White-Collar Crime

White-collar crime is characterized by law enforcement as a non-violent crime whose primary motive is personal financial gain. White-collar criminals are usually corporate insiders who occupy positions of trust.

This article covers the basic features of white-collar crime and its common defenses.

The Nature Of White-Collar Crime

White-collar crime is a term that is usually applied to crimes associated with a business that do not involve violence or bodily injury to another person.

Examples of white-collar crimes are those generally associated with lending institutions involving bank fraud, such as making false statements to obtain a loan, filing false reports or tax returns with government agencies, embezzlement, using mail or wire communications to defraud, and paying or accepting bribes.

White-collar crimes may be prosecuted in state or federal courts, depending upon whether state or federal laws have been violated. The penalties for committing white-collar crimes vary, but in some cases, they may be as severe as those prescribed for violent crimes.

Types of White Collar Crimes

Money Laundering

Money laundering is the unlawful processing of criminally tainted money in order to hide the true source of how that money was made. In essence, the criminal converts the dirty cash into funds that appear to have a legitimate and legal source.

For example, a former government official might accept cash from a foreign government in exchange for that official’s government secrets. Since the currency is traceable, the money must be cycled through a cash-based business, such as a chain of cash-based companies.

It is common for the money to pass through numerous shell companies before it is returned to the former government official or one of their companies from which legitimate funds are usually drawn.

If a third-party launderer is involved, they receive a percentage of what they can clean.

Fraud

Fraud is the unlawful act of obtaining money or property by deceit, trick, or dishonest act. Most acts of fraud are felonies.

Fraud usually involves misrepresenting a material fact upon which the victim relies. In most cases, the defense against fraud requires the defense to establish evidence that negates the defendant’s specific intent to defraud the victim.

Criminal Liability – Conspiracy

Often fraud involves more than one person involved in the scheme, each of which can be held criminally responsible under the theory of joint criminal liability and the crime of conspiracy.

Securities Fraud

Fraud can also be involved in the purchase and sale of securities. The enforcement divisions of the state and federal governments have jurisdiction to prosecute defendants that engage in security law violations, including fraud.

Other Types of Fraud

There are many different types of fraud, including:

• Forgery
• Internet fraud
• Mail fraud
• Counterfeiting
• Check fraud
• Credit card fraud
• Wire fraud

The prosecutor can charge fraud as either a misdemeanor or a felony. Depending on the type of fraud and the defendant’s criminal history, convictions can result in jail or prison terms. Sentences vary significantly and often result in multiple-year prison terms. Federal charges can lead to 15 years or more in federal prison.

Extortion

Extortion is the criminal act of obtaining money or gaining some form of personal advantage by force or the threat of force and intimidation of the victim or their family.

In most cases, the defendant has a preexisting relationship with the victim and is motivated by retribution or greed.

Substantial Prison Time

The punishment for extortion depends on whether force was used in extorting money or other property. In most states, extortion is a felony punishable by up to 20 years in prison. This is called a penalty enhancer and usually results in additional prison time for the offender.

Embezzlement

Embezzlement is among the most common form of white-collar crime. It begins with the entrustment of another’s funds under pretenses. The methods used to embezzle can vary greatly and can be pretty elaborate.

Embezzlement includes “Ponzi” schemes of all kinds, including fraudulent billing, skimming off of payroll accounts, setting up false employee accounts, falsifying financial records, and diverting funds to fabricated vendors.

The Ponzi Master

The king of embezzlement in our recent past was Bernard Madoff. The Madoff scandal involved thousands of investors and resulted in a loss to investors of billions of dollars.

Other than fines and incarceration, those convicted of embezzlement will also be ordered to make restitution. Restitution is the return of the money or property taken by the embezzler and returned to the victim.

If the defendant no longer possesses the money or property embezzled, the court will order the offender to pay the debt in installments.

Depending on the severity of the crime, courts will usually impose a period of incarceration and fines, followed by probation that does not terminate until the defendant has made full restitution to the victim.

Financial Elder Abuse

Depending on the defendant’s criminal history, the crime’s severity, and the victim’s vulnerability, such as the elderly, which trigger criminal charges under federal and state Financial Elder Abuse laws.

Professionals Charged with Crimes

Many of the individuals prosecuted for white-collar crimes hold professional licenses. White-collar defense lawyers represent many professionals, such as healthcare professionals, lawyers, and real estate professionals.

If you are a professional, a felony conviction will almost certainly result in losing your license. At the very least, your professional board will suspend your professional license.

Professional Licensing Boards

A professional licensing board is any board, bureau, or commission created to license, regulate, and enforce that profession’s professional standards and rules of conduct. Examples include: Medical Boards

• Legal Boards,
• Nursing Boards
• Account Boards
• Speech and Pathology Boards
• Psychologist Boards

Suppose your white-collar defense attorney is not experienced in appearing before your particular professional licensing board. In that case, it is strongly advised that you consult with a licensing board defense lawyer with deep experience in front of your professional board.

Licensing boards are not criminal courts of law. Boards can, however, restrict, suspend or revoke a person’s professional license. A recent example is former Mayor Rudy Guiliani, who had his license to practice law suspended in 2022.

America’s Mayor Went Bad

Separate and distinct from the state bar of New York revoking Guiliani’s professional license, he also faces criminal prosecution from state and federal prosecutors for his involvement in election fraud and other incidents of professional misconduct for former President Donald Trump.

President Charged With White Collar Crimes

The drafters of the 14th Amendment were particularly concerned that a seditious conspiracy by a public official could lead to an overthrow of the federal government.

This concern was articulated in Section 3 of that Amendment, which provides, in effect, that no person holding a public office and having taken the oath of office shall engage in insurrection or rebellion against the government or give aid or comfort to its enemies.

However, the Supreme Court in its 2024 session in Trump v. Anderson held in favor of the former president on the application of Section 3 by holding:

We conclude that States may disqualify persons holding or attempting to hold state office. But States have no power under the Constitution to enforce Section 3 with respect to federal offices, especially the Presidency.

Consult With A Criminal Defense Lawyer

Should you have specific questions or require additional information about your legal rights and obligations, we recommend you consult a verified Criminal Defense Lawyer as soon as possible.

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