Financial crime is stealing funds or assets illicitly from a person or entity for personal profit. The most prevalent financial crimes include money laundering and terrorist financing, fraud corruption, insider trade, tax fraud, embezzlement, digital crime, and identity theft. External attackers and internal employees, including those at the top of the business, can carry out these crimes.

The term “financial crime” also encompasses various less criminal severe acts. Although the costs or legal consequences may not be as high as the more severe crimes mentioned below, this conduct falls under the category of financial crimes:

• • Purchases for personal use: Employers can use the company’s funds to purchase items that aren’t directly related to work.

• • Theft: Employees take cash (e.g., from an ATM or a safe) or even items that belong to the business and then sell them in exchange for money.

• • Skimming: Employees cut small amounts off the top of each transaction, generally in amounts small enough to be unnoticed. However, they increase over time, which is a major issue for cash-based retail companies.

• • Payroll scheme: In some instances, employees of payroll issue bonus checks that are not approved or understate an employee’s working hours.

• • Billing schemes: Employees present fake invoices to businesses, which the company will then pay the employee, or an accomplice is paid the money.  

• • Forgery: The process of obtaining or reproducing documents with someone else’s signature. Documents may include timesheet cost reports, agreements, and even checks.

In contrast, perpetrators of financial crime typically range from minor criminals to large-scale criminal syndicates across the globe:

• • Organized criminals: Big-scale and extensive operations that may include dangerous, influential people.

• • Individual criminals: These include hackers who have no connections to the business or its suppliers, customers, or contractors but who have some understanding of the industry.

• • Business leaders: These include directors or executives who steal from their companies or lie about an organization’s performance (e.g., manipulating financial information to overstate profits).

• Employees: This typically involves stealing money and doing things to cover up their tracks (e.g., skimming). Criminals from outside often employ employees as partners to carry out their criminal actions. Employees may be involved in this scheme or unknowingly targeted to be engaged in illegal activities, e.g., a criminal pretending to be a CEO or business leader gaining access to secure information (phishing).