#fraud-prevention
Fraud Prevention
Proactive strategies and controls to prevent financial fraud in your business
Freight Broker Bookkeeping: Factoring Fees, Quick Pay, and the $700 Million Double-Brokering Problem
Freight brokers earn the spread between shipper billings and carrier cost — not gross freight value. How to book factoring (a receivable sale at 1–5% recourse, 2.5–5% non-recourse), separate quick pay discounts, track the $75,000 BMC-84/BMC-85 requirement, and use AP discipline to catch double-brokering fraud, now a $500–$700 million annual industry loss.
United States v. Castro: What a Tax Preparer's 188-Month Sentence Means If Someone Else Signs Your Return
The Fifth Circuit affirmed a 188-month sentence for tax preparer John Anthony Castro, whose fabricated Schedule C and Schedule A deductions caused an estimated $15.2 million tax loss across 200-plus clients. Clients remain legally liable for falsified returns — here are six checks to vet a preparer, plus how Forms 14157 and 14157-A report misconduct.
Visa Just Cut Your Chargeback Tolerance by a Third: What the 1.5% VAMP Threshold Means for Small Merchants
On April 1, 2026, Visa's VAMP program cut the merchant fraud-and-dispute threshold from 2.2% to 1.5% in the US, Canada, EU, and Asia-Pacific. Here's how the (TC40 + TC15) ÷ settled transactions ratio works, the 1,500-event monthly floor, the $8-per-transaction penalty, and six concrete steps to stay under the line.
The FTC's Fake-Review Crackdown: What the Consumer Review Rule Means for Your Small Business
The FTC's Consumer Review Rule (16 C.F.R. Part 465) took effect October 21, 2024, and in December 2025 the agency sent its first warning letters — with civil penalties of up to $53,088 per violation and no small-business exemption. A practical guide to the six prohibited practices, from rating-conditioned rewards to review gating, and a five-step compliance checklist owners can finish in a week.
Hee v. Commissioner: How $2 Million in Personal Expenses Became Constructive Dividends and a 75% Fraud Penalty
In Hee v. Commissioner, the Tax Court found a sole shareholder ran over $2 million in personal costs — massages coded as consulting, MIT tuition, family vacations, and $1.1 million in undocumented loans — through his corporation, upholding a 75% civil fraud penalty under IRC Section 6663 and offering small-business owners a checklist for shareholder loans, related-party pay, and expense substantiation.
Used Cooking Oil Collection: A Bookkeeping Guide for a Commodity Business on Wheels
A single 50-gallon barrel of used cooking oil is worth $100-185 to a biodiesel refiner, so collectors must book collected-but-unsold oil as inventory-in-transit, track actual weighed pounds per stop rather than estimates, and reconcile collected-to-shipped volume weekly to catch theft and double-invoicing before it erodes route profitability.
FedNow and Instant Payments Are Changing Small Business Treasury: What ISO 20022 Means for Your Books in 2026
FedNow and RTP now reach roughly 75% of U.S. bank accounts, settling payments in seconds, 24/7/365, with a $10 million network transaction limit. This guide explains how ISO 20022 structured remittance data changes invoice matching and reconciliation, why irrevocable instant payments demand wire-transfer-level fraud controls, and what small businesses should ask their bank and accounting software in 2026.
KPMG Australia Cut Partner Pay 20% Over an Ethics Scandal. Here's How to Vet Your Own Accountant.
KPMG Australia is preparing to cut over 1,000 of roughly 10,000 jobs and reduce partner pay by up to 20% after admitting it mishandled a 2024 whistleblower complaint alleging misuse of confidential client data. The same five independence threats behind the scandal — self-interest, self-review, advocacy, familiarity, and intimidation — apply to any local CPA firm, and this guide covers the red flags plus a five-step due-diligence checklist (license lookup, peer review report, references, commission disclosure, engagement-letter scope) for vetting your own accountant.
Chase's New Passkey and Trusted Contact Features: A Small Business Security Guide
Chase rolled out passkey login and a Trusted Contact Person feature in early 2026 to counter AI voice-cloning fraud, which costs small businesses $30,000 to $400,000 per incident on average.
Private School Bookkeeping: Deferred Tuition and Fund Accounting Explained
Private school tuition is an exchange transaction under ASC 606, not a donation, so tuition collected before the school year starts must be booked as deferred revenue and recognized ratably over 10 or 12 months, while donor-restricted gifts follow separate ASC 958 rules.
Financial Scams Targeting Small Businesses: The Warning Signs Before the Wire Goes Out
The FBI's IC3 logged $3.05 billion in business email compromise losses in 2025, and only 25% of small businesses have a whistleblower reporting mechanism versus 85% of large companies — here's how vendor impersonation, payroll diversion, and check fraud unfold, and the controls that stop them before a wire goes out.
Bill.com vs. Melio vs. Ramp: Which AP Tool Fits Your Business?
A side-by-side comparison of Bill.com, Melio, and Ramp for accounts-payable automation — pricing, ERP integrations, AI invoice coding, and which tool fits businesses by invoice volume and approval complexity.