White Collar Crimes

According to the FBI, “white-collar crime” was coined in 1939. Since then, it has been used to describe several criminal behaviors, including fraud, corruption, and money laundering. Over the last decade, advances in digital technology and our increasing dependence on the internet have extended the range of white-collar offenses, allowing anyone to become a victim.

While no precise data are available, aggregate statistics reveal that the rate of white-collar crime has been on the rise in recent years. This is likely due to several factors, including the continued globalization of business, the increased complexity of financial transactions, and the prevalence of sophisticated cybercrime.

In this blog post, we will look at what white-collar crime is and some of the most common types of offenses. We will also discuss the potential consequences of white-collar convictions and how to defend against these charges.

What Is a White Collar Crime?

A white-collar crime is any non-violent illegal activity that occurs in a business or professional setting. These crimes are typically committed by people who have access to large sums of money and use their position of power to gain more money or property illegally.

There are many different types of white-collar crimes, but some of the most common include bribery, money laundering, embezzlement, fraud, insider trading, tax evasion, and Ponzi schemes. Many white-collar offenses are clearly illegal, while others are a little less obvious. For instance, insider trading is a white-collar crime that is only illegal if the person doing it does not disclose their insider information to the people they are trading with.

Types of White-Collar Crime

There are many different types of white-collar crime, but some of the most common include:

Bribery

Bribery is the act of giving or receiving something of value to influence an individual’s actions. Bribery is often used to gain an advantage in business or politics.

According to the World Economic Forum, corruption costs the global economy $3.6 trillion each year. Bribes scandals became more prevalent at the end of the 20th century, prompting several jurisdictions to pass cross-border anti-corruption measures. Within the framework of these laws, corporate regulatory pressure to prevent bribery has increased a lot.

Money laundering

Money laundering is the process of making dirty money look clean. It’s typically done by moving money through a series of bank accounts or shell companies, and it’s often used to finance terrorist organizations or drug cartels.

Money laundering is a necessary service, especially for those who deal with enormous amounts of money. In money laundering investigations, the focus usually turns on the laundering itself and the criminal activity from which the laundered funds were derived.

Some of the common ways criminals launder money are:

• Structuring: This is when a criminal breaks up large sums of cash into smaller deposits in an effort to avoid detection.
• Smurfing: This is when a criminal uses multiple people (or “smurfs”) to make small deposits into different bank accounts, again to avoid detection.
• Trade-based laundering: This is when criminals use goods and services to launder money. For example, they may buy high-priced items with cash and then resell them for less than their market value.

Embezzlement

Embezzlement is the act of dishonestly appropriating funds that have been entrusted to you. This can happen in various ways but typically involves someone in a position of power misusing company funds for personal gain. For example, if an employee steals money from their employer, or a person steals money from a charity they are volunteering for.

Fraud

Fraud is a broad category that encompasses many different types of white-collar crime. It generally involves misrepresenting oneself to gain something of value. For example, someone might commit fraud by lying on their resume to get a job or creating fake invoices to obtain reimbursement for personal expenses.

Fraud can also be committed through identity theft, which is when someone uses another person’s personal information (like their Social Security number or credit card information) without their permission in order to commit a crime. Identity theft can be used to open new lines of credit, make unauthorized charges, or even commit tax fraud. Consumers lost more than $3.4 billion to fraud in 2020, according to the FTC, compared to $1.8 billion in 2019.

Insider Trading

This white-collar crime refers to the illegal practice of using information that is not publicly available to make investment decisions. It is considered a federal offense and can result in criminal and civil penalties.

Examples of insider trading include:

• When a company executive buys or sells stock based on information that is not available to the public
• When an employee of a financial institution trades stock based on information that they have access to as a result of their job
• When someone with access to nonpublic information about a company tipping off friends or family about an impending merger or acquisition

Penalties for insider trading can be severe and can include: Fines, imprisonment, or civil liability.

If you are under investigation for insider trading, it is crucial to contact a white-collar criminal defense attorney as soon as possible.

Tax Evasion

One of the most common white-collar crimes is tax evasion. This is when a person or business illegally avoids paying taxes to the government. Tax evasion is a serious crime resulting in heavy fines and even jail time. Tax evasion can be done in several ways, including failing to report income, claiming false deductions, and hiding assets or income in offshore accounts.

Ponzi Scheme

Ponzi schemes are white-collar crimes that involve promising investors high returns on their investment, but instead of investing the money, the organizer uses new investor funds to pay off older investors. This type of scheme can quickly collapse when there is not enough new investment to keep up with the payments. Bernard Madoff is a well-known example of someone who ran a Ponzi scheme. He was sentenced to 150 years in prison for his crimes.

White-Collar Crime Crime Penalties & Punishments

While white-collar crimes may not involve violence, they can have serious consequences. Victims of white-collar crime can suffer significant financial losses, and the damage to their reputation can be long-lasting.

Those convicted of white-collar crimes may face significant penalties, including imprisonment, community service, probation, fines, restitution, and giving up illegal profits, known as “disgorgement.” In some cases, a white-collar criminal conviction can also lead to the loss of professional licenses and the ability to obtain future employment.

Both state and federal legislation defines white-collar criminal offenses. The authority of the federal government to regulate white-collar crimes is stated in the US Constitution’s Trade Clause. White-collar criminal law is enforced by various federal agencies, including the FBI, Securities, and Exchange Commission (SEC), and Internal Revenue Service (IRS). In addition, most states have white-collar criminal laws and enforcement agencies.

Get a White Collar Crime Defense Lawyer

White-collar crime is a term used to describe a wide range of criminal offenses that business professionals and government employees typically commit. The crimes can be prosecuted at the state or federal level and often involve complex financial transactions or schemes.

If you’ve been accused of committing a white-collar crime, it’s important to speak with an experienced criminal defense attorney as soon as possible. Get a free case evaluation today to learn more about your legal options and how we can help you fight the charges against you.