Long Firm Fraud Law and Legal Definition
Long firm fraud is a type of corporate fraud. It is the act of obtaining goods or money on credit by falsely posing as an established business and having no intent to pay for the goods or repay the loan.
A 'Long Firm' is a trading company set up for fraudulent purposes. Initially the company tries to develop a decent credit history to win the trust of suppliers. They do this by placing numerous small orders with wholesalers and ensuring they pay promptly. When the fraudsters are ready, they place several larger orders with the businesses with which they have established a good credit history. Once they receive the goods, the criminals disappear and sell the goods on from various trading places.