Business fraud is a very serious matter, and allegations that a company has committed fraud should not be taken lightly. Over the years, there have been many organizations that protect and support employees and individuals who report fraudulent activities. Before reporting fraud to authorities, see if you can talk with your manager or an owner. Higher-ranking personnel within your company may be able to clarify your suspicions. However, if you know for certain there are fraudulent activities going on within a company, you should report them to the proper authorities immediately.
The kind of fraud you suspect or have knowledge is happening will determine how to properly proceed with your report. For instance, securities fraud involving publicly traded securities should be reported to the SEC, where fraud on a more local level may be better reported to the police. Also, your role as either employee or victim will play a role in how your case is handled.
Report the fraudulent activities to state and local authorities. Many police departments have a white-crimes division that can assist in your investigation. A general list of state and local authorities where you may report company fraud includes: local police, district attorney, and state attorney. There may be local organizations, such as local chapters of the Better Business Bureau (BBB), that will assist in these types of investigations.
If known, contact other victims of the fraud. This will allow the victims to protect themselves from recurring fraud and they may be willing to help your cause. Getting another business involved can be useful as they can threaten the fraudulent company with lawsuits. Threats of lawsuits tend to get a quicker reaction than many other ways of reporting.
Federal authorities may get involved, depending on the nature of the fraud. In cases involving unauthorized credit-card charges or other interstate transactions, you may wish to contact the FBI or IRS. Publicly traded companies engaging in accounting or securities fraud may be reported to the Securities Exchange Commission (SEC). There are also nationwide organizations such as the National Whistleblowers that will help you in reporting this level of fraud.
Feel good about your decision to report fraud. Though you may fear losing your job, or are nervous about dealing with law enforcement, you should always feel good about stopping a company from exploiting others through fraud. Additionally, many federal authorities reward whistleblowers with substantial amounts of money for reporting a case that leads to a conviction on fraud.
Be sure to substantiate your claims in some way before getting authorities involved. Collecting evidence before reporting the claim may make it easier for investigators to open a case.
Fraud charges are very serious; be certain of the charges you allege as this type of investigation can be very damaging. It can be hard getting authorities to focus attention on your case, especially if it is not a very large level of fraud, but don't give up. The truth will win.
Irwin Fletcher has been writing since 2008, specializing in legal, finance and business topics. He earned his Bachelor of Business Administration in finance and real estate from Texas Christian University. Fletcher is also pursuing a Juris Doctor, focusing on environmental law, at Vermont Law School.