| has gloss | eng: Tunneling is a colloquial term for a specific kind of financial fraud. A group of major shareholders or the management of a publicly traded company orders that company to sell off its assets to a second company at unreasonably low prices. The shareholders or management typically own the second company outright, and thus profit from the otherwise disastrous sale. Tunneling differs from outright theft because people who engage in tunneling generally comply with all of the relevant legal procedures; it is thus a subtler scheme than simply writing checks from a company to a private bank account. While people widely agree that tunneling is unethical, penalties for tunneling vary widely; some states impose criminal sanctions, whereas other states provide either for civil suits only, or for no sanctions at all. |