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What Is Business Fraud and How Does It Impact My Business?

In any situation, business owners are determined to protect themselves and their business. This means understanding what types of challenges they may face along the way. One thing that isn’t necessarily thought about but may happen is business fraud.

This occurs when an individual or business entity causes deception in order to gain advantage over another party. As a business owner, you may be at risk of this illegal action. Not only is it a criminal act, individuals affected by business fraud may be able to take legal action for compensation to cover losses as a result of the deception.

There are a number of different things that may be considered business fraud. Here are some of the most common types of business fraud that could impact a business.

Embezzlement

While they are different, embezzlement is a type of business fraud that may occur. It is a situation in which an individual takes or misappropriates funds belonging to the employer. Typically, an employee is the one responsible for the embezzlement. However, it must be proved using the following factors:

  • It must be shown that there is a fiduciary relationship between the employee and yourself.

  • It must be shown that the property was acquired by the employee through the relationship.

  • It must be shown that the employee took ownership of the property or transferred the property to someone else.

  • It must be shown that the employee’s actions were intentional.

Embezzlement can occur in many forms. Some employees are content with taking small amounts of money over time, while others take a large sum of money at one time. There are a number of tactics used as well, so understanding the legalities is very important.

Intentional Breach of Contract

In the world of business, contracts are essential to protecting the rights and best interests of those involved. This is especially the case for business owners working with business-to-business transactions, employee-employer contracts, and construction agreements.

These contracts are there to ensure parties perform specific obligations, but a breach means that one side doesn’t live up to their end of the deal. When this is done in an intentional manner, the party negatively affected by the breach may have the right to take legal action and seek compensation for losses caused by the breach.

Securities Fraud

In a securities fraud situation, there are misrepresented, distorted, or withheld information is made regarding the company’s stock or if an officer or director of the company unlawfully discloses information and the recipient of the information acts on it.

For business owners, they may be alleged to be performing securities fraud. In this situation, it’s important to have a strong lawyer on your side to protect yourself, your rights, and your business. Securities fraud allegations can be damaging to your business and your reputation.

How Our Houston Business Fraud Attorney Helps

At Patterson, P.C., our Houston business fraud lawyer has years of experience helping individuals in these serious situations understand their rights and options. You should understand the ways possible to keep your business free of business fraud problems, including losing money and being accused of wrongdoings.

If you’ve been the victim of business fraud, or accused of securities fraud, you have rights. You may be able to pursue legal action to be compensated for losses resulting from the fraud. Let us be the ones to help you move forward and keep your business and reputation safe.

Call our firm today at (713) 489-1215 and let us help you understand what can be done in your situation. We’re ready to help you!

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