Skip to content

Workplace Ethics: Why Businesses Should Care

Rotten apple

Running a business comes with many responsibilities. Among them, and perhaps one of the most overlooked tasks, is the ongoing effort to protect it from potential harm. As individuals, we often think that businesses are at risk from external threats: a cyber attack, competitors offering better or cheaper products or services, a national disaster causing businesses to halt operations, etc. And although these external threats can have devastating consequences, we shouldn’t undermine the invaluable importance of keeping businesses safe from a different type of threat: unethical behavior. Corrupt business practices happen daily, often undetected. And yet, not doing something about it can have far worse consequences than any external threat.

Did you know that fraud can be found in a vast array of actions and that it can be prosecuted criminally, civilly, or both? Below are three recent cases that highlight the importance of having a strong ethics and compliance program.


Owner and CEO of Government Contracting Firm Pleads Guilty to Bribery Scheme

Synopsis: The owner and CEO of a government contracting firm pleaded guilty to a bribery scheme with a former contracting officer in which the CEO agreed to and did hire and pay the former contracting officer’s relative in exchange of preferential treatment for various federal procurements. Sentence is scheduled for November 2021 where the CEO faces a maximum penalty of five years in prison.

Impact to the Business: The company filed for bankruptcy in April 2021 and is now permanently closed.


Employee of Government Contractor Pleads Guilty to Fraud and Kickback Charges

Synopsis: Project manager for a government contractor pleaded guilty for his involvement in an overbilling scheme in which the individual received and demanded kickbacks from a subcontractor. He also created fake invoices and set up a shell company to receive the payments. He was sentenced to approximately 30 months in prison, 3 years of probation, and was ordered to pay $309,000 in restitution.

Impact to the Business: The company that employed the project manager fully cooperated with the government from the moment it became aware of the misconduct. As a result, the business entered into a non-prosecution agreement with the Department of Justice that included a commitment to enhancing their compliance program and internal controls.


Construction Company Owners Pleaded Guilty to Defrauding Federal Program Intended Services

Synopsis: Two construction company owners pleaded guilty to defrauding the government by obtaining small-business set aside contracts for which they didn’t qualify. Both men could face up to five years in prison plus $250,000 in fines.

Impact to the Business: The company that was used to fraudulently receive the small-business set aside contracts is now permanently closed.

As you can see from these examples, fraud can occur at any level of the company, regardless of industry, tenure, or rank. Therefore, it is extremely important for businesses to have a strong ethics and compliance program. The following is a quick test that should help assess whether your company has a solid foundation for a strong compliance program. Simply answer yes or no to the following questions:

  • Does your company have a Code of Conduct that is reviewed and updated annually?
  • Does your company offer annual ethics training?
  • Does the training cover clear examples of unethical behavior, where and how to report ethics or compliance concerns, and the steps the company takes to investigate and deter individuals from committing such acts?
  • Does your company have an ethics and compliance reporting system (i.e. hotline)?

And remember, it only takes one bad apple to spoil the whole bushel.

Jose Ortiz

Account Executive

Debbie Ortiz

Brand & Marketing Design Supervisor

Raul Ortiz

Chief Technology Officer

Becky Aquino

Chief Financial Officer

Rey Martinez

Chief Executive Officer