Helping companies do the best possible due diligence

Fraud Prevention

There are countless financial instruments, business documents and corporate/financial structures which are legitimate and have value. However, the con man, huckster, fraudster and scammer will use everyone and everything to part you from your money. And some legitimate systems are abused or simply overused. Here are a few recommendations to try to stay away from frauds and scams:

• Take your time. The fraudster needs you to make a decision on the spot. If you are being rushed aggressively, slow down even more, or just stop right there.
• Check out every claim made in sales calls, written documentation and every website connected to the company.
• Do a web search on each person and each company name. A lot of people think Google is the place to go. Google is great, but remember, there are a huge number of search systems.
• Call your state's securities regulatory office and check if the party has violated securities laws.
• If someone claims to be an expert in something that sounds too good, and especially if your attorney, accountant or financial planner never heard of the program before, cross check with people you know to be true experts in the area, although the best course of action is to simply say no and move on.
• Maintain adequate internal controls to prevent internal frauds, especially when going through major corporate changes.
• The most successful frauds are schemes where many people are involved, and perhaps only one person knows all of the details, and multiple locations are involved. Keep looking until you find all the parts.
• Hire competent, respected and professional attorneys, accountants, and auditors, and bring in specialists on all major corporate actions.
• Does the company have a phone number that works? Call it. Also, call the phone company's Information line and check if the phone number is for the same company.
• Call the local Attorney General Office.
• Never send money to a PO Box, unless you already know the firm.
• Don’t buy anything from a new supplier or vendor until you have verified that the company exists and, ideally, check their reputation.
• Never give out office equipment information unless you already know the party.
• Email us. We will let you know if they are in our database of over 35,000 individuals and firms that we have collected in the last 25+ years.

The best advice: "If it sounds too good to be true….."

A Few Fraud Prevention Resources:

Federal Bureau of Investigation (FBI)

Financial Crimes Enforcement Network (FINCEN)

Internal Revenue Service: Criminal Investigation Division (CID)

National Inventor Fraud Center

Secret Service: Financial Crimes Division
U.S. Postal Inspection Service

Securities & Exchange Commission (SEC)

The Better Business Bureau: Alerts

National Fraud Information Center

Due Diligence, Inc. 

Next: Fraud Prevention, Part 2: Compiled List of Business-Related Frauds & Scams

                                Charles F. Bacon, CEO & Keeper of the Vision
                                charlesbacon@superdiligence.com
                                Due Diligence, Inc.