Example:

A truck driver delivering materials to a construction site is stopped at a police roadblock.  The policeman is armed and acting in a threatening manner.  The policeman tells the driver that the vehicle has defective tyres, and that the driver will be arrested for driving a dangerous vehicle and held in the police cell over night.  However, the policeman states that if the driver pays him $20, he will be let through.  The driver knows that his vehicle tyres are in good condition, and that the $20 is not a legitimate payment.  However, he fears for his safety, and what could happen to him in a cell overnight.  He therefore makes the payment and is let through the roadblock.

Explanation:

This type of incident can be common in some countries.   In this case the driver can legitimately claim that he feared for his personal safety if he did not make the payment.  Under many countries’ laws, it is a defence to make an extorted payment if you legitimately fear for your safety.  So, it would be unlikely that the driver has committed a crime.  The policeman would be guilty of extortion and abuse of power.

The driver should report the incident to his employer as soon as possible.  Neither the driver nor the employer should conceal the payment by pretending it was a legitimate expense.  This could then constitute an accounting offence (false statement of the nature of the payment) and a tax offence (as illegal payments normally cannot be deducted from income in calculating tax due).  Depending on the country’s laws and on whether it is safe to do so, it is better to record it correctly in the accounts as an extorted payment, and consideration should be given to reporting the matter to the authorities.