Definition of White Collar Crime
- Crimes that are committed using deceptive practices for financial gains.
1939 Term created by Edwin Sutherland, Professor of Sociology, President American Sociological Society
White Collar Crime:
Complex Cases Demanding A Detailed Defense
Each year, there are around 5,000 arrests per 100,000 people in the United States for white collar crimes.
The typical perpetrator of white collar crime is a college-educated male of Caucasian descent.
If you, or someone you love, is at risk of being accused of such crimes, it is not too early to begin discussing the defense.
What is a White Collar Crime
White collar crimes are financially motivated crimes committed by individuals, businesses, and government entities. The actual term “white collar crime” was coined by Edwin Sutherland, Professor of Sociology, 29th President American Sociological Society. Sutherland described such crimes as “a crime committed by a person of respectability and high social status in the course of his occupation.”
White collar crimes cover a wide range of activities, but generally, the crimes are committed by people who are involved in otherwise lawful businesses. The perpetrators often hold respectable positions in their communities or businesses, until their illegal activities discovered. The laws concerning white collar crimes vary, depending on the exact nature of the crimes committed, though many fall under federal authority.
Common Types of White Collar Crime
The term white collar crime covers a wide array of crimes, but they all involve crimes committed through deceit for the purpose of gaining money or other assets. The most common types of white collar crime include fraud, insider trading, and bribery. White collar crimes can often be difficult to prosecute, as the perpetrators take sophisticated steps to ensure their illegal activities are difficult to detect. The most common types of white collar crime are explained below.
Fraud is committed by misrepresenting facts in order to gain something in return. The crime of fraud requires four elements:
- The perpetrator made a statement of fact that he knew to be false
- The perpetrator intentionally made the false statement
- The victim believed the statement to be true, relied on the statement, and lost something of value, based on his belief
Insider trading is often considered a type of fraud, though many people are surprised to learn that not all insider trading is illegal. Insider trading is against the law if a securities transaction, which is the sale or purchase of stocks, is engaged in by a person, or small group of people, inside the company, who have special knowledge not available to others.
Bribery is committed when a person uses something of value to tempt or influence someone to act in a specific way, to make certain decisions, or to express certain opinions. This is most commonly seen in one person offering to pay money to another person, who is in a position of authority, for the purpose of persuading him to do something, or to refrain from doing something. Both offering bribes, and accepting bribes, are considered illegal.
The altering, making, possession, or use of a falsified document, such as a check, contract, or other document, with the intent to defraud or injure the recipient of the document. This includes such crimes as passing forged checks, and creating, possession, or selling falsified art.
Other Types of White Collar Crime
- Telemarketing scams
- Tax evasion
- Ponzi schemes
- Pyramid schemes
- Bank fraud
- Healthcare Fraud
White Collar Crime Statistics
Every year, the federal government investigates and prosecutes people for committing white collar crimes. Most people, however, are not aware of the actions that may be considered a white collar crime. While the general public thinks of criminals like Charles Ponzi, Bernie Madoff, or the Tyco and Enron scandals when they think of white collar crime, regular people are increasingly found guilty of such crimes to a lesser degree.
Each year, government departments and organizations track white collar crime statistics, publishing the results every few years. of the white collar crime statistics are shocking to those unaware of this crime’s prevalence. Fraud and other white collar crimes cost businesses and individuals more than $400 billion each year in the U.S.
- White collar crime most commonly occurs in companies with fewer than 100 employees
- 75% of white collar crime is committed by men
- The typical perpetrator of white collar crime is a college-educated male of Caucasian descent
- On average, companies lose $9 or more per day, per employee due to fraud
- Managers are responsible for four times the amount of loss than employees
- Each year, there are around 5,000 arrests per 100,000 people in the United States for white collar crimes
- Of those arrests, 635 are related to property crimes
- Bribery accounts for the fewest white-collar-crime-related arrests
- Estimates show that one out of every four households will be the subject of a white collar crime at some point in their life
Penalties for White Collar Crime
The criminal penalties for white collar crime vary greatly, depending on the type of crime committed, and the circumstances surrounding the case. Most individuals facing criminal charges for a white collar crime have never faced the criminal justice system, and the process is frightening. Typically, penalties for white collar crime include any combination of imprisonment, restitution, fines, probation, and community service.
Such crimes that are serious enough to face prison time may place the perpetrators behind bars for many years. In fact, Congress passed the Sarbanes-Oxley Act of 2002, which increased oversight in corporate responsibility and mandated financial disclosures, in an attempt to stem large scale white collar crime. As a result of the Act, penalties for white collar crime involving wire or mail fraud increased.
In addition to any criminal penalties imposed on a perpetrator, civil penalties may be imposed for white collar crime, as the victims can file a civil lawsuit against the perpetrator. Criminal conviction is not required for a financial crime victim to be successful and be awarded damages for his financial losses in a civil lawsuit.