Sean P. Dixon
Business 670: Legal Environment
Instructor: Jennifer Stephens
April 4, 2011
Americans lose hundreds of millions of dollars each year to fraud. Billions more are lost world-wide to con artists touting the next great investment idea, guaranteed loans and diets that can't fail. These con artists do not discriminate between the rich and poor, the young and old, nationality or race. They target the well-educated, so-called smart individuals as well as those with less education and sophistication. Fraud through the use of a Ponzi scheme is very common within the business world among governments, corporations, executives, and management. Not only is committing fraud illegal, for many people it is an ethical issue as well. When innocent people are taken advantage of by others, many legal and ethical issues are raised. The following paragraphs shall describe fraud in detail, the types of fraud, the effect it has on the business world today, how to avoid ethical issues as an employee, and how to lead ethically.
Fraud in the Business World
Fraud is one of many “white-collar crimes” that take place within this world we live. White-collar crime is a crime committed by a person of respectability and high social status in the course of his occupation (Lozano III, n.d.). Since the time that white-collar crime was coin in 1939, technology, extreme financial pressures and opportunity have combined to entice once-respected employees into financials scandals.
Fraud is more prevalent today than in the past. There are companies, such as Enron and WorldCom, engaging in fraud at a corporate level. The media gives these large publicly traded companies plenty of attention. But beyond the public eye, fraud is more pervasive than people realize. It’s estimated that as much as five percent of the gross domestic product is lost to fraud (Lozano III, n.d.).
The types of fraud vary by industry. Skimming the cash before it... [continues]
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