We all know the old saying: If something sounds too good to be true, it
probably is. But these are hard economic times, and if you’re a business
owner and that something is a scheme claiming it can put dollars in your
pocket, you may be tempted to bite.
The two types of business fraud below are the most common scams targeting
small business owners in 2009. The best way to avoid being victimized by
business fraud? Retain the services of an experienced fraud lawyer or
business lawyer, and check with him or her about your business on a regular
basis or before you sink your hard earned cash into any proposition.
Internal Business Fraud
When times are tough, small businesses look for ways to cut back on
spending. Unfortunately some of their cost-cutting measures turn out to be
false economies. Among these are the annual auditing procedures that may
often be an owner’s first clue that something fishy’s going on with the
accounts receivable. Owners may also cut back on background checks for new
hires, and end up with employees whose probity is questionable. Inventory
fraud is widely practiced by unscrupulous employees. Embezzlement of actual
funds is less common, but still can be a staggering blow since often the
embezzler is a long-time employee who the owner has grown to trust.
The $787 billion stimulus plan passed by Congress in early 2009 spurred an
entire industry claiming that in addition to federal spending and tax cuts
designed to jumpstart the economy, the package contained millions of dollars
worth of grants for small business owners – if they only find them. Ads for
companies that guaranteed to hook small businesses up with free money began
proliferating on the radio and Internet. Of course they were asking for
their own money up front – and some small business owners found themselves
hustled out of thousands of dollars.
Here’s the inside scoop on government grants: they mostly go to nonprofits
or science and technology companies. While a few government grant
opportunities do exist for plucky entrepreneurs, they are the exception not
the rule – and you can track them down yourself merely by pointing your
browser to www.grants.gov.
Developing an ongoing relationship with an experienced fraud lawyer means
you have a sage advisor at your side who can spot the red flags when you are
too busy or emotionally invested to spot them yourself.
Aaron M. Kelly, Esq.
The Kelly Law Firm, L.L.C.
13430 N. Scottsdale Road, Suite 106
Scottsdale, Arizona 85254
Licensed in Arizona and Michigan
B: Internet Law Blog