White-collar crimes are illegal activities that are nonviolent and are characterized by a focus on achieving financial gain. White collar crimes are usually committed by business professionals and government employees. Although anybody can commit a white-collar crime, these professionals typically have access to the resources necessary to carry out white-collar crimes.
Most types of white-collar crime tend to involve some type of fraudulent scam or activity. Below are descriptions of common types of white-collar crimes:
- Fraud: Fraud involves deceiving someone for some type of monetary gain. Fraud often centers around financial transactions in a corporate or business setting.
- Securities Fraud: White-collar crimes are most common in a corporate setting that involves securities, stocks, and bonds. One common type of white collar-crime is "insider trading" in which someone who has inside confidential information about the companies investments trades or shares that information in violation of their duty to the company.
- Misrepresentation: Another type of securities fraud is when a person knowingly misstates or misrepresents inside information about the companies investments and finances, which causes investors to be lured by the false and misleading information. This causes the investors to rely on that information when making business and financial decisions.
- Embezzlement: This type of white-collar crimes involves a person who has been entrusted legal authority over some type of property or money who then improperly takes that money from that person for his or her financial gain. For example, a manager at a store that embezzles the money entrusted in him by transferring or taking that money and placing it in his own personal account without authorization of the store.
- Tax Evasion: Tax evasion occurs when a person tries to avoid paying the required taxes that they owe to the IRS. Any scheme or activity done knowingly and intentionally to avoid paying taxes is considered tax evasion.
- Money Laundering: Money laundering is a criminal act that is done by taking money that was gained by illegal means and converting it into a series of transactions to make it appear that it was gained legitimately. It is basically taking "dirty" money and filtering it into "clean" money. For example, a drug dealer who makes money illegally who takes that money and filtering into a legitimate business and making it appear like the business made this money, and not the sale of drugs.
- Bribery: This type of criminal act is done by offering money or property with the intention of influencing the actions of another.
- Bankruptcy Fraud: This occurs when a corporation or business lies and misrepresents to creditors who they owe money about the assets and debts that they have in order to avoid paying the creditors or having the creditors reach this type of asset.
- Bank Fraud: One of the most common type 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, use and deposit counterfeit money, and other financial misrepresentation upon the bank for a financial gain.
There are many government enforcement agencies that conduct investigations to determine whether individuals are committing white-collar crimes. Corporations also employ internal investigators, attorneys, or the SEC to investigate to determine whether any directors, management, or individuals in connection with the corporation are committing criminal activities.
When the white-collar crimes involve the sale of securities and stocks, the SEC and State Attorney Generals investigate and enforce proceedings against individuals who are suspected to commit insider trading. Many corporations have regular internal investigations and audits to investigate a wide variety of alleged wrongdoing.
The elements required to prove that a white-collar crime was committed is the following:
- Intent: To commit a wrongful act or to achieve a purpose that is inconsistent with the law or public safety with the intent that the purpose is achieved. This usually occurs when the defendant acts or commits a behavior with the knowledge that the act is unlawful and can be publishable by law.
- Disguise and Concealment: The hiding or concealing of the real purpose of the crime. This 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 have knowledge that he is committing the crime. This usually occurs when the defendant knowingly and intentionally commits the act to gain a financial advantage.
- Reliance: Reliance occurs when the victim or plaintiff relied on the defendant’s fraudulent scheme or act.
As discussed above, most common white-collar crimes are committed by individuals who are business executives or within the business or corporate settings who commit the crime for a financial gain. Some types of common examples of white-collar crimes include:
- Insider trading
- Embezzlement of store funds by a manager or employee
- Ponzi Schemes
- Pyramid schemes
- West African Scams
- Investment schemes
- Insurance Fraud
One of the main defenses for a white-collar crime is the absence of intent. Since all white-collar crimes require the defendant to commit the criminal scheme or activity with knowledge and intent that the crime is being committed in motivation of a financial gain, if a defendant did not intend to do the crime, the defendant may not be held liable. The following are common defenses used for a white-collar charge:
- Absence of Intent: The defendant did not have intent to commit the crime or the activity that was carried out by the defendant was not intentionally done for a personal and financial gain.
- Entrapment: Entrapment occurs when the defendant did not have intent to commit the white-collar crime, but law enforcement officials coerced criminal activity.
The penalties for a white-collar crime depends of the nature and degree of the offense and whether the crime was against state law or federal law. Penalties for white-collar crimes can be harsh and severe since some of the crimes are against federal law. The punishments for white-collar crimes may include:
- Fines and restitution
- Community service
- Disgorge of any profits and financial gain received from the crime
- Home detention with a supervised release
Some state and federal crimes allow the defendant to receive a lower penalty if the defendant cooperates with prosecution by taking responsibility of the crime and assisting the authorities in their investigation.
White-collar crime can have serious criminal and financial consequences for you, your business, and your family. If you have been convicted of a white-collar crime, a criminal defense attorney with experience in this field can evaluate your case and determine whether there are any possible defenses that are available to you.