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White Collar Crime

White Collar Crime

The term “white-collar crime” is used to refer to nonviolent crimes that are generally committed for financial gain. According to the FBI, “these crimes are characterized by deceit, concealment, or violation of trust.” These crimes are generally motivated by either gaining money, or avoiding losing money, property, or services. However, they may also be motivated by a need to secure a personal and/or business advantage.

The term itself is defined as a “crime committed by a person of respectability and high social status in the course of his occupation.” Historically, white-collar workers have historically been defined by office jobs and management, while blue-collar workers traditionally wore blue shirts while working in more physically demanding jobs.

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 are facilitated by the internet, such as fraudulent emails requesting help by sending a substantial amount of money.

Some definitions of white-collar crime only include offenses by an individual, in order to benefit themselves. However, the FBI defines these crimes as including “large-scale fraud perpetrated by many throughout a corporate or government institution.” The agency names corporate crime as among its highest enforcement priorities, because these crimes cause significant financial losses to investors. Additionally, the FBI states that these crimes have the potential to cause considerable damage to the U.S. economy, as well as investor confidence.

Examples Of White Collar Crime

There are a wide variety of crimes that would constitute white collar crime. In general, some of the most common examples of white collar crime include:

  • Criminal Fraud: Criminal fraud involves a scheme intended to cheat or deceive another individual or entity. This is done in order 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, resulting in legal detriment to the person who relied on the information, could be considered an act of criminal fraud. Just a few specific examples of criminal fraud include identity theft, forgery, and perjury;
  • Embezzlement: Embezzlement 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 is most commonly committed in situations involving an employee with access to their employer's checks, cash, and/or bank accounts.
    • An example of this would be if an accountant or bookkeeper illegally writes a check to themselves, steals cash, or withdraws money from business bank accounts to put into their own bank accounts;
  • Racketeering: Racketeering is the operation of an illegal business, or racket, generally associated with organized crime. A few examples of criminal rackets include the importation and sale of illegal drugs, prostitution rings, and gambling. Additionally, protection rackets involve a criminal organization extorting money from businesses for “protection” against crimes, which would most likely be committed by the criminal organization itself;
  • Securities Fraud: Securities fraud is any 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. The crime can also include theft from manipulation of the market, as well as theft from securities accounts; and/or
  • Tax Evasion: Tax evasion occurs when a person commits an act that is designed to defraud the Internal Revenue Service (“IRS”). The definition of tax evasion is very broad, so that the IRS may pursue an individual for almost any known misstatements on their taxes. Tax evasion generally involves an individual or corporation misrepresenting their income to the IRS.

Other examples of white collar crime include:

  • Computer and internet fraud;
  • Bankruptcy fraud;
  • Bribery;
  • Credit card fraud;
  • Counterfeiting;
  • Trade secret theft;
  • Health care fraud;
  • Insider trading; and
  • Antitrust violations.

Agencies That Investigate White Collar Crimes

Agents of many different Federal agencies are frequently involved in white collar crime investigations. This includes, but may not be limited to:

  • The Federal Bureau of Investigation (“FBI”);
  • Internal Revenue Services (“IRS”);
  • Securities and Exchange Commission (“SEC”); and
  • The U.S. Treasury.

Because so many different agencies are involved, white collar crime investigations can frequently be extensive and complex.

An investigation could be ordered even if you yourself are not suspected of committing a white collar crime. An example of this would be how your business might be investigated because it was mentioned by a witness or informant involved in an ongoing trial. You may also be subject to investigation if your business:

  • Received a subpoena in a grand jury trial, instructing you to produce business records and/or to supply a witness in trial;
  • Was presented with a valid search and seizure warrant in order to obtain relevant documents;
  • Has been contacted by a government agent who wishes to question an employee of yours; and/or
  • Recently received a “subject letter” or “target letter,” which states that an investigation is necessary for whatever reason.

If your business is the subject of a white collar crime investigation, it is very important that you respond honestly. Additionally, while you are expected to cooperate with investigators, it is imperative that you do not incriminate yourself in the process. As such, you should contact an attorney as soon as possible for advice when dealing with investigators.

It is important to remember that any information that you disclose to an investigating agent can and will be used against you in a court of law. A lawyer can inform you of which confidential business documents are protected from seizure under business laws, and you can make your participating decisions based on that information.

Who Prosecutes White Collar Crimes?

Most white collar crimes are prosecuted by government attorneys, who are known as prosecutors. Depending on the facts and nature of the white collar crime that was committed, an individual may be prosecuted by an attorney that works in the county attorney's office, the district attorney's office, or other federal authority.

If the white collar crime is based in a specific jurisdiction, that jurisdiction's prosecution office will be responsible for the administration of justice against the offender. When determining whether or not a jurisdiction will prosecute the white collar crime, they will often refer to the police report and addendum to analyze the facts of the case, and determine what charges (if any) they will file.

For white collar crimes that arise to a felony, prosecutors often will use grand juries to make the charging decisions. A grand jury is composed of 16 to 23 randomly selected individuals from the community. The individuals selected to be a part of a grand jury will consider all of the evidence and decide what (if any) charges are to be filed against the offender. It is important to note that at least 12 members must concur in an indictment.

After the grand jury decides what charges to file against the offender, the prosecution will then begin gathering evidence to prepare for hearings and a final trial. Additionally, the party accused of the crime will be assigned or have a chance to hire an attorney to represent them in the criminal case.

Defending Against Allegations Of White Collar Crime

Depending on the circumstances of your specific case, as well as which specific crime you are being accused of, there may be several defenses to white collar crime available to you. 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 crime that they otherwise would never have committed. Authorities frequently use undercover agents in an effort to obtain information associated with white collar crimes.

Some other examples of defenses that may be available to you include:

  • Duress, or that you were forced by someone else to commit the crime;
  • Intoxication;
  • Incapacity; and
  • Insanity.

If the white collar crime has violated Federal laws, a judge may impose penalties according to Federal Sentencing Guidelines. These 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 guidelines are not binding on the courts, although many federal judges will use them as a basis for the sentences that they give.

Federal sentencing guidelines intended to make sentencing fairer. An example of this would be how the guidelines ignore factors such as the race or economic status of the defendant, which has helped limit sentencing disparity.

Additionally, these guidelines generally make sentencing more predictable and transparent. Prior to the introduction of the guidelines, sentencing varied widely from judge to judge. Because the guidelines are available for anyone to see, they have made the process of federal sentencing considerably more open and less mysterious.

Punishments for White Collar Crimes

Generally speaking, white collar crime punishments are determined according to the amount of economic damages involved. For example, 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 jurisdiction.

Additionally, 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.

White collar crimes are serious offenses that are usually tried in Federal court. However, as noted above, depending on the jurisdiction of the crime, they may also be tried in local court. Generally speaking, penalties for violations of white collar crime laws can include but may not be limited to:

  • Fines of up to $1,000 for misdemeanor offenses, or heavy fines of up to $10,000 or more for felony offenses;
  • Imprisonment for less than 1 year for misdemeanor offenses, or imprisonment for 10 years or more for felony offenses;
  • Forfeiture of all assets, monetary funds and/or property;
  • Restitution, that is, paying back money that rightfully belonged to another person or business;
  • Loss of licensure, loss of right to vote, loss of right to possess a firearm (if the crime is charged as a felony); and/or
  • Supervised release, probation, or home arrest.

What Else Should I Know About White Collar Crimes?

For felony white collar crimes, prosecutors sometimes have grand juries make the charging decisions. These are 15-23 randomly selected people who consider the evidence, and decide if and what charges should be filed. At the same time, the prosecution and defense both gather evidence and prepare for hearings and trial.

In terms of legal penalties for white collar crimes, there are different punishments that may be imposed:

  • Compensation payment to victim;
  • Community service;
  • Criminal fines;
  • Incarceration in either jail or prison, depending on whether the crime is a misdemeanor or a felony; and/or
  • Probation.

How Can An Attorney Help Me With a White Collar Crime?

If you are being accused of committing a white collar crime, you will need to consult with an area criminal defense attorney.

An experienced and local lawyer will be best suited to helping you understand your state's specific laws regarding the matter, and what your legal rights and options are under those laws. Additionally, they will also be able to represent you in court, as needed.

Call our office today at 212-994-7777 or complete the convenient online contact form to set up a consultation.