You work hard to build your assets.
It’s important to be aware of the common types of personal and
business fraud, and the best ways to protect your assets.
JOE EPPS, CPA/CFF/ABV, CFE, CVA, PRESIDENT
EPPS FORENSIC CONSULTING PLLC
Please call or email me directly with your questions regarding this
article or to discuss your financial expert witness needs.
How to Protect Your Personal
and Business Assets
One very secure way to protect assets
is to pay off debt; particularly credit
Secure Way to Protect Assets
If we use our savings to pay off debt,
we receive an immediate return on
that investment with no risk.
An article in Yahoo Finance indicated that the average credit card interest rate is almost 15%. This means
that paying down credit card debt
could provide an effective return of
15%. There is likely no investment
we could make that would provide us
a guaranteed 15% return with no risk.
Higher Returns Bring Higher Risk
While paying down debt is an effective and totally secure way of invest-ing our money, many would like to
earn a greater return. However, higher
returns bring higher risk. In the quest
for higher returns on investments,
we may turn to opportunities presented outside publicly-traded stock or
bonds. When we do so, we are at risk
of falling prey to fraud.
Tips to Avoid Fraud:
n Often the investments that
also the most attractive for
n Get the details in writing.
Legitimate companies will be
happy to provide all the infor-
mation you request.
n Don’t agree to anything on the
spot. Pressure to act immediately
is a danger sign of fraud.
n Do your homework. If you don’t
understand how the investment
will make money, as well as the
risk to what you expect to earn
and the risk of losing part or all
of your investment, don’t make
n Testimonials from strangers
about a great investment
opportunity may actually be
con artists trying to lure you
into an investment scam.
n Be especially wary of invest-
ments in commodities. Crooks
often promise that the value of
investments in coins, precious
metals, artwork, oil leases, gem-
stones, and other commodities
will rise. The truth is that the
value of these types of invest-
ments can go up or down
n Be especially cautious about
emails for investments. Many
unsolicited emails are fraudulent.
Small Businesses Victimized
Fraud impacts individuals of all economic levels and businesses of all size.
The tips provided above are focused primarily on individuals. However,
owners of small businesses must be
According to the ACFE 2014 Global
Fraud Study, small businesses (fewer
than 100 employees) were victimized
in the greatest percentage of report-
ed fraud cases. The average overall
impact was in excess of $150,000.
How to Minimize Fraud Risk
The best strategy for a small business
to minimize fraud risk is to speak with
their CPA or another professional who
understands internal accounting controls and fraud risk. Even the smallest
business can take steps to minimize
the potential to be defrauded.
Avoiding Payment Fraud
Small businesses are particularly susceptible to payment fraud, which can
take many forms. It commonly involves one of these three tactics: an
employee forging a signature on a
check; an employee issuing improper
checks for their own benefit; or the
establishment of a fake vendor.
Lessening payment fraud risk can be
achieved by the owner simply looking
at canceled checks, especially checks
that appear unusual and checks for
new vendors. The fraud deterrence is
achieved in part by making sure employees with access to checks and the
books know that the owner is looking
at the checks. Make it a point to ask
some questions. The specific questions do not need to be about suspicious payments; the point is to keep
the employee aware that the owner is
reviewing the checks.
– Special thanks to Joe Dickerson, CFE, CFI, CEO of Financial Forensic Services, LLC, who contributed to this article. –