5 Common Types of Financial Fraud

financial fraud

Financial fraud occurs when a victim is tricked by the perpetrator into agreeing or entering into a transaction involving the promise of delivery of goods, services, or other financial instruments. The catch, however, is that there never was any intent on the part of the perpetrator to fulfill their half of the transaction. As soon as the money exchanges hands, the victim may find themselves empty-handed.

There are ways, however, to prevent unsuspecting folks from being victimized. Or, in the case of a completed financial fraud, they can conduct an investigation to determine how it was pulled off in the first place, and who is responsible for it. 

A financial fraud investigator California can help clients take precautions before signing into any contract, as well as help bring forth any evidence that may be relevant to the case that the victim is building to present to the court.

As financial fraud investigations California reveal, there is more than one way of pulling off financial fraud–several in fact. Here are some of them. 


Bribery pertains to the act of offering cash or anything else of value to a person in authority in order to influence their decisions that could affect the organization. Usually, this is offered by the party that has the most to lose or gain in the situation, and so would go to great lengths to secure or improve what they currently have. 

Under the laws of the United States, bribery is, in fact, expressly prohibited, especially for public officials. 

Identity Theft

Nowadays, practically everyone who has an online presence is at risk of being a victim of identity fraud. It can be as simple as getting charged on your credit for an item you did not purchase, or it could be as severe as having your personal details such as social security number used without your knowledge and consent.

What makes this all the more dangerous is that because they have your personal information, they could basically do anything with it, not just shop with it. Some extreme cases have found individuals at a loss because of all this sudden accumulated debt that they know nothing about, but are now being incessantly hounded by collectors. 


Embezzlement is when money is diverted from the source to another account that has nothing to do with the business operations. This type of crime clearly embodies what it means to commit a crime for personal gains. 

Embezzlement may not necessarily happen quickly. Usually, it runs for a long period of time, with the owner of the embezzled funds not knowing about what’s going on. 

Misappropriation of Funds

If embezzlement is the redirection of funds, misappropriation is wrongly claiming ownership of funds. This can occur in situations wherein another party takes into their possession money or check that is not meant for them. And then they proceed to put it in their account, knowing full well it isn’t theirs to begin with. 

Ponzi Scheme

Ponzi schemes are a type of fraud that involves amassing new investors who will be doing the “business”. Once they start making money, no matter how minimal, it would be given in part to the old members. The catch-all, therefore, is that they will claim that the more members you bring into the organization, the better the potential is for the newcomer to succeed as well.

There are telltale signs that a business model could be a Ponzi scheme, though. They could present you with a highly complex strategy, carry unregistered investments, and more. 

How Can A Private Investigator Help

If you want to prevent falling into the trap of financial fraud, then carrying out financial fraud investigations San Diego before making any commitment is one of the more effective ways to protect yourself. A  San Diego private investigator would know the first steps in assessing a case so they can determine what type of investigation they should employ. They are also very adept at applying skills to successfully get the information they need, without being found out.

They can determine for you if the subject of investigation is in fact someone to be trusted. Don’t be in a hurry to sign on the dotted line. Seek the help of a San Diego CA private investigator to conduct financial fraud investigations California, such as Able Legal Investigations.