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The term “white collar crime” refers to a variety of criminal offenses that are financially motivated and non-violent. Because these offenses do not physically harm other individuals, many people may believe that white collar crimes are not as serious as other types of crimes, such as violent offenses. This belief is mistaken, however, as white collar offenders can face very serious charges and penalties in many situations.

Though there are many different types of white collar crime schemes, most involve some type of fraudulent actions in order to wrongfully steal money. The following are brief descriptions of different types of white collar offenses.

Embezzlement This offense occurs when you take money or property that has been entrusted to you and wrongfully retain possession of it or otherwise use it for your own benefit. An example of embezzlement is a bank teller who has the right to handle the bank’s money decides to keep some of the money for himself.

Bank fraud – The term “bank fraud” encompasses any type of offense that involves fraud against a financial banking institution. Such offenses may include check kiting, other check fraud, mortgage fraud, and more.

Extortion – Extortion refers to the act of obtaining money, services, or other property through coercion, which involves intimidation or threats of future harm. Extortion is notoriously used by organized crime groups. Blackmail is one type of extortion. 

Money laundering – This is an often complex financial scheme intended to disguise “dirty” money into “clean” money. Dirty money is obtained through unlawful means, such as extortion, embezzlement, or drug trafficking. In order to launder the money, offenders may try to route the funds through various accounts (including off-shore accounts), make large real estate transactions, form false businesses, run the money through casinos through gambling, and more.

Securities fraud Also commonly known as investment fraud, securities fraud covers a number of different schemes involving stock that violate United States securities laws.[1] Such schemes can include insider trading, giving false information to investors, embezzling money from investors, and more.

Insurance fraud – This offense occurs any time an individual or company attempts to defraud an insurance company by making false claims, exaggerating claims, intentionally destroying property, and more.

Identity theft – Identity theft is perhaps one of the more well-known white collar crimes because it affects the largest number of victims. The Bureau of Justice Statistics (BJS) reported[2] that an estimated 16.6 million people in the United States were victims of identity theft in 2012 alone. Identity theft occurs when an offender steals personal information from another individual in order to use their existing accounts, attempt to open new accounts, or use their information for another fraudulent reason, such as immigration or to cover up a criminal record.

Credit card fraud – Credit card fraud occurs any time an individual fraudulently obtains information regarding another person’s credit or debit card in order to try to obtain goods without paying or to gain unauthorized access to funds in an account.

Tax evasion – Individuals or companies may be charged with tax evasion for a variety of actions intended to avoid paying proper tax liability to the Internal Revenue Service (IRS).[3] Evasion may include claiming false deductions, failing to report income, using other false information on tax returns, or simply failing to file required tax returns altogether.

Bankruptcy fraud – This type of offense happens when an individual or company attempts to use the U.S. Bankruptcy laws[4] to wrongfully discharge debts. Types of bankruptcy fraud include hiding assets, lying about debts, incurring large debts in anticipation of a bankruptcy filing, using fraudulent information to repeatedly file for bankruptcy, or intentionally making any false statements to the bankruptcy courts or trustees.

Computer or Internet fraud Computer and Internet fraud[5] is a term that encompasses many different fraudulent actions using a computer or online connection. Such actions include hacking, wrongfully obtaining passwords and other account information through electronic interception, altering data to cover up embezzlement or other schemes, or otherwise obtaining information through misrepresentation online.

Notorious White Collar Cases

In some instances, white collar schemes can be extraordinarily extensive, involve impressive amounts of money, and involve parties that are already well-known. In such cases, once the white collar charges are filed, the media often keeps close track of the cases, trials, and resulting sentences. The following are three examples of notorious white collar cases in recent years:

Martha Stewart – The television personality and owner of a domestic-related media empire was charged with insider trading and conspiracy, among other offenses. She was convicted after a 2004 trial and served five months in a federal correctional institution, five months of house arrest,[6]< and two years of supervised release.

Bernie Madoff – Madoff was a highly successful stockbroker and the chairman of NASDAQ when he was placed under arrest in 2008. His sons, who worked for him, had alerted federal authorities that one arm of the Madoff business was an elaborate Ponzi scheme,[7] which is a type of investment fraud. Authorities discovered that it was the largest known Ponzi scheme in history involving an estimated $64.8 billion. He pleaded guilty to 11 different white collar federal offenses and was ordered to serve 150 years in federal prison and pay $17 billion in restitution to the victims of his crime.

Enron – Numerous executives of the major energy corporation in the United States were revealed to be involved in an extensive securities fraud scheme that concealed billions of dollars in company losses and debt from investors and the U.S. Securities and Exchange Commission (SEC).[8] In total 21 individuals, including Enron employees and third party accountants, were convicted of various white collar offenses and sentenced to time in federal prisons.

Though the above are examples of large-scale schemes that were in the public eye, numerous white collar crimes take place every day on a much smaller scale that will never make headlines. Even relatively small white collar schemes can have serious penalties including jail time, fines, restitution, and more.

Author: Brian Zeiger
Brian Zeiger

Brian J. Zeiger, Esquire, is an experienced and successful criminal defense and civil rights attorney. He is a seasoned trial lawyer with significant experience before juries and judges. Brian understands civil rights cases, including Taser, Wrongful Death, Excessive Force, Police Brutality, Police Misconduct, Malicious Prosecution, Monell Claims, Sexual Assault, Prisoner’s Rights, Time Credit, Medical Malpractice, and Medical Indifference.