The term white-collar crime was first coined in 1939 and now includes a wide variety of criminal activity. Generally, it is a non-violent, fraudulent, financially motivated crime, committed by corporate or government professionals. It is very often a federal investigation, as these criminal acts that often trigger federal jurisdiction.
This means the investigational firepower is much greater than just Texas. For example, the Securities and Exchange Commission (SEC), the Internal Revenue Service, the U.S. Postal Inspection Service, the Commodity Futures Trading Commission, the Treasury Department’s Financial Crimes Enforcement Network, among others, could all be involved in investigating a single white-collar crime.
White-Collar Crime Definition
White-collar crime derives its name from the professional attire worn by people associated with the crime. People of high socioeconomic status, often in positions of trust, to clients or shareholders. It’s defining characteristic is the use of deceit, concealment, or a violation of trust, without using or threatening to use force or violence. It is done for some sort of financial gain, be it gaining money, property, services, or gaining leverage over another person or business. Greed is seen as the main motivational force.
Companies are capable of committing white-collar crimes, just like an individual. Take, for example, a price-fixing scheme between companies. Their aim is to raise profits and shareholder price, increasing their compensation and the value of the shares they own. Price fixing, however, violates Anti-Trust laws.
Some Common Examples
While white-collar crime encompasses many criminal activities, here’s a closer look at the most common examples and what the FBI focuses on.
Corporate Fraud – This includes falsification or other misrepresentation of financial information, self-dealing, like insider trading, or kickbacks, misuse of corporate property for personal gain, and transactions designed to avoid regulatory oversight by agencies like the Securities and Exchange Commission.
Embezzlement – When someone is entrusted with money for a 3rd party and siphons some off into a personal account, that is embezzlement. It is a breach of trust that can be perpetrated by an individual in a private company, a government official, or a trustee of a fund, to name a few examples.
Ponzi Schemes – In the 1920’s Charles Ponzi made $250,000 (around $3.6 million today) in a mail coupon scheme. Promising high returns at little risk, Ponzi attracted a lot of new investors. Everything went great until the flow of new investors slowed, and older investors wanted to cash out. A number of people have run Ponzi schemes since Charles, most notably Bernie Madoff in 2008.
Money Laundering – Money that has been obtained illegally can be laundered, or cleaned, to come back into circulation. This often involves transferring or purchasing goods or services from a legitimate-looking business. Money laundering inherently involves tax evasion.
Bankruptcy Fraud – When a debtor is faced with insurmountable debt, they can seek bankruptcy protection to wipe their debts clean. This comes at the expense of creditors who will seek a settlement to their debts in a bankruptcy hearing. If a debtor lies or conceals assets in their bankruptcy filing, that is bankruptcy fraud.
Do White-Collar Criminals Get Caught And Punished
While there certainly is a debate that white-collar criminals receive lighter sentences than other convicts, it cannot be debated that there is tremendous oversight that can be brought to bear on a white-collar investigation. As discussed above, there are many agencies that can have overlapping jurisdiction or simply cooperate assertively.
The FBI is particularly active in this area. They investigate any obstruction of justice that may occur in connection with a white-collar crime. They look into anything that impedes an inquiry from the SEC, Commodity Futures Trading Commission, or any other regulatory or law enforcement agency. They have also made a point to partner with other agencies to leverage their relative expertise in tax, pensions, energy, securities, or commodities.
Punishments for white-collar crimes usually involve a combination of imprisonment, fines, restitution, disgorgement, probation, and community service. Following the Enron scandal, the Sarbanes-Oxley Act of 2002 was passed that increased penalties for mail and wire fraud, often part of conducting white-collar crimes. Sentencing in Federal courts is carried out by the judge; there is no jury option. Federal judges must apply a set of complex statutory parameters that can involve mitigating evidence or aggravating factors.
Contact An Experienced White-Collar Attorney Today
If you are being investigated or indicted for a white-collar crime, make sure you find experienced legal counsel. The level of expertise and resources that can be brought to investigate and prosecute your case can be great.
Hire a top Houston area white-collar defense law firm with Vinas & Graham. As former felony prosecutors, they can help advise you through these anxious times with experience on their side. Contact us so you know what to expect and can be vigorously defended. Please feel free to follow on Facebook.