Because numerous high-profile individuals have been convicted of white-collar crimes in recent years, many people believe you must be a celebrity or a Wall Street tycoon to face these types of charges. In reality, white-collar crime is a catch-all term for a variety of criminal offenses that typically involve ordinary people.
The phrase “white-collar crime” was created to describe a range of criminal acts that involve fraud and deceit. According to the FBI’s Criminal Justice Information Services Division, the term was first used by a prominent sociologist in 1939 to call attention to the fact that society was so preoccupied with “low-status offender and street crimes,” that offenses committed “by people in higher status occupations” often went ignored.
Because most of these charges involve non-violent crimes committed by office workers in a business setting, the term refers to the type of white dress shirt that was historically worn by corporate employees to distinguish themselves from laborers in the working class. In most cases, as with credit card fraud, embezzlement, tax fraud, securities violations, and identity theft, white-collar crimes involve the mishandling of money.
What Are the Most Common White-Collar Crimes?
Since white-collar crimes fall under both federal and state jurisdiction–and the term itself can be interpreted quite broadly–it can be difficult to determine with any precision what the “most common” crimes are. But generally speaking, here are some of the more commonly prosecuted forms of white-collar crime:
- Bankruptcy Fraud – When a person is unable to pay their debts, they can file for bankruptcy and obtain relief from a federal court. But if the debtor lies on their bankruptcy forms–i.e., fails to disclose all of their assets–or attempts to “hide” property, the court may refer the matter to federal prosecutors for possible bankruptcy fraud charges.
- Corporate Fraud – This includes both actual acts of fraud–such as falsifying financial information or insider trading–as well as attempts to conceal evidence of fraud from federal regulators, such as the Securities and Exchange Commission.
- Embezzlement – This is perhaps the most common type of crime actually committed by white-collar workers; namely misappropriate or otherwise diverting corporate funds for their own personal use.
- Healthcare Fraud – Texas has seen a significant increase in fraudulent insurance and Medicare/Medicaid billing schemes in recent years; these scams typically involve doctors or healthcare providers billing for non-existent procedures.
- Identify Theft – If you obtain, possess, or in any way use another person’s personal identifying information for fraudulent purposes, you are committing identity theft; a common example of this is using someone’s Social Security number to take out a credit card in their name.
- Investment Scams – Often called “Ponzi schemes” or “pyramid schemes,” this is when a person promises high returns on a seemingly no-risk investment; in reality, the scammer relies on a steady stream of new investors to pay inflated returns to existing clients.
- Mail Fraud – If a person uses the Postal Service as part of a scheme to defraud others, that is considered mail fraud under federal law. Similar laws prevent the use of “wires” or computer networks to further fraudulent schemes.
- Money Laundering – In its simplest form, money laundering refers to the act of taking the proceeds of illegal activity and attempting to “transform” it into legitimate funds. Money laundering need not involve a complex scheme–simply taking cash earned from the sale of illegal drugs and depositing it in a bank qualifies.
- Tax Evasion – Many Texans find themselves unable to pay their tax bill when it comes due. By itself, this is not a crime. But similar to bankruptcy fraud, if a taxpayer tries to avoid their tax obligation by furnishing false information to the IRS or giving property away to avoid collection efforts, that may be prosecuted as criminal tax evasion.
What Are the Causes of White-Collar Crimes?
Some people get caught up in white-collar crimes without intending to do anything wrong. These people are often suffering from financial distress and may feel they have no choice but to commit fraud or embezzlement to stay afloat. In other cases, however, white-collar crime is the byproduct of certain workplace environments.
Companies that fail to enforce high ethical standards often become a breeding ground for white-collar criminals. And individual employees who may feel wronged by management–or simply have a sense of entitlement–may feel justified in their actions.
Of course, the law does not care why someone commits a white-collar crime. All that matters is that there has been some form of fraud or deceit resulting in a financial loss to the victim. And oftentimes, these victims are not large, faceless corporations, but individuals who may have lost their life savings in a scam.
This is why federal and state prosecutors take white-collar crime seriously. The mere fact there was no physical violence does not mean the white-collar defendant will get off easy. On the contrary, depending on the specific charges involved, it is not uncommon for white-collar defendants to face decades in prison and thousands of dollars in fines and restitution to the victims.
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