Small Business Crimes and Scams - Free Enterprise
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Feds Put FedEx on Trial for Illegal Drug Delivery

FedEx is on trial in federal court in California for delivering drugs, among other charges. The delivery giant is accused of knowingly dropping off millions of packages from illicit internet pharmacies, and the prosecution in its opening statement likened the package distributor to a part-time drug dealing operation.

Of course, FedEx can't be held responsible for what people mailed if it did not know that internet pharmacies were delivering illegal items. But federal prosecutors say that they have evidence that FedEx not only knew about the illegal drug deliveries, but worked to keep this type of business and to ensure customers did not switch to the competition, according to Courthouse News Service.

Any small business can be the target of crime, from outsiders or employees. And as small businesses have ramped up their technological know-how, so have scammers. So cybersecurity, credit card fraud, and sham office supply schemes are just a few of the concerns the average business owner needs to add to her already full plate.

Here are seven of the most prevalent small business crimes and scams, and what you can do to protect your small business, from our archives:

Learning From the Rapid Rise and Fall of Startup Billionaires

It's easy to get a complex about not being a billionaire when there are so many of them now, and so young. For example, last year Elizabeth Holmes was on top of the world, worth billions of dollars due to the valuation of her company Theranos. There's also Parker Conrad of Zenefits.

Today both companies are worth substantially less than last year, face criminal accusations, and the founders appear to have deceived people they met on their meteoric rise to the top. What's the takeaway for you in the story of these booming startups that seem to be stalling out?

Corporation Basics: Piercing the Veil and Personal Responsibility

You did your research before going into business, so you know that incorporation protects your personal assets if your business is sued. A corporate officer is not personally liable for the actions of the business, and that is one major reason to incorporate.

This protection is called the corporate veil. But there are situations in which this veil is lifted, or pierced, and liability can attach to individuals. Let's look at examples, as described in the San Francisco Chronicle, of things to avoid doing and not doing so that you stay personally protected.

How to Protect Your Small Business From Embezzlement

Embezzlement occurs in all kinds of businesses, even schools, and the people who do it might surprise you. For example, today the Associated Press reports that a Vermont school principal has been arrested for embezzlement, and local police say they found items in his home that were purchased using school funds.

People steal from all kinds of businesses, even (and sometimes especially) if they hold positions of authority and responsibility, and they do it in a wide range of ways. There is no absolute protection from embezzlement for your business but you can pay attention to some things that will certainly help to prevent it. Here are tips suggested by Entrepreneur that will get you on the right track.

3 Simple Ways to Keep Your Business Safe From Data Breaches

Even if you aren't doing business online, it would be hard to find a business today that doesn't rely on the Internet or exist on the web in some form. As such, cyber security is an increasing concern for businesses and individuals.

The cost from a data loss could be high indeed and you do need to be paying attention to a number of security issues. Here are three simple tips, reported by CIO, to help you to ensure your business's electronic safety.

Beware Ransomware: 3 Simple Electronic Security Tips for Your Business

As a business owner, you know you have to stay on top of a lot of different things. But how much thought do you give to electronic security and scams? If you are not considering this now, you might have to when you find yourself separated from a lot of valuable data while the information is held ransom by hackers.

According to the Associated Press, electronic ransom is all the rage, with hackers increasingly demanding bitcoin payments from unwary users who open their "ransomware" and have to fork over to access their files. Here are three simple steps you can take to avoid becoming a victim.

Just when you thought it was safe to order office supplies ... Well, actually, ordering supplies for your office is probably pretty safe, just as long as you're not ordering from a few unscrupulous vendors in California or Maryland.

The Federal Trade Commission just charged 12 companies in those two states for ripping off non-profit organizations and small businesses, and "tricking them into paying for overpriced office and cleaning supplies they never ordered." So how do you avoid the same fate as some of these victims?

Disruption, Interrupted: CA Regulators Catch Up With Zenefits

Zenefits, a Silicon Valley startup that was valued at $4.5 billion late last year, has been violating California regulations by using insurance agents who were not properly certified. This week, the state's Department of Insurance announced that it is investigating Zenefits, according to the Wall Street Journal.

This prompted the startup's founder and CEO, Parker Conrad, to quit. The new CEO, David Sacks, has changed the company motto and taken responsibility, admitting Zenefits' error. But the WSJ points out that this is just one of many seemingly successful startups that got big by ignoring industry regulations and asks if that's the true secret to Silicon Valley's successes.

Federal prosecutors served Chipotle with a subpoena as part of a criminal investigation into the restaurant's involvement in norovirus outbreak last year. The Department of Justice and the Food and Drug Administration opened the investigation after E. coli outbreaks sickened hundreds of Chipotle customers.

Chipotle's in-store sales and share prices have been plummeting since multiple norovirus outbreaks occurred last fall in California, Massachusetts, Oregon, and Washington.