White Collar Crimes
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The Federal Bureau of Investigation defines white collar crimes as those “characterized by deceit, concealment or violation of trust, and which are not dependent upon the application or threat of physical force or violence.” Such crimes are committed to obtain money, property, or services, to avoid payment, or to secure personal or business advantage.
The most dramatic examples of white collar crime appear regularly in the news ‒ corporate officials hide millions of dollars, defraud shareholders, engage in insider trading, or file high-ticket fraudulent insurance claims. The truth is, though, that white collar crime occurs at various levels, often far less dramatic than those examples we see on television.
In fact, the National Incident-Based Reporting System (NIBRS) classifies such offenses as writing bad checks, income tax fraud, and even welfare fraud as white collar crimes. The key distinguishing element in white collar crime is that it is based on dishonesty and deception rather than violence or force.
Fraud is one of the most common types of white collar crime, and encompasses a wide variety of more specific crimes.
Entering into fraudulent contracts, ATM fraud, welfare fraud, health insurance fraud, liability/property insurance fraud, mail fraud, travel scams, telemarketing scams, wire fraud, strategic bankruptcy, home improvement fraud, confidence games, religious fraud, false advertising, fraudulent loan applications, impersonation and insider trading are all listed by NIBRS under the heading of “fraud”.
The Department of Justice defines fraud broadly as “the intentional perversion of the truth for the purpose of inducing another person or other entity in reliance upon it to part with some thing of value or to surrender a legal right”. In a nutshell, that means tricking someone into giving up money, property, or rights.
The wide range of crimes included under this heading means a wide range of sentencing, as well. Taken together, all crimes classified as fraud in the federal criminal system resulted in an average sentence of just over two years. There are significant differences depending upon the type of fraud involved, though. For instance, crimes classified as securities and exchange fraud carried an average sentence of just under five years. In state court, the average sentence for fraud was also two years.
Embezzlement is a particular form of theft wherein the offender has legal access to, but not legal ownership of, money or property taken. The most common situations in which embezzlement occurs are those in which an employee who has access to the employer’s money or property ‒ or to the money or property of the employer’s clients ‒ diverts some of that money or property for his own use. Embezzlement is distinguished from larceny by the embezzler’s control over the money or property in question.
Embezzlement doesn’t always mean outright theft. Unauthorized borrowing of money or property entrusted to one’s care may also constitute embezzlement. Like fraud, embezzlement covers a broad spectrum of offenses ranging from high-level bank employees skimming hundreds of thousands of dollars from the banks accounts to the waitress who picks up cash left by a customer to pay the check and slips it in her own pocket instead.
At the federal level, embezzlement from private businesses or individual clients tends to carry harsher sentences than embezzlement from banks and governmental agencies. At the state level, embezzlement is generally classified with fraud and carries similar penalties.
Forgery and counterfeiting refer generally to the copying or alteration of something in order to pass the copy or altered version off as original and authentic. Signing another person’s name to a check or document without that person’s permission is forgery. The creation of false documents may be classified as either forgery or counterfeiting, depending upon the jurisdiction and the specifics.
For instance, the creation of a copy of a valuable work of art, complete with the artist’s signature, in an attempt to sell the copy as the original might constitute forgery or counterfeiting or both.
Historically, “forgery” referred to written instruments, while “counterfeiting” applied to the manufacture of works and objects such as money and artwork. At the core of each crime is the effort to create something and pass it off as real or original when it is not: a fake deed to real property, an altered check, and counterfeit currency are some of the most common.
Bribery and extortion are both crimes intended to persuade another person to act in a certain way, but the similarity ends there. Bribery attempts to influence the other person’s behavior by offering some benefit, often money, in compensation for that decision.
For instance, a business impacted by a certain piece of legislation might offer money, or a campaign contribution, to an official who voted as the company wished. The average bribery conviction in the federal system carried a sentence of 9 to18 months.
Extortion, while related to bribery and often occurring in tandem with it, might not even otherwise be classified as a white collar crime. The primary difference between bribery and extortion is that where bribery attempts to persuade through the offering of a benefit, extortion seeks to achieve the same effect through the use of threats. Those threats may related to disclosure of personal or embarrassing information, or may be threats of physical harm. Extortion typically carries a much longer prison sentence than bribery, with the federal average at just over six years.
Cyber crime is a relatively new area of law, and as such is constantly developing. Perhaps more all-encompassing than any other classification described, cyber crime includes virtually any crime that occurs using internet or networking technology.
Cyber crimes range from the relatively minor ‒ like stealing wireless internet access ‒ to serious ‒ like hacking into secure networks, illegally redirecting web servers and causing computer viruses.
Crime may also be classified as cyber crime, or charged in conjunction with another crime, when the internet is used in the commission of more traditional crimes like fraud and child pornography.
Cyber crime statutes may vary considerably from state to state, in particular depending upon how recently those statutes have been updated. Many cyber crimes are also prosecuted at the federal level. Because of the discrepancy among state statutes and the varying degrees of seriousness, penalties for cyber crimes vary widely.
Identity theft is simply the use of another person’s identity and personal information for purposes such as obtaining fraudulent credit accounts. Just a few years ago, identity theft was infrequently prosecuted. Many prosecutors’ offices didn’t make identity theft a priority, and those who did want to prosecute often had difficulty obtaining records and cooperation from the companies involved.
Over the past few years, though, credit card and other finance companies have seen significant losses from identity theft, and as such have developed a new interest in cooperating in the prosecution of these crimes. In fact, many larger jurisdictions now have special divisions dedicated to the prosecution of identity theft.
Identity theft may be subject to state or federal prosecution. Because the prosecution of identity theft and the statutes under which it is prosecuted are still evolving, the potential sentences vary dramatically. A single incidence of using another person’s identity to make a major purchase might result in a sentence of a year, while the use of identity theft in connection with certain other crimes may authorize a sentence of up to 25 years.
Although some tax crimes are charged under fraud statutes, tax evasion laws generally encompass any effort to avoid paying taxes. This may mean failure to file tax returns, misreporting of income or deductions, or any other deliberate action taken to avoid the payment of taxes due.
Tax evasion charges may relate to federal or state taxes ‒ or in some cases perhaps even local taxes. In addition to the typical criminal penalties such as jail or prison time, there may be substantial financial penalties associated with tax evasion or tax fraud.
The Bottom Line
White collar crimes cover a broad spectrum and carry with them a wide variety of penalties. Since white collar crimes require intentional deception and a breach of trust, they are treated seriously. If you’ve been charged with or are under investigation for a white collar crime, speak with a criminal defense attorney in your area as soon as possible.
It’s important that you understand the possible penalties that may apply in your case before your case begins moving forward. Some defenses require advance notice and filing deadlines may be strictly enforced.
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The above summary of white collar crimes is by no means all-inclusive and is not legal advice. Laws may have changed since our last update. For the latest information on white collar crimes, speak to a criminal defense attorney in your area.