What is white collar crime?

Unlike the standard term ‘crime’, white collar crime is a whole other dimension. Defining white collar crime can be very difficult. The very essence of white collar crime is, is that it exists behind the scenes of the corporate world. It is unseen to the the ordinary consumer. Nevertheless, white collar crime can include any illegal activity conducted in a business environment. These sorts of crimes usually involve non-violent behaviours and instead are pursued through dishonest means such as deceit and fraud to gain personal or business advantage.

With such a comprehensive definition, it enables a lot of options to be considered for who is to be held liable when an offence is committed. In the setting of a small business, it is plain to see that an offending small business itself cannot be sent to prison. It is not a legal person. Rather, white collar crimes can result in fines and further restrictions which can really be a detriment to small businesses wishing to start up in the business world.

Examples of common white collar crimes in small business environments

  • Fraud (fraudulent record keeping)
  • Tax evasion
  • Money laundering
  • Theft
  • Embezzlement

As with most crimes there are numerous activities which may be classified as white collar crimes. Nevertheless, the key and consistent feature of white collar crimes, is that they are usually undertaken for a monetary gain, or to advance the business’s interests.

White collar crime is a bigger problem than we think it to be. According to the Australian Institute of Criminology, fraud alone, is estimated to cost the country around $8.5 billion per year. This is an extremely large figure. So why isn’t it being more closely addressed? Some might say that white collar offences are difficult to detect behind closed doors, however, that is not to say that these sorts of risky business activities won’t go completely unnoticed.

What can you do to prevent white collar crime in your small business?

In order to protect yourself and your business it is ideal to simply understand and be aware of the sort of activity that may fall into the category; white collar crime and the penalties that can follow. The very nature of white collar crimes enable them to occur whether or not the owner and/or its employees are aware it is happening. To prevent such dishonest behaviour, it is essential that small businesses are actively engaged and educated with the current laws and regulations. Yes this includes staying up to date with any recent changes made to the law. If worst comes to worst and you are unsure or don’t understand what the regulations are asking of small businesses it can be an option to seek legal advice to protect your business and its interests.

Small business or not, it is crucial to implement strong reporting reporting mechanisms and policies to sustain and enforce the procedures involving reporting misconduct. Reporting misconduct is the most crucial procedure within a small business. Without it, improper conduct flies under the radar and this is when problems start to occur. Similarly, keeping an eye on employees is just as important. Through regularly monitoring your employees and their conduct, this will help eliminate any variations in records and figures.

Although it is common for people in the business world to assume that fraudulent activity is something that will bypass them if they’re not involved, it is important to understand that in a comprehensive sense it is this sort of activity that can become a threat.

Unsure about implementing monitoring methods? LawPath can connect you to an expert lawyer who can help you understand and advise on your whistleblower policy for a fixed-fee. Submit a quote request and receive up to 3 fixed-price quotes in 24 hours.

Brodie Nettleton

Brodie is a paralegal at LawPath working in our content team, which works to provide free legal guides to enhance public access to legal resources. With a keen interest in Criminal and IP Law, her research focuses on small businesses, and how they can better navigate complex legal procedures.