White collar crimes: Unseen scourge preying on businesses, economies

19 Apr, 2024 - 00:04 0 Views
White collar crimes: Unseen scourge preying on businesses, economies White collar criminals often exploit their access, authority and the public’s trust to carry out their misdeeds

eBusiness Weekly

Dr Kudzanai Vere

While street-level crimes like robbery and assault often capture public attention, a more insidious form of lawbreaking has been quietly wreaking havoc on businesses, governments and entire economies – white collar crime.

These sophisticated financial misdeeds committed by those in positions of power and trust continue to exact a heavy toll, with experts warning that the problem may be worse than ever.

According to a 2023 report by the Association of Certified Fraud Examiners (ACFE), organisations worldwide lost an estimated $42 billion to various white collar crimes such as embezzlement, asset misappropriation and financial statement fraud.

What’s more disturbing, the study found that the average duration of such schemes was a staggering 18 months before detection.

“White collar criminals often exploit their access, authority and the public’s trust to carry out their misdeeds,” explained ACFE President Dr. Vanessa Hernandez.

“The cascading effects can be devastating, robbing companies of vital resources, undermining investor confidence and destabilising entire economic sectors.”

Nowhere is this more evident than in recent high-profile cases that have rocked industries and households alike.

In 2023, the collapse of a major multinational corporation due to an elaborate accounting scandal resulted in over $5 billion in losses for investors and the elimination of thousands of jobs.

Subsequent investigations later revealed a complex web of fraud, bribery and embezzlement perpetrated by the company’s top executives.

“These crimes do not just impact balance sheets — they destroy lives and livelihoods,” lamented financial crimes analyst, Samantha Ndlovu. “Ordinary people who put their faith and savings into these institutions end up bearing the brunt of the fallout.”

Experts say that while technological advancements have enabled more sophisticated detection and prevention methods, white collar criminals continue to outpace authorities with innovative schemes.

From manipulating cryptocurrencies to exploiting vulnerabilities in cloud-based accounting systems, the adaptability of these offenders remains a major challenge.

“It’s an arms race, plain and simple,” noted FBI Special Agent in Charge Emily Watkins.

“As we develop new tools to combat these crimes, the perpetrators devise even more complex ways to circumvent them. Remaining vigilant and maintaining strong partnerships between law enforcement, regulators and the private sector is crucial.”

Beyond the financial toll, white collar crimes also carry a heavy societal cost. Public trust in institutions and the rule of law can erode, fueling cynicism and undermining the foundations of a healthy economy.

“These crimes do not just steal money — they steal hope,” said Themba Moyo, the chief executive of Zimbabwe’s Financial Intelligence Unit.

“Restoring that hope requires a sustained, coordinated effort to bring these offenders to justice and implement robust safeguards to prevent future occurrences.”

As the world grapples with the ongoing fallout from the Covid-19 pandemic and other global disruptions, experts warn that the threat of white collar crime will only continue to grow.

Vigilance, innovation, and a steadfast commitment to upholding integrity in the financial system will be essential to weathering this unseen storm.

Dr Kudzanai Vere

Dr Kudzanai VERE is a forensic accounting expert with Kudfort Zimbabwe. He has done high level forensic accounting assignments in Zimbabwe and can be contacted on [email protected] or +263772592232

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