Scammer Alert! Protect Yourself from Allegations of Fraud

As the pandemic continues to rage around the world, governments are scrambling for strategies to grow their economy. Some have eased lockdown restrictions to allow businesses to open, while some countries are providing government aid or grants to entities and individuals affected by the pandemic.

For many small businesses, it seems like the government is giving free money. But that is not the case. When the government provides individuals and companies with a grant, government bodies such as the Federal Trade Commission (FTC) and even the Food and Drug Administration (FDA) work together to check for fraud and possible scams.

Government Aid Is Ready

The U.S. government is planning to release one trillion dollars to aid businesses affected by COVID-19. But this also means that the money grants will be subject to strict checks and audits. Companies used to reckless bookkeeping practices could be charged with false claims and could result in hefty penalties. 

Any company receiving government grants need to use that money to attain the objectives they identified. Every dollar should be used for its intended purpose, and recipients must account for every expenditure. Even if the 'fraud' were a simple accounting error in a company's bookkeeping, the government would still investigate to check if the recipient only needed a Quickbooks tune-up for their ledgers or committed a civil crime against the government. 

Grant Fraud Comes in Many Forms

But what would constitute fraud in the government's eyes? These could include deliberate lies and falsification, such as providing false information in the grant application or replacing approved materials with cheap substitutes. But they could also include poor decisions in bookkeeping, such as including personal expenses as part of the grant or charging for costs that were not incurred during that time. 

But individuals could also become victims. Some scammers pretend they work for the government and try to steal personal information or even ask for money to process the grant. The US Department of Health and Human Services says that no federal employee is authorized to inform individuals of a successful grant application or even ask for a processing fee.

Record All Government Transactions

keeping records

Many companies should keep a strict record of all government transactions if hey receive a grant. Complete and accurate records of books and government correspondences would ensure that their claims are correct and complete at the time when the grant was awarded and used. These same records could also serve as supporting evidence in case allegations of fraud or misconduct are raised.

Troubled Times Require Clear Record-keeping

For many people, the pandemic is a worldwide catastrophe that continues to devastate families, businesses, and countries. The economic effect worldwide is staggering, and many people have lost work due to business closures. But for some opportunistic individuals, it is time to take advantage of the government and ordinary citizens. The government is preparing to help anyone who wants to rebuild after the pandemic. Still, they are also ready to take down anyone that tries to take advantage of the situation.