If you are in a business in which people trust you with their money, you need to understand that you could be charged with financial fraud. This is not to say that you actually did anything wrong, just that you could face financial fraud charges. As such, it is important to know what qualifies as fraud.
Financial fraud generally
Financial fraud occurs anytime someone deprives another of money or property through fraudulent, misleading, deceptive or some other illegal practice. This can be done by someone in a trusted position, but it could also be done through identity theft.
Of course, we all know that if you steal someone else’s identity to defraud a bank or creditor, that is identity theft. However, if you use someone else’s credentials or identifying information to take money or property, you could also face an identity theft charge, in addition to the fraud charge.
If you sell any type of investment, investment fraud allegations are a possibility. If, in the sale of an investment, you give fraudulent information or make misleading or false statements to get someone to invest, you may have committed investment fraud. This can be a scary allegation because “misleading” someone can sometimes be in the eye of the beholder. If you genuinely believe in an investment that itself turns out to be fake, could you face charges because your good-faith belief was wrong? Probably.
If you are in the mortgage or lending business, you need to be aware of lending fraud as well. If someone takes out a mortgage or other loan using false information, of course, that is fraud. However, even the loan officer could be roped into charges, depending on the relationship with the fraudster or the nature of the interaction. And, what if you boss tells you to open a credit account for a bank customer, and then, that customer says they never authorized such a transaction. Is that potentially, fraud? Maybe.
Keep in mind your duties
Even if you do everything right, you could still face allegations of financial fraud because of the actions of your clients, coworkers and bosses. Understanding what can be seen as fraud can help you avoid charges upfront, but if you still face charges, you need to take those charges seriously as they could take away your freedom and livelihood.