist groups or organized crime syndicates alike.
This illegal activity can result in large-scale economic damages, making it difficult for government officials around the world who must collaborate to track down and prosecute these criminals.
4. Ponzi Schemes Are Still Prevalent In Today’s World
Ponzi schemes are another form of financial fraud that has gained notoriety over the years. They’re named after Charles Ponzi who scammed thousands in 1920; since then, criminals have been using them to swindle investors while promising high returns on their investments.
A recent example is the collapse of India’s $3 billion gold investment scam orchestrated by Nirav Modi – this scheme defrauded several banks by getting huge loans which couldn’t be repaid thus bringing down reputations along with billions lost.
5. Embezzlement Happens Everywhere, Not Just Corporations
Embezzlement happens when someone in a position of trust takes money without authorization from their employer’s account, cash register, or point of sale system for personal gain. This type of financial fraud often happens right under employers’ noses; sometimes it is done on very small scales like taking a few cents out here and there or stealing products off shelves.
While embezzlement can occur in any organization, an especially devastating case occurred when former Houston school administrator Richard Patton was indicted for allegedly stealing nearly $250,000 from the school district during his tenure as an auditor.
6. Cybercrime Is Getting More Sophisticated With Time
Cybercrime encompasses various illegal activities that threaten both businesses and individuals’ sensitive data assets online. As technology evolves so too do cyber-criminals who use sophisticated tactics to get ahead – from brute force hacking techniques to phishing emails designed to fool people into giving away confidential information about passwords or bank accounts – online scammers are always one step ahead at times making us wonder what might be next?
7. Financial Crimes Can Be Hard To Detect And Even Harder To Investigate
Perhaps the most staggering fact around financial crimes concerns their detection frequency rate compared against investigations success rates
According to FBI statistics; Only 15% of all reported fraud cases are investigated due to the complexity and time it takes to track down offenders. Many victims don’t know they have been defrauded until months, or even years later meaning that investigating authorities could end up dealing with a backlog.
The above-listed facts show just how rampant financial crimes have become in recent years. As long as there’s money to be made, criminals will continue developing new ways to steal from individuals and businesses alike. That’s why staying aware of these schemes is crucial for protecting yourself against them.
Being prepared means keeping good practices such as using strong passwords or two-factor authentication when making transactions online whilst also being vigilant at your local ATMs always looking out for skimming devices. For businesses, that means using professional IT services to make sure your network and computer systems are secure.
The government authorities should collaborate and take strict actions against financial crimes. This can be achieved by imposing hefty fines and increasing the severity of sentences in court. By doing so, criminals can be deterred from committing financial crimes again. In addition to this, transparency around finances and spreading awareness can also help combat these crimes and protect ourselves against fraudulent activities.