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This can be a very difficult situation to handle. The best reaction to this can depend on your own situation and on exactly how your boss is acting.
For example, imagine that your boss is not asking you to do anything unethical but you believe that they are doing unethical things that do not involve you. The first thing to do in this case would be to look at your company manual to see what is expected of you. It may be that you are required to report suspicions to someone. If so, this is what you clearly must do. If there is no set procedure, you should probably start to keep a record of what you think your boss is doing and of anything you are doing to avoid participating in what you think is unethical behavior. This could be important as a way to defend yourself if your boss is caught. Ultimately, if your boss is doing something that is really unethical, you should probably start looking for other jobs.
It is different if your boss is directly asking you to do things that are unethical and/or illegal. Then, the first thing to do is to present your misgivings and to ask your boss if those actions really are acceptable. If your boss persists and if you still think the actions being asked of you are unethical, ask the boss to specifically give you signed and written instructions of what you are supposed to do. If the actions being asked of you are actually illegal, you should refuse and should document why you are refusing. If demands persist, you will want to quit as soon as possible and find another job.
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