“White collar crime” can describe a wide variety of crimes, but they all typically involve crime committed through deceit and motivated by financial gain. The most common white collar crimes are various types of fraud, embezzlement, tax evasion and money laundering. Many types of scams and frauds fall into the bucket of white collar crime, including Ponzi schemes and securities fraud such as insider trading. More common crimes, like insurance fraud and tax evasion, also constitute white collar crimes.
Securities fraud comes in many flavors, but one common type is “insider trading,” in which someone with inside information about a company or investment trades on that information in violation of a duty or obligation. For example, an executive knows confidential information about an upcoming company earnings report decides to sell of a chunk of his stock in the company. That would be considered securities fraud; specifically, insider trading. Another type of securities fraud occurs when someone seeks investment in a company by knowingly misstating the company’s prospects, health, or finances. By luring an investor to put up money based on false or misleading information, the company and individuals within it commit securities fraud. False or misleading statements in public reports from publicly traded companies also can constitute securities fraud. To commit securities fraud, those speaking on behalf of the business must make these false statements with knowledge that they’re false, or at least reasonably should have known them to be false.
Other White Collar Frauds
Many types of fraudulent schemes, including mortgage fraud and insurance fraud, are among the more common white collar crimes. These can be as common as an individual embarking on an insurance scheme to improperly collect on an insurance policy after lying in application materials. They can also extend to larger scale schemes by businesses to defraud their customers or others in the marketplace. Ponzi schemes and other business related scams to fraudulently take money from investors have been some of the most famous white collar crimes. These can take all shapes and sizes.
The crime of embezzlement involves improperly taking money from someone to whom you owe some type of duty. The most common example is a company employee that embezzles money from their employer by siphoning money into a personal account. Embezzlement can take many forms, however. Lawyers who improperly use client funds commit embezzlement. So do investment advisers who improperly use client funds they’ve been entrusted to protect.
Criminal tax evasion is a white collar crime through which the perpetrator attempts to avoid taxes they would otherwise owe. Tax evasion can range from simply filing tax forms with false information to illegally transferring property so as to avoid tax obligations. Individuals as well as businesses can commit criminal tax evasion. As with fraud, there are perhaps infinite ways to commit tax evasion.
Money laundering is the criminal act of filtering illegally obtained (“dirty”) money through a series of transactions designed to make the money appear legitimate (“clean”). Money laundering often involves three steps:
• First, the money is deposited into a financial institution such as a bank or brokerage.
• Next, the money is separated from its illegal origin by layers of often complex transactions, making it more difficult to trace the “dirty” money.
• The third step is integration. This is where the freshly “cleaned” money is mixed with legally obtained money, often through the purchase or sale of assets.
There is a growing trend among contemporary state legislatures to address criminal concerns with the creation of an offender registry. Today, a wide range of crimes, from arson to animal abuse, can land an offender on a registry. In an attempt to counteract the increasing prevalence of fraud in the United States, some states have even enacted a registry for financial crimes. The Utah White Collar Crime Offender Registry is similar to the sex-offender registry and provides the public with a searchable database of felons who have been convicted of white-collar crime in the past 10 years. The database provides extremely limited instrumental value but has a tremendous impact on the life of the offender. Once listed, registrants will find themselves statutorily blacklisted from their typical vocation, and largely ostracized from the professional community writ large. While criminal registries are flawed mechanisms with no evident value, they continue to proliferate across the United States. Utah legislature generated the registry in hopes of curbing this trend of rampant fraud in the state. However, the registry is a reactionary measure that does not address the underlying issue. While the Utah legislature is perhaps correct in that something must be done to curb this widespread trend of fraud, the registry will not alleviate the preexisting vulnerabilities that facilitated the fraudulent activity in the first place. The registry is a mechanism of shame that will ostracize the offender while leaving the underlying culture of naïve trust unmodified.
Impact of Criminal Registry
The Utah White-Collar Crime Offender Registry blacklists registrants from working in any financial institutions and assigns a general stigma of distrust. Those listed on the registry must follow certain reporting requirements, and disclose their criminal background to employers. Unsurprisingly, these institutional methods of enhancing social shame have been shown to have seriously negative impacts on the registrant’s reintegration with society. Studies on the effects of broad notification policies on the recidivism of convicted sex offenders showed that the registry exponentially enhances the likelihood of recidivism, and drastically impedes reintegrating an offender into normative society. Data from a sample of 6,064 male offenders convicted of at least one sex crime between 1990 and 2004 showed that (8%) of offenders had new sex crime charges and 299 (5%) offenders had new sex crime convictions. These results cast doubt on the effectiveness of broad registry policies in preventing repeat sexual assault. The data shows that a third of the charges that precipitated from the registry were unsubstantiated, and the registry failed to prevent harm in the remaining instances. The impact and efficacy of criminal registries have been studied ad nauseam over the past 25 years. The evidence conclusively suggests that criminal registries to not prevent recidivism, and may actually increase the likelihood of reoffending. However, researchers interested in public policy have noted that laws may have a symbolic as well as an instrumental function. And while criminal registries demonstrably fail to achieve their desired instrumental end-state, states continue to reinforce preexisting registry schemes and even generate new modes of criminal registry in order to reinforce the symbolic function of the criminal registry.
The criminal penalties for white collar crimes vary. Most of the laws authorize a monetary fine, a prison sentence or a combination of the two. The criminal laws authorize maximum penalties, which are often quite severe. Most defendants, however, receive less than the maximum sentence. Courts often follow sentencing guidelines, which may vary depending on the jurisdiction. Defendants without a significant criminal record may be sentenced to probation, a suspended jail sentence or a jail sentence far shorter than the maximum. They may have fines levied against them, and may be required to forfeit any profits or pay restitution to their victims. There is a common belief among many members of the public that defendants convicted of white collar crime get to do “easy time” in comfortable, minimum-security institutions. This is a myth. While many sentences for white collar crimes are served in minimum-security institutions, there is no guarantee that this will happen. The decision on where a person convicted of a crime serves his or her sentence is usually a matter left to the discretion of the correctional authorities (in the federal system, this is the Federal Bureau of Prisons). While efforts are made to place prisoners in an appropriate facility, there is no certainty that a white collar defendant will always be in a minimum-security prison.
A civil case that arises out of a white collar criminal prosecution could be brought by the government, by the victims of the crime or by both. A civil action brought by the government might seek disgorgement, or turning over to the government, any profits obtained because of the crime, restitution or repayment, to the victims of the offense or other damages that may be provided by law. In some cases, the government may be able to seek asset forfeiture, which means that anything purchased with the proceeds of the offense would be seized by the government. Victims of white collar crimes may choose to bring their own civil actions. These actions would seek to recover for any financial losses suffered because of the offense.
Employment And Social Consequences
In addition to criminal and civil penalties, a person who is convicted of a white collar crime may have difficulty finding employment and face social stigma. Because so many white collar crimes involve deceit or dishonesty, employers may be reluctant to hire an individual who has been convicted of such a crime. In addition, a criminal conviction may prevent a person from obtaining a professional license or be cause for losing such a license. Further, if a non-United States citizen is convicted of a crime, he or she may face removal and other immigration issues. For example, if a lawful permanent resident, who is lawfully living and working in the United States on a work visa, is convicted of a white collar crime, he or she may be removed. In addition to removal, a conviction may adversely affect a lawful permanent resident’s ability to become a United States citizen.
Consequences of white collar crime
Clients can lose their reputation and even their freedom as a result of these crimes because the penalties include fines, restitution, loss of personal property, or a long prison sentence. With many financial crimes, the prosecutor typically seeks enhanced penalties, which will prevent you from obtaining future employment. White collar crime is the terminology used to describe those crimes perpetrated (mostly) in the office or “white collar” environment. Non-violent in nature, they tend to be treated differently by the courts. On one hand the white collar defendant is not accused of doing physical harm in the perpetration of the crime, and therefore when it comes to determining the sentence for such crimes the courts are less likely to put white collar criminals in the same “classification” as those that have committed acts of violence. On the other hand, white collar crimes account for $200 billion in loss each year, a number far higher than that of more “traditional” crimes like burglary or theft. This fact prompts greater scrutiny from law enforcement and justice officials. When you have been accused of a white collar crime such as embezzlement or computer fraud you must respond immediately by hiring an experienced white collar crime lawyer who understands all of the complicated issues, legal and factual, that surround the prosecution of a white collar case.
Differences in Treatment of Suspects
While the courts attempt to provide equal treatment to all defendants, those that have committed white collar crimes are often not judged as harshly by many involved in the investigation. This could lead to preferential treatment in negotiations for plea bargains, pretrial releases and when sentences occur. However, the difference in treatment is often due to the lack of violence when these crimes occur. Physical assault and battery of anyone are lacking in most cases where a professional has violated the law through interactions with his or her business. Variations of the accused often demand a restriction of movement when the person may be violent or commit further illegal acts when on his or her own recognizance. But, persons that have no history of harming others are often trusted to be out of jail while the trial is ongoing. The only other alteration to this would be if he or she is a flight risk and may leave the state or country while he or she is awaiting a verdict. Those that commit nonviolent crimes are often cooperative with both defending and prosecuting lawyers. They understand the professional world and are calm and friendly during all proceedings in many instances of these cases. When the court has little comprehension of what the crime entails, or if it is unduly complicated, the only possibility for legal action against the accused may lie in a plea bargain. These could be unfairly lenient to ensure some consequences are enacted through a portion of what may be issued against a more violent criminal. The sheer complexity of many of these court issues causes prosecution to be laxer with those that are expert enough to ensure court proceedings are so difficult that they are left with only minor penalties to issue.
White Collar Criminal Lawyer
When you need a criminal defense lawyer who handles white collar crimes, please call Ascent Law LLC for your free consultation (801) 676-5506. We want to help you.
8833 S. Redwood Road, Suite C
West Jordan, Utah
84088 United States
Telephone: (801) 676-5506
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