White collar crime occupies a unique place in the public imagination. If all you go by are movies and TV shows, your idea of white collar crime probably looks a lot like Gordon Gecko doing shady dealings that will ultimately bring about his downfall.
But as is often the case, the truth is more complex. And despite the name, it’s not always black and white.
So to work out what a white collar crime entails, let’s take a look at some of its common definitions, a few major white collar crime examples, and how you need to respond should you find yourself accused of such an offense.
What Is White Collar Crime?
The term “white collar crime” was coined in 1939, reportedly by sociologist Edwin Sutherland. Even at that time, the term described a wide range of criminal activities. In particular, it refers to financial crimes.
The exact crimes that fall under this umbrella could include fraud, embezzlement, tax evasion, money laundering, insurance fraud, and insider trading, to name only a few key examples.
So why do they call it “white collar crime”? Well, that’s where the sociological explanation comes in.
Committing a crime requires three things: the motive, the means, and the opportunity. And it’s that last point that tends to separate white collar crimes from “blue collar” crimes.
A blue collar warehouse worker or retail associate can steal cash or physical products off the floor. But that’s about all their level of access allows them to do.
White collar workers, up to and including owners and managers, have an enhanced opportunity to commit theft due to their increased level of access. Rather than stealing physical goods, they may steal using both legitimate and illegitimate financial transactions.
Another distinction is that white collar crimes are non-violent. A blue collar criminal may use a weapon in an armed robbery. A white collar criminal will use fraud or dishonest financial trickery.
And rarely will a white collar criminal work in person. So while an optimal burglary will be non-violent, it wouldn’t usually count as a white collar crime as it requires the criminal to trespass somewhere they’re not supposed to be.
What Percentage of Crime Is White Collar?
If it’s done well and luck is on the perpetrator’s side, they may commit any number of crimes without leaving any evidence that any wrongdoing ever took place. Hence, concrete data on how prevalent they are is difficult to come by.
We know that 3% of federal prosecutions concern white collar crimes. That doesn’t sound like a lot, but it leaves out a few key variables.
For one thing, the best estimates suppose that 90% of white collar crimes go unreported.
Wage theft — the act of paying workers less than they are legally entitled to — is a good example. Despite being perhaps the most common white color crime and costing workers billions in lost wages every year, it is seldom reported. And of those few white collar crimes that are reported, only around half ever make it to the prosecution stage.
Further, that 3% figure fails to account for over-policing of other crimes like drug offenses shifting the statistics away from white collar crime.
So a hard percent is almost impossible to produce. But we do know it’s widespread.
To illustrate the point, the cost of white collar crime is in the neighborhood of $1 trillion per year. By contrast, their estimates for the cost of street crime? Only about $15 billion per year.
Famous White Collar Crime Cases
Although they are underreported and the perpetrators don’t often make it to trial, there have been a handful of notable and very public cases of white collar crime.
By far the most famous would have to be the tax evasion case that put Al Capone behind bars. The famous mobster kept a tight-enough grip on his operation that the authorities couldn’t tie him to any of the bootlegging, racketeering, and murder he was responsible for. What they could make stick was $215,000 in unpaid taxes, which saw him sentenced to 11 years in prison.
The Enron accounting scandal is a more recent example. In 2001, executives at the energy giant exploited a series of accounting loopholes to hide billions of dollars in debt from its board of directors. When the malfeasance went public, several executives saw prison time while the company’s stock value plummeted from $90.75 per share to only $0.26 per share.
And more recently was the well-publicized Bernie Madoff scandal. With the dubious honor of coining the term “Ponzi scheme” Madoff ran an investment scam that defrauded investors of billions of dollars. Pleading guilty to 11 counts of securities fraud and money laundering, he was sentenced to 150 years in prison and ordered to pay $170 billion in restitution to the investors.
What Happens When You’re Accused of a White Collar Crime?
Although there are some well-known cases of premeditated financial malfeasance, many people who get caught up in a white collar case may not realize that they’re committing any wrongdoing.
Due to the nature of the crime, it’s easy for a situation to arise where a person may commit an illegal action without any intention of doing anything unlawful. Many crimes involve high-end corporate transactions or otherwise deal with moving money around. So it’s not hard to become involved in a transaction while not knowing that another party is part of a bigger scheme.
All the same, the federal government will often go after these unaware individuals because it’s easier to build a case against them than the true masterminds.
What happens next depends on the exact nature of the scenario.
As we said, most white collar cases never make it to trial. It’s much more common for the person in question can avoid charges by instead paying restitution to the wronged party. Or should the authorities become involved, it’s more common to make a plea deal than go to trial.
Whatever the case, having a white collar crime attorney in your corner would give the best chance of a positive outcome.
Finding a White Collar Crime Attorney
While everyone has an idea of what constitutes a white collar crime, we see that the reality is more complicated than we tend to assume. The definition is broad and flexible enough that it can be easy to run afoul of state or federal laws.
That’s why if you are accused of a white collar crime, you need to seek legal counsel immediately. An experienced defense attorney can navigate any potential criminal liability and defend you in court.
To ensure that your rights are protected, reach out to our experienced team providing defense in multiple criminal law disciplines without delay.
600 Cleveland St #1100
Clearwater, FL 33755