When a business starts struggling, both executives and employees might take extreme measures to keep it afloat. People don’t want to lose their job or the business they’ve spent years running.
If your company is going through a hard time, you may feel desperate to save it. You might try to close as many sales as quickly as possible in the hope that the revenue stream will make a difference. In some cases, the fear of the business failing might push the staff to close more sales than usual and help bring the company out of the red.
Unfortunately, even the best sales efforts may fall short of saving a struggling business if it has too much debt or can’t obtain necessary supplies for products. If the company goes under without fulfilling paid orders, it’s possible that the situation could result in fraud charges for workers or executives, possibly at the federal level.
Failing to deliver paid goods is a classic example of fraud
When a consumer or a business completes their end of a transaction to make a purchase, they should receive exactly what they pay for. Struggling companies that aren’t able to ship out paid orders due to lack of materials or other issues should issue refunds to their customers in this kind of situation.
Unfortunately, the company might have had to use the funds from those purchases to cover costs like rent or employee wages. If the company doesn’t make an effort to remedy the situation, the defrauded consumer or business could file a complaint.
Who might be at risk for fraud allegations when the business closes?
If you are just the sales manager, you might think that you would not be the person held legally responsible for the losses suffered by customers when the company shuts down.
However, if you profited from the transactions, either by continuing to fund your paycheck or drawing a commission and you knew when making promises to the customer that there was a good chance the company would not be able to deliver the products, you could possibly face fraud charges.
The same might be true for executives and even sales professionals who failed to disclose information about the company’s solvency or supply issues at the time the customer placed the order. Anyone who intentionally misrepresents a situation or takes money for a transaction they don’t intend to complete could potentially face charges for doing so.