Financial Fraud
Financial fraud occurs when someone takes money or other assets from you through deception or criminal activity. Understand the various types of financial fraud and how you can protect yourself.
What You Need to Know About Financial Fraud
Frequently Asked Questions
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Investors and shareholders are usually the victims of financial statement fraud. This is especially true during an initial public offering (IPO) when investor funds go directly to the company. The Association of Certified Fraud Examiners (ACFE) defines it as "deception or misrepresentation that an individual or entity makes knowing that the misrepresentation could result in some unauthorized benefit to the individual or to the entity or some other party."
Learn More Major Legal Pitfalls of Signatures -
To report financial fraud call the FBI at 202-324-3000 or visit . You can also contact the local U.S. Attorney's Office where the fraud was committed—there are 93 offices. Plus, some government agencies target particular types of financial fraud, such as the or the Internet Crime Complaint Center.Learn More How to Report a Tax Cheat
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Criminals are constantly creating new types of fraud. But some common standards include embezzlement, insurance fraud, ransomware, identity theft, financial statement fraud, bribery, mortgage fraud, tax evasion, and ponzi schemes.Learn More The Most Common Types of Consumer Fraud
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There are a few things you can do. Block unwanted calls and text messages. Do not give personal information without doing your research. Never pay anyone with a gift card or wire transfer. And if you were a victim, report it to the Federal Trade Commission.Learn More Watch Out for These Top Internet Scams
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It depends. Both the federal government and each state have many laws that criminalize various types of fraud, and each type of fraud comes with its own classifications and penalties. Some can be civil wrongs and others can be criminal. They can come with jail time and/or fines.Learn More Pioneers of Financial Fraud
Key Terms
- Ponzi SchemeVery similar to a pyramid scheme, a Ponzi scheme generations financial returns for previous investors by constantly attracting new investors with a promise of big profits for little to no risk. The scam falls apart when the new investor's pool dries up so no new money is coming in to continue to fool the investors.
- Tax EvasionTax evasion is an illegal act where a person deliberately avoids paying for a tax liability. To willfully fail to pay taxes is a federal crime and those caught are usually subject to criminal charges and penalties.
- Identity TheftIdentity theft is a crime that occurs when a criminal steals your personal information and credentials to commit fraud, which is usually financial in nature. This type of crime is committed in many ways and its victims are often left with damage to their credit, finances, and reputation.
- Forensic AuditA forensic audit uses accounting methods to examine a company's or individual's financial records to find evidence to use in legal proceedings including criminal charges, divorces, and bankruptcy filings. Performing an audit requires expert knowledge of the legal framework.
- Panama PapersThe Panama Papers was a leak of 11.5 million encrypted confidential documents that were the property of Panama-based law firm Mossack Fonseca. The documents exposed a network of more than 214,000 tax havens involving companies and people from 200 countries.
- Libor ScandalThe LIBOR Scandal was a scheme in which bankers at major financial institutions such as possibly Deutsche Bank, Barclays, Citigroup, JPMorgan and Chase colluded to manipulate the London Interbank Offered Rate (LIBOR). The scandal led to a wave of fines, lawsuits, regulatory actions, and LIBOR being phased out by June 30, 2023.
- SpoofingSpoofing is a scam in which a criminal disguises an email address, name, phone number, text message, or website URL to convince a person they are interacting with a trusted source. Always be skeptical of requests for personal information or downloading files. Be sure to install reputable antivirus and antimalware software.
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How to Spot Fake Money
Protect Yourself from Scams That Target Service Members
Ponzi Schemes: Definition, Examples, and Origins
What Is Spoofing? How Scam Works and How To Protect Yourself
What Is Unfair, Deceptive, or Abusive Acts or Practices (UDAAP)?
Tax Evasion: Meaning, Definition, and Penalties
What Is Identity Theft? Types and Examples
What Is a Forensic Audit, How Does It Work, and What Prompts It?
The Panama Papers Scandal: Who Was Exposed & Consequences
What Was the LIBOR Scandal? What Happened and Impacted Companies
Consumer Financial Protection Act: What it Means, How it Works
Major Legal Pitfalls of Signatures
The Most Common Types of Consumer Fraud
What Is Tax Fraud? Definition, Criteria, Vs. Tax Avoidance
How To Report A Tax Cheat
What Is Carding? How It Works, Prevention Methods, and Examples
What Are the Pandora Papers? What They Revealed and Importance
4 Common Social Security Scams and How To Avoid Them
Barings Bank: Its Collapse, Acquisition, Lessons Learned
Watch Out for These Top Internet Scams
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Credit Card Cloning: Definition and Ways To Protect Yourself
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PIN Cashing: Definition, How It Works, Examples
Skimming: What It Is, How Identity Thieves Use It
Altered Check: Definition, Example, Liability
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The Pioneers of Financial Fraud
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Phishing: What it is And How to Protect Yourself
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Jitter
Synthetic Identity Theft: What it is, How it Works
How to Report Identity Theft
Catfishing: What it is, Examples of Financial Fraud
Paradise Papers: Overview and History
Card-Not-Present Fraud: What it is, How it Works
What Is White-Collar Crime? Meaning, Types, and Examples
Mortgage Fraud: What it Means, How it Works
Structured Transaction: What it Means, How it Works
Form 211: Application for Award for Original Information Overview
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Card-Present Fraud: What It Is, How It Works, Example
Mossack Fonesca: What It Is, How It Works
Abusive Tax Shelter: What It is, Identifying one
Social Security Fraud: What Is It Costing Taxpayers?
Identity Fraud Reimbursement Program
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