When most of us imagine corporate fraud being investigated by a , the first image that springs to mind is executives and CEOs slyly embezzling millions from huge Wall Street corporations. As such, while you confidently run your small business, with its reliable handful of employees, you think “That could never happen to me.”

In reality, however, corporate fraud does not discriminate; of the 88 percent of U.S. companies that reported some type of fraud following the 2008 recession, when rates of fraud began to rise sharply, over half were small to medium sized businesses. Far from protecting against fraud, the tight-knit and informal nature of smaller businesses actually makes them more vulnerable to such issues—fewer staff members means less oversight and a greater illusion of trust, and less resources means that the owners of these firms are hesitant to contact someone such as a New York private investigator even when they do have suspicions.

“Small businesses tend to be very informal in nature. A lot of times they’re either formed with friends or family members, and all the formalities are not in place as they would be in a larger business,” explains Elena N. Lougovskaia, co-founder of Lougovskaia Boop, LLC, a law practice in Cleveland, Ohio, which specializes in business law and commercial litigation. “Employees wear many different hats and perhaps [in addition to hiring a NYC private investigator] decision makers should be separated from people who sign the checks.”

Elena’s advice is based on the fact that, while small to medium sized businesses tend to fear cyber fraud more than any other variety, most fraud is actually internal. According to the Annual Fraud Indicator Report, internal fraud comprised 49 percent of all business fraud in 2013, compared with cybercrime, at 37 percent. Insider fraud tends to involve the theft of assets and accounting frauds, but it can take on many forms, anything from ordering too much stock on purpose to making fraudulent worker’s compensation claims. Be sure to tune into our next blog for more information on preventing insider fraud with corporate surveillance…