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 place. They frequently cause significant losses for companies, investors and employees.
The Types of White Collar Crimes
Fraud—Far and away the most common type of white collar crime, 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: Stealing bank, credit card or proprietary information from a computer.
- Bankruptcy fraud: Concealing assets, misleading creditors or illegally pressuring debtors.
- Health care fraud: Accepting kickbacks or billing for services not performed, unnecessary equipment and/or services performed by a less qualified person; 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: Using the telephone as the primary means of communicating with potential victims.
- Credit card fraud: Using someone’s credit card information to make unauthorized purchases.
- Insurance fraud: Falsifying, inflating or “padding” claims.
- Mail fraud: Using the U.S. mail to commit a crime.
- Government fraud: 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: Engaging in fraudulent activities relating to commercial loans, check forgery, counterfeit negotiable instruments, mortgage fraud, check-kiting and false applications.
- Securities fraud: Manipulating the market and stealing from securities accounts.
- Counterfeiting: Printing counterfeit money or manufacturing counterfeit designer apparel or accessories.
- Embezzlement or Misappropriation of Property: Theft of money, goods or services by an employee
- Blackmail: 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: Fixing prices and building monopolies.
- Environmental law violations: 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: Filing false tax returns or not filing tax returns at all.
- Kickbacks: 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: Trading stock or other securities with knowledge of confidential information about important events that is unavailable to the general public.
- Bribery: Offering money, goods, services or information with the intent to influence the actions or decisions of the recipient.
- Money laundering: 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: 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 (defendant was incapable of committing the 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 no 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 for a government agent to pretend to be someone else and offer, either directly or through a decoy, to engage in an unlawful transaction with the person. On the other hand, if the evidence leaves a 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.
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.