Corporate Fraud & Theft
Phoenix Companies
The third type of corporate fraud is Phoenix Companies Fraud. This is normally when a director or directors set up businesses, then wind them up owing substantial amounts of money. The directors then create another company, operating in the same field and often using a similar or even the same company name. Creditors of the original company lose out when the company goes bust. The Directors have no financial responsibility to settle the debts – yet they can start up again with no negative impact.
But once again, businesses can help themselves to avoid getting caught out by a phoenix company fraud.
Make sure you investigate any trade references given and try to ensure that these are truly independent references. Plus, as with the Long Firm Fraud, businesses should carry out a check on the directors themselves, check their history with other companies and with consent, check out their personal credit history.
