An effective and fair criminal justice system encourages respect for law and order and builds public confidence on the criminal investigations units of the government. Criminal investigation involves gathering evidence on the perpetrator of a crime or an intended crime. An assessment of whether a crime has been committed is undertaken as a base of starting investigations. Investigations can either be reactive or proactive. Reactive investigations are applied for the crimes that have already taken place while proactive investigations involve those crimes that have yet to happen or are predicted to occur.
Economic crime involves illegal activities that occur in both private and public sectors especially when there is a weakness that can be exploited by individuals for economic gain. Economic crimes can be broadly classified into fraud, manipulation, theft and corruption. Fraud is the intentional misrepresentation of facts; examples of frauds include bank fraud, hedge fraud, embezzlement, mortgage and credit card fraud. Theft involves acquisition of property without the consent of the victim; examples of theft include identity theft, cash theft and intellectual property crime. Manipulation involves gaining illegal influence over the victim’s activities; examples of this crime include bankruptcy crime, this occurs in the liquation process of a company a debtor can illegally withdraw money from the business.
Bid rigging is a form of manipulation crime, a vendor of a contract has an advantage over a competitor due to some inside information about the tender. Money laundering and currency counterfeiting is an economic crime that affects the national economy and destabilizes the global economic trends. As such, the general welfare of a society is affected. Money laundering involves cleaning the proceeds of a criminal act. As such, the money from criminal activities can be used freely for real estate investments, luxury purchases and private consumption.
Extortion is a crime which occurs when an individual obtains property, money or services from institutions or individuals through coercion. Income tax crime involves failure to comply with the income tax laws. It can either occur as tax evasion or tax avoidance, evasion of taxation is illegal while avoidance is legal. Corruption involves bribery and kickbacks in both private and public institutions.
In economic crimes investigations it is observed that the actions of various individuals affects the way a corporation is managed. As a result the economic returns from these institutions are likely to decline. Economic crimes such as accounting fraud affect the going concern of the organizations it occurs. Investigations show that manipulation of financial information in various business entities is applied to deceive investors and the general public. In most case the financial performance is inflated giving a positive picture about the company. Consequently, most investors end up incurring huge losses; this has a direct effect on the economy.
Insider trading has been of the rise especially in the financial markets. This has seriously affected the trust of the investing public; this is the case especially in the U.S financial markets. Some corporate employees illegally communicate valuable non-public information. As a result in the U.S the FBI has been working with the Securities and Exchange Commission (SEC) to reduce the unfair dealings in the financial markets.
Economic investigations show that most publicly traded companies incur huge losses as a result of falsifying financial accounting entries and raise the portfolio risks facing the institutions. In addition, the companies value declines. The regulatory authorities, U.S department of Justice and U.S law enforcement and regulatory authorities are responsible for addressing economic crimes and provide ensure justice is given to the victims of such crimes.
In a nutshell economic crimes investigations involve falsification of financial information, accounting entries, inflating profits and reduction of losses. There are also illicit transactions that evade the regulatory authorities. Insider trading and misuse of financial information tax evasion and use of organizations property for personal gain results to obstruction of justice.