White-collar crime is a nonviolent crime often characterized by deceit or concealment to obtain or avoid losing money or property, or to gain a personal or business advantage. Examples of white-collar crimes include securities fraud, embezzlement, corporate fraud, and money laundering. White-collar crime causes a significant financial loss to investors and can damage the U.S. economy and investor confidence and can be investigated by a wide group of law enforcement entities including the Department of Justice (DOJ), Federal Bureau of Investigation (FBI), the U.S. Securities and Exchange Commission (SEC), the Commodity Futures Trading Commission (CFTC), the Internal Revenue Service IRS), the Department of Labor (DOL), the U.S. Postal Inspection Service, and state authorities. “White-collar crime” was coined by sociologist Edwin Sutherland in 1939 who defined it as a crime committed by a person of respectability and high social status during his occupation.
Examples of White-Collar Crime
The FBI estimates white collar crime costs the U.S. more than $300 billion annually. The FBI’s white-collar crime program focuses on investigations that can be regional, national, and/or international. “These crimes are not violent, but they are not victimless as white-collar crimes can destroy a company, wipe out a person’s life savings, cost investors billions of dollars, and erode the public’s trust in institutions.” Some common examples of white-collar crime are:
- A fiduciary acts in his or her own best interest rather than in the best interest of their clients.
- Intellectual property theft involves stealing from people or companies of their ideas, inventions, and creative expressions—known as intellectual property. This can include everything from trade secrets to proprietary products to movies, music, and software.
- Health Care fraud committed by medical providers who double bill (submitting multiple claims for the same service) or phantom bill (bill for a service visit or supplies the patient never received).
- Corporate fraud involving accounting schemes and self-dealing by corporate executives, obstruction of justice (activities designed to conceal this type of criminal conduct), falsification of financial information / financial conditions, fraudulent trades, insider trading (stock trading based on non-public information), kickbacks and misuse of corporate property for personal gain.
- Money laundering funneling “dirty” money from a criminal’s illegal income through layers of third parties to make the proceeds appear to be from legitimate sources.
- Securities and commodities fraud using complex investment vehicles to create fraudulent investment schemes (e.g., embezzlement, pyramid schemes, pump and dump stock trading).
- Economic espionage where foreign competitors deliberately target economic intelligence in advanced technologies.
Although typically the government charges individuals for white-collar crimes, the government has the power to sanction corporations as well for these offenses. The penalties for white-collar offenses include fines, home detention, community confinement, paying the cost of prosecution, forfeitures, restitution, supervised release, and imprisonment.