Statistics on fraud rates in family-run businesses are scant. This is probably because most family enterprises keep incidents of financial malfeasance under wraps and don’t involve law enforcement or the courts. Because punishing offenders is critical to preventing future fraud, such secrecy can encourage schemes and raise the risk of large financial losses. So although your family business may be different from those run by unrelated individuals, it needs just as many internal controls to prevent bad behavior. Antifraud policies are critical Fraud prevention efforts in family businesses often are hampered by loyalty and affection. One of the biggest potential obstacles is failing to acknowledge that someone in the family could be capable of initiating or overlooking illegal activities. If there’s a black sheep in your flock,...