The Crime of Misuse Company Funds
Some would argue that the buyers of the fakes would not have bought the genuine item but that is a very narrow argument and can only apply to a small segment of luxury goods. Many counterfeit products today are of higher quality and compete directly with the genuine items. In addition, consumers who are cheated into trusting that they bought a authentic article when it was actually a fake, charge the producer of the product when it fails, making a loss of concern. Even cheaper and obvious copies that are bought in good faith represent a serious threat to the company that wants its brands associated with quality and exclusivity. Thirdly, beside direct losses of sales and goodwill, one should not forget the expenditure involved in protecting and enforcing intellectual property rights. The right owner becomes involved in costly investigations and litigation when combating counterfeiters and may also have to spend further sums on product protection. The budget for anti-counterfeiting is rarely well defined within an organisation, but spans across several departments such as marketing, human resources, product development and legal departments. Such countries suffer both tangible and intangible losses. First, foreign producers of reputable products become reluctant to manufacture their products in countries where counterfeiting is rife as they cannot rely on the enforcement of their intellectual property rights. Hence, such countries not only lose direct foreign investment but also miss out on foreign know-how. Second, if many products from such countries, including genuine ones, gain a reputation of being of poor quality, this will cause export losses which in turn implies both job losses and loss of foreign exchange. It could be argued that the counterfeiting industry creates jobs but these jobs are often poorly paid, often involve substandard working conditions and sometimes use child labour. Third, the foundation for new business development in a country is the existence of a legal system to protect the rights of the entrepreneur and to promote fair competition. The prevalence of counterfeiters in a market discourages inventiveness in that country since it deters honest producers from investing resources in new products and market development. A further direct loss for the government of countries that become havens for counterfeiters, are tax losses, since the counterfeits are normally sold through clandestine channels and counterfeiters are not generally keen to pay tax on their ill-gotten gains. Fiscal losses are increasingly shown to justify action by enforcement officials.
This is very different from swindling in that swindling refers to using false pretense or lies and cheating so as to obtain property in a wrong manner. In this case, when the transfer of ownership is done, this makes the swindler to make a transfer to the wrong person of the property. It can be done by one or more individuals who are professionals, nonprofessionals, or just people of lower ranking.
By doing that, the company will run their businesses in ethical way and those unethical issues such as embezzlement of fund, inappropriate employees discharge, giving or receiving bribes, and also accounting fraud will not happen again or at least will be decrease.
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