The Basics of White Collar Crime – From General Legislation to Defenses and Sentencing

White collar crime in the United States is a high-level and costly crime, most often investigated by federal organizations such as the FBI. Year-to-date, 2020 has seen approximately 3,249 white collar crime prosecutions in the United States alone; a fraction of these crimes that take place all around the world. The most three most common of these crimes in 2020 were fraud by wire, radio, and/or television, mail fraud conspiracy, and bank fraud.

As of 2020, Arizona is the 6th highest state for white collar crimes; up from rank 14 just last year.

But what exactly defines white collar crime? What consequences face individuals who commit a white collar crime? And in what ways can you defend yourself against white collar crime charges? Our experienced team of criminal lawyers will answer these questions and more.

What Is White Collar Crime?

As defined by the FBI, “white collar crime,” is a term that was coined in 1939 and is “synonymous with the full range of frauds committed by business and government professionals.” These crimes are most often non-violent; instead, manipulating organizations and/or individuals for monetary gain.

Examples of white collar crimes include public corruption, identity theft, mortgage fraud, money laundering, and more. The list of potential crimes is an extensive one, and one that continues to grow as technology and the economy continue to build and grow with one another. Due to the complexities of many of these crimes, the state and federal organizations that investigate them are forced to come up with more and more creative and sophisticated methods of investigation.

Due to the extreme consequences these crimes can have – costing the nation $300 billion dollars every year – white collar crimes, and specifically corporate white collar crimes, continue to be a high priority for federal investigators.

But how exactly does white collar crime differentiate from blue collar crimes? In the most basic definition, the difference between “white” collar and “blue” collar is the access an induvial has to the resources needed in order to commit the crime in question. Blue collar crimes are typically more “straight-forward” crimes such as robbery, while white collar crimes are often more position-based in order to commit fraud (e.g. bank employee).

Types of White Collar Crimes

Some of the most common types of white collar crime are as follows. This is by no means a complete list, as new types of crimes are being established every day, but this list compiles some of the most general categories in the eyes of the law.

• Corporate Fraud – illegal, dishonest activity conducted by a company or individual in order to provide some kind of advantage to the fraudulent parties.

• Mortgage Fraud – Lying or omitting key information that results in the approval of a mortgage loan (which the applicant would not be approved for under regular circumstances).

• Health Care Fraud – When a company, group, or individual intentionally misconstrues the needed medical services and/or treatment, leading to unauthorized payments. (E.g. falsifying documents, billing, etc.)

• Identity Theft – The theft of an individual’s personal information (e.g. social security number, etc.) in order to commit fraud.

• Intellectual Property Theft (Piracy) – Robbing an individual or organization of creative content such as ideas, designs, inventions, etc.

• Money Laundering – The act of concealing/disguising the origin of illegal money by transferring the money through various accounts or making significant commercial purchases.

• Securities Fraud / Commodities Fraud – Both securities and commodities fraud relate to the stock market. Each refers to the practice of misrepresenting information in order to influence investor decisions in either the stock trade or commodities market.

• Phishing – The practice of sending emails that appear to be from reputable sources (companies or individuals) with the intention of gathering personal information that can be used to conduct fraud.

What Are the Legal Repercussions of White Collar Crime?

While individuals are typically the ones charged with white collar crimes, it is possible for entire corporations to be charged (sanctioned) for white collar offenses. These charges can lead to any number of penalties such as fines, forfeitures, imprisonment, restitution, and more. Depending on how many people experienced and/or suffered from financial harm, the consequences may be significantly more extreme in some case rather than others.

Due to the various types of white collar crimes, the U.S. government has the Federal Sentencing Guidelines in place in order to give judges on both state and federal levels the opportunity to convict an individual on a federal, white collar charge. Included in these guidelines is the president known as the “Responsible Corporate Office Doctrine.” This presumes that high-ranking officials of companies are aware of the wrongdoings committed by their company (or individuals within it). Two 20th century U.S. Supreme Court cases helped to establish this doctrine.

The president of Buffalo Pharmacal Company, Inc. was caught reselling prescription drugs into interstate commerce, which violated the Federal Food, Drug, and Cosmetic Act. The jury found the President guilty while the corporation itself was found not guilty.

The national food chain, Acme Markets, Inc. and its president were brought up on charges due to the fact that they allowed interstate food shipments to be exposed to rodent contamination. Both Corporation and President with convicted of violating the Federal Food, Drug, and Cosmetic Act. This trial established the legal precedent that the role of the supervisor (in this case, President) of a business organization has a duty to “seek out and remedy violations” as well as “implement measures that will insure that violations will not occur.”

Prosecutors and judges face particular difficulties when it comes to sentencing white collar crimes. In every case, the judge must consider how serious the crime is and the circumstances of the defendant when the crime was committed. Additionally, judges must consider if and how the money can be paid back to the victims of the case (restitution). All of these elements become even more complex if and when the U.S. government is the victim of fraudulent acts. While the guidelines (as outlined above) exist, they are rather general and do not lay out sentencing options for every possible crime.

For those who are charged with white collar crime, possible consequences include jail time, fines, restitution (paying back the victims), forfeiture of assets, home arrest, and more.

Defense Approaches for White Collar Charges

If you are arrested and charged for a white collar crime, the most important thing to do is contact a criminal, white collar/FCPA lawyer. Because white collar crime is a very specific area of practice, you’ll want a lawyer who is experienced in these laws and practices. A lawyer will be able to help you protect your rights and come up with a defense strategy for your particular case.

When it comes to a defense, you may have a number of options depending upon your situation; duress (if you were forced to commit the crime by another party), intoxication, incapacity, insanity, or entrapment. Each of these defenses have worked for cases in the past, but it’s important to keep in mind that pleading “not guilty” due to one of these defenses may actually have a negative impact. Particularly when it comes to an “insanity” plea, juries may be swayed against the defendant if they believe the defendant to be untrustworthy.

Call the Phoenix Criminal Lawyer criminal law team at a (602) 600-0447 to get expert-level legal help with your case.