The term “white-collar crime” is a legal term that is used to refer to nonviolent theft crimes that are committed by an individual for financial gain. White-collar crimes are most often motivated by a criminal intent to gain money, gain property, or obtain services in an illegal fashion.
In general, a white-collar crime is a crime that is committed by an individual who is typically in a commercial situation, such as business professionals and government employees. Although any individual may commit and be charged with a white-collar crime, business and government professionals typically have access to the resources necessary to commit white-collar crimes. White-collar crimes most often involve a form of financial theft or fraud.
As time passes, white-collar crimes have grown exponentially as new technology and financial products have created new means of committing such crimes. Additionally, there are multiple new white-collar crimes that have been facilitated by the internet, such as fraudulent emails that request an individual to send a large amount of money to help someone or in exchange for a certain action occurring.
What Are the Different Types of White-Collar Crimes?
As mentioned above, the types of crimes that constitute white-collar crimes have evolved in recent years thanks to advancements in technology. In general, examples of common white-collar crime include:
- Criminal Fraud: Criminal fraud involves a criminal scheme executed by an individual that is intended to cheat or deceive another individual or entity.
- Criminal fraud is done in order for an individual to obtain a financial or similar type of gain.
- According to criminal fraud law, any action that is intended to deceive another through false representation of fact that results in legal detriment to the person who relied on the information could be considered an act of criminal fraud.
- Examples of white-collar criminal fraud include identity theft, forgery, and perjury;
- Embezzlement: Embezzlement is a white-collar crime that occurs when a person who is entrusted to handle the finances of another person or business illegally takes that money for their own personal use.
- The crime of embezzlement is most commonly committed in situations involving an employee with access to their employer’s checks, cash, and/or bank accounts.
- For example, if an accountant or bookkeeper illegally writes a fraudulent check to themselves, steals cash, or withdraws money from business bank accounts to put into their own bank accounts, that would be embezzlement;
- Racketeering: Racketeering is the operation of an illegal business or racket that is generally associated with organized crime.
- Examples of criminal rackets include the importation and sale of illegal drugs, prostitution rings, and gambling.
- Additionally, protection rackets involve a criminal organization that extorts money from businesses for “protection” against crimes that the criminal organization itself would most likely commit;
- Securities Fraud: Securities fraud is any criminal fraud that is used in connection with the sale of a security.
- Securities fraud law is generally intended to prevent anyone from using a scheme to defraud, make untrue statements, and/or fail to make a statement that deceives investors.
- Examples of common white-collar security fraud include theft from manipulation of the market, theft from securities accounts, or insider trading;
- Tax Evasion: Tax evasion is a type of white-collar crime that occurs when a person commits an illegal act that is designed to defraud the Internal Revenue Service (“IRS”).
- The definition of tax evasion is very broad, which means the IRS may pursue an individual for almost any known misstatements on their taxes.
- Tax evasion crimes generally involve an individual or corporation misrepresenting their income to the IRS; and
- Bank Fraud: Bank fraud, one of the most common types of white-collar crime, is fraud against a bank institution.
- There can be many different ways to defraud a bank, such as using fraudulent checks, commercial loan fraud, mortgage fraud, using and depositing counterfeit money, and other financial misrepresentations upon the bank for financial gain.
Other examples of white-collar crimes include, but are not limited to:
- Computer and internet fraud;
- Bankruptcy fraud;
- Bribery;
- Credit card fraud;
- Counterfeiting;
- Trade secret theft;
- Health care fraud;
- Antitrust violations.
Who Enforces White Collar Crime Laws?
White-collar crimes are most often prosecuted by government attorneys, who are known as prosecutors. Depending on the facts and nature of the white-collar crime that was committed by the accused, the person accused of committing a white-collar crime may be prosecuted by an attorney who works in the county attorney’s office, the district attorney’s office, or another federal authority.
If the white-collar crime occurs in a specific jurisdiction, then that jurisdiction’s prosecution office will be the entity that is responsible for the administration of justice against the offender. Further, when determining whether or not a jurisdiction will prosecute the white-collar crime, the prosecution office will often refer to the police report and addendum to analyze the facts of the case and determine what charges, if any, should be filed against the accused.
For white-collar crimes that arise from a felony charge, prosecutors will often use grand juries to make the decision on whether to charge the accused and with what to charge them.
A grand jury is composed of 16 to 23 randomly selected individuals from the community in which the crime allegedly occurred. The individuals selected to be a part of a grand jury will then consider all of the evidence and decide what charges, if any, are to be filed against the offender. This charging document is known as an indictment. It is important to note that at least 12 members of the grand jury must concur in an indictment.
After a grand jury decides whether or not charges should be filed against the offender and what charges to file, the prosecution will then begin gathering evidence to prepare for hearings and a final trial. Additionally, the individual who is accused of the crime will be assigned or have a chance to hire an attorney to represent them in the criminal case.
What Elements Are Required to Prove White Collar Crimes?
The exact elements of white-collar crimes vary from state to state, as well as the exact white-collar crime that the person has been accused of committing. However, in general, the following elements are required to prove white-collar crimes:
- Intent: An individual must have the intent to commit a wrongful act or to achieve a purpose that is inconsistent with a law or public safety.
- The element of intent usually occurs when the defendant acts or commits a behavior or act with the knowledge that the act is unlawful and can be punishable by law;
- Disguise and Concealment: There must also be an element of hiding or concealing of the real purpose of the crime.
- This element usually occurs when the defendant hides or conceals his criminal violation with the purpose of not getting caught;
- Knowledge: For a defendant to be liable for a white-collar crime, the defendant must know that they are committing the crime.
- The knowledge element usually occurs when the defendant knowingly and intentionally commits the act to gain a financial advantage; and
- Reliance: The element of reliance occurs when the victim of the crime relies on the defendant’s fraudulent scheme or acts to their detriment and loses something.
What Are Some Common White-Collar Crimes Examples?
In addition to the above examples, other common white-collar crimes include:
- Ponzi Scheme: When a Ponzi Scheme is being conducted, initial investors are lured in and paid out through new investors.
- False promises of returns or company growth are what sustain the investor’s interest, although no such returns exist, as the money is sourced from new investors only;
- Pyramid Scheme: Pyramid schemes are very similar to a ponzi investment scheme, but in a pyramid scheme, the initial investors recruit two or more investors. They then require each new scheme victim to recruit two or more persons. The only funds that are being used to pay earlier investors come from the new investors.
- Multi-level marketing, or MLM, would be an example of a popular pyramid scheme;
- Kickbacks: Kickbacks are a type of negotiated bribery in which two parties agree to a sum amount.
- This kickback amount will then act as a sort of commission or bribe to one of the parties in exchange for an illegal service and/or transaction;
- Antitrust Violations: Antitrust violations involve the joint participation of two or more companies that engage in a criminal scheme in order to control an industry market and fix prices to their benefit.
What Are Some White Collar Crime Defenses?
Depending on the circumstances of the specific white-collar crime case, as well as which specific crime the individual is being accused of, there may be several defenses to white-collar crime available. One of the most common defenses would be a lack of the required intent to commit the crime.
Another common defense would be entrapment, in which a government agent convinces a person to commit a white-collar crime that they otherwise would never have committed. For instance, authorities frequently use undercover agents in an effort to obtain information associated with white-collar crimes.
Other common examples of legal defenses that may be available in white-collar crime cases include:
- Duress, or that the person accused was forced by someone else to commit the crime;
- Intoxication;
- Incapacity;
- Insanity.
What Are the Penalties for a White-Collar Crime?
If the white-collar crime has violated Federal laws, a federal judge may impose legal penalties according to Federal Sentencing Guidelines. These federal guidelines recommend punishments based on the level of the crime committed, as well as the defendant’s prior criminal history.
It is important to note that the federal sentencing guidelines are not binding on the courts. This means that the judges may choose to ignore the guidelines. However, many federal judges will utilize sentencing guidelines as a basis for the criminal sentences that they give.
In terms of legal penalties for white-collar crimes, there are many different punishments that may be imposed on a person found guilty of committing a white-collar crime, including:
- Compensation payment to the victim;
- Community service;
- Criminal fines;
- Forfeiture of assets, or giving up monetary funds and/or property gained through the crime;
- Restitution, or paying back money that is rightfully owed to another person and/or business;
- Incarceration in either jail or prison, depending on whether the crime is a misdemeanor or a felony; and/or
- Supervised release of probation.
What Else Should I Know About White-Collar Crime Law?
In general, white-collar crime punishments are determined according to the amount of economic damages involved. For instance, if the amount of economic damages involved is less than $500, the crime may be considered petty theft and charged as a misdemeanor.
However, if the amount of economic damages involved is greater than $500, then the crime will likely be charged as a felony. It is important to note that the range of economic damages and limits between misdemeanor and felony charges will differ based on the jurisdiction in which the white-collar crime occurred.
Additionally, legal punishments for white-collar crimes may be determined according to other factors, such as but not limited to:
- The amount of property damage resulting from the commission of the crime;
- The amount of environmental harm caused, such as the amount of harm caused by illegal dumping;
- Whether the crime is considered to be highly offensive to public policies and standards of acceptable conduct, such as defrauding the elderly or disabled;
- Whether the accused party has a criminal history, or if this is their first offense; and
- The number of people who were harmed or involved in the crime scheme.
Seeking Legal Help
If you are facing charges for a white-collar crime, you will need to work with an experienced and local criminal lawyer immediately. An experienced criminal attorney will be best suited to helping you understand your rights and legal options under your state’s specific criminal laws.
Additionally, an experienced criminal defense attorney will also help you determine whether any legal defenses are available to you based on the specifics of your case. Finally, an attorney will also be able to represent you in court as needed.
