At Work

An Overview of White Collar Crime

White collar crime sounds relatively innocent. No one is murdered or assaulted, so how bad could it be compared to other crimes? Pretty serious when you consider the potential penalties for white collar crimes.

It is true, white collar crimes are non-violent crimes. However, there are still victims, so it is not a victimless crime.

Some common examples of white collar crimes include fraud, forgery, and embezzlement. Let’s look more closely at each of these white collar crimes to find out how serious white collar crimes can be for the victims and the perpetrators.

Fraud — Deceiving Others for Money

Fraud encompasses a broad variety of white collar crimes. Fraud charges can relate to securities fraud, corporate fraud, tax fraud, mortgage fraud, mail fraud, health care fraud, insurance fraud, and many more situations.

Fraud is the intentional misrepresentation of facts, either through your words or your conduct. The person committing fraud benefits from the misrepresentation of facts while causing damage or injury to another party.

For the crime to fall under the umbrella of fraud, the person making the false statements must know or believe the statements are untrue and intended to deceive the other party.

An example of insurance fraud is a doctor who bills an insurance company for services that he did not perform for the patient. Securities fraud may include insider trading and making false statements to investors.

Bankruptcy fraud might include concealing assets or income to cheat your creditors.

In the broadest sense, the white collar crime of fraud encompasses any crime that utilizes deception to obtain financial gain. Fraud can be used against companies, government agencies, and individuals.

Fraud upon a company or government entity could be from inside, such as an employee, manager, or another insider. It could also be someone from outside of a company, such as a vendor, customers, or another third party.

Fraud against individuals often takes the form of phishing schemes, Ponzi schemes, and identity theft.

Forgery — False Writing

Forgery involves altering, making, using, or possessing a false writing to commit fraud. The most common example of forgery is signing a person’s signature on a document. As with other forms of fraud, forgery is used for financial gain at the expense of another party.

For someone to commit the crime of forgery, the person must meet all elements of the crime.

First, the person must make, use, alter, or possess a false writing. Forged letters, altered school transcripts, and forged deeds for real estate are examples of false writings. An altered document could be considered forgery if the alterations are material.

The writing must have legal significance. The document must affect a party’s legal rights or obligations to have legal significance.

Documents with legal significance include government-issued documents, financial documents, transactional documents, estate documents, and works of art. They may include letters of reference, medical records, and checks.

The writing must be false and intended to defraud another party. For the writing to be false, it merely must contain a fabrication that materially alters the fundamental meaning of the document.

For example, someone changes the owner’s name on the title to a vehicle to sell a vehicle he or she does not own.

Embezzlement — Taking Property for Your Own Use

Embezzlement is one of the most common types of white collar crime. It involves taking money or property that does not belong to you for your own purposes. It is different from theft because the person taking the money or property is not doing so by force.

The crime of embezzlement involves using or exploiting a relationship to take money or property illegally. The owner of the property granted the person committing the crime access to the property. The perpetrator has permission to access the property or the money.

Embezzlement involves a breach of a fiduciary duty or trust. For example, a bookkeeper at a company takes a portion of the petty cash each month for her personal use.

An accountant with access to his clients’ financial accounts transfers money from the accounts to the accountant’s personal account.

Another example of embezzlement would be a public official using public funds for personal use or using public property for personal use. Legal guardians or trustees using money held for a minor for the benefit of the guardian or trustee.

Embezzlement can be difficult to track for a couple of reasons. First, the person usually takes a small amount of money that is not likely to be missed.

Second, because the person has authority and control of the money, the person can hide the embezzlement until someone performs an audit.

Penalties for White Collar Crimes

The criminal penalties for white collar crimes vary. Factors that impact sentencing include the type of crime, the amount of money or property involved, and whether the crime is charged as a federal or state crime.

However, penalties for white collar crimes might include:

  • Jail or prison sentences
  • Fines
  • Restitution
  • Probation
  • Forfeitures
  • Home detention

Some of the penalties for white-collar crimes are severe. It can be a wise choice to seek legal counsel so that you understand the criminal charges and the potential penalties for a conviction.