White Collar Crime

White-collar crime generally involves financially motivated offenses perpetrated by business and government employees or officials. The crimes are not violent, and are usually committed by persons in whom some level of trust or autonomy is placed. They frequently cause significant losses for companies, investors and employees.

The Types of White-Collar Crimes

Fraud. By far, the most common type of white-collar crime is fraud. Fraud involves the intentional misrepresentation or omission of a material fact. That misrepresentation must be reasonably relied on, and someone must suffer a monetary loss as a result. The most prevalent types of fraud include:

• Computer fraud: The act of stealing bank, credit card, or proprietary information from a computer.
• Bankruptcy fraud: The concealment of assets, misleading creditors, or illegally pressuring debtors.
• Health care fraud: The acceptance of kickbacks or billing for services not performed, unnecessary equipment, and/or services performed by a less qualified person. This type of fraud applies to all areas of health care, including hospitals, home health care, ambulance services, doctors, chiropractors, psychiatric hospitals, laboratories, pharmacies, and nursing homes.
• Telemarketing fraud: The use of the telephone as the primary means of communicating with potential victims.
• Credit card fraud: The use of someone’s credit card information to make unauthorized purchases.
• Insurance fraud: The falsification, inflation, or “padding” of insurance claims.
• Mail fraud: The use of the U.S. mail to commit a crime.
• Government fraud: The act of engaging in fraudulent activities in relation to public housing, agricultural programs, defense procurement, educational programs, or other government activities, including bribery in contracts, collusion among contractors, false or double billing, false certification of the quality of parts, and substitution of bogus parts.
• Financial fraud: The act of engaging in fraudulent activities relating to commercial loans, check forgery, counterfeit negotiable instruments, mortgage fraud, check-kiting, and false applications.
• Securities fraud: The act of manipulating the market and stealing from securities accounts.
• Counterfeiting: The act of printing counterfeit money or manufacturing counterfeit designer apparel or accessories.

Theft

• Embezzlement or Misappropriation of Property: The theft of money, goods, or services by an employee.
• Blackmail: The act of demanding money in exchange for not causing physical harm, damaging property, accusing someone of a crime, or exposing secrets.

Violation of Statutory Law

• Anti-trust violations: The act of fixing prices and building monopolies.
• Environmental law violations: The act of discharging a toxic substance into the air, water, or soil that harms people, property, or the environment, including air pollution, water pollution, and illegal dumping.
• Tax evasion: The act of filing false tax returns or not filing tax returns at all.
• Kickbacks: The act of compensating an individual or company in order to influence and gain profit. Kickbacks result in an unearned advantage, benefit or opportunity, even if others are more qualified or offer better prices. Kickbacks hurt business by interfering with competition in the marketplace.
• Insider trading: The act of trading stock or other securities with knowledge of confidential information about important events that is unavailable to the general public.
• Bribery: The act of offering money, goods, services, or information with the intent to influence the actions or decisions of the recipient.
• Money laundering: The act of concealing income raised through illegal activity in order to evade detection. Illicit proceeds are laundered to appear as though the funds were generated through legitimate means.
• Public corruption: The act of breaching the public trust and/or abusing a government position, usually in connection with private-sector accomplices. A government official violates the law when he or she asks for or agrees to receive something of value in return for being influenced in the performance of official duties.

The Defenses to White Collar Crime Charges

White-collar crimes are governed by the general principles of criminal liability. Each crime requires a bad act, criminal intent, and causation. Many of the defenses to white-collar crime are the same as those that apply to other crimes, such as insanity, intoxication, incapacity (when the defendant is incapable of committing a crime), and duress (someone else caused the defendant to commit the crime).

A common defense to white-collar crimes is entrapment, a situation in which government personnel present the opportunity for the defendant to commit a criminal act that he or she otherwise would not have committed. The defendant argues that he or she would have had the tendency to commit the crime without government enticement. A judge will look at the situation through the defendant’s eyes in deciding whether the defendant was entrapped. To succeed on an entrapment defense, the defendant must prove that the government induced him or her to commit the crime and that he or she had no predisposition to committing the crime.

The entrapment defense fails when a person is willing to break the law and the government agents merely provide a favorable opportunity for the person to commit the crime. For example, it is not entrapment if a government agent pretends to be someone else and offers, either directly or through a decoy, to engage in an unlawful transaction with the person. On the other hand, if the evidence leaves reasonable doubt as to whether the defendant was predisposed to commit the crime, except for inducement by the government agent, the defendant should be acquitted.

SENTENCING

Both individuals and corporations may be charged with white-collar crimes. The penalties for white-collar crimes are fines, home detention, costs of prosecution, forfeitures, restitution, supervised release, and imprisonment. Sentences may be reduced if the defendant helps authorities with their investigation.