White Collar Crimes

Several corporations, non-government organizations (NGOs), and government organizations have gone under due to financial fraud. Several fraud cases lack evidence and are dismissed in court, and others take longer to solve. This has led to massive financial problems for companies, employees, and also the government. Financial crimes are not only committed against corporations only, but some individuals are victims of the same. These crimes can happen through bank transactions, mobile money transactions, cheques, or even cash. These financial frauds fall under the spectrum of white-collar crimes.

You need to seek help from a criminal attorney if you or your company are facing white-collar criminal charges. You can reach out to the Long Beach Criminal Attorney and get legal representation on your case. Our lawyers will examine your case, determine the charges being made against you, and represent you in a court of law.

To learn more or to avail yourself of a free legal consultation on the details of your case, contact us anytime 24/7 at (562) 308-7807.

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What Is a "White-collar Crime?"

White-collar crimes are non-violent crimes committed against individuals and organizations for financial benefit. The FBI, which is the main agency involved in investigating these crimes, says that these crimes are characterized by manipulation, deceit, violation of trust, and concealment. The drive behind white-collar jobs is to obtain or avoid losing money, resources, possessions, or services. In several cases, the charged individuals are out to seek security for a personal or business advantage. The law criminalizes any acts of financial fraud that leads to loss of money or property.

An example of white-collar crime is falsifying a company’s finances to deceive auditors or supervisors. Dishonest investment, whereby returns are exaggerated, and risks are non-existent, also falls under white-collar crimes.  

White-collar crimes are often associated with educated and rich people of high social status. Most white-collar crimes are crimes committed by an individual of decorum and high social rank in their profession.  

Difference between White-Collar Crime and Blue-Collar Crime

Blue-collar crimes are crimes committed mainly by people from lower social ranks, whereas white-collar crimes are crimes committed by individuals from high social rank. Some blue-collar employees include construction workers, production laborers, janitors, millwrights, and other casual workers. These workers are paid minimum wages while white-collar workers have high-end jobs like CEOs, accountants, doctors, and others.        

Blue-collar crimes are not a formal legal grouping of crimes, but informal. Blue-collar crimes do not require complex planning but are immediate, like robbery. Some of the common blue-collar crimes include:

  • Sexual assault
  • Burglary and theft
  • Armed robbery
  • Drug abuse
  • Drug trafficking
  • Break and entering

White-collar crimes include:

  • Tax evasion
  • Stock fraud
  • Corporate fraud

Common White-collar Crimes

  1. Corporate Fraud

Corporate fraud has been named as the leading white-collar crime by the FBI. Corporate fraud causes massive financial losses to investors, causes infinite damage to the national economy, and loses investors’ trust.  The FBI focuses its resources and efforts on self-dealing cases by company executives, accounting schemes, and obstruction of justice.  Most accounting schemes are created to mislead investors, analysts, and auditors about a company’s correct financial status or an enterprise entity.   By manipulating and corrupting financial statements and data, evaluation measurements, and cut-price of the company, the financial performance may remain exaggeratedly inflated centered on fabricated performance indicators presented to the investing body.

Investigators focus on the following factors to determine the possibility of corporate fraud:

  • Fabrication of any financial information
  • False account entries and misrepresentation of financial status
  • False trades meant to inflate cover up losses or make-up profits
  • Illegal transactions that are planned to avoid regulatory inaccuracy
  • Misuse of company’s resources for individual gain
  • Tax evasion and tax-related irregularities
  • Trading based on non-public information
  • Forgery of net asset worth
  1. Money Laundering

Money laundering is a crime of taking money from illegal activities like drug trafficking and making money appear like legal earnings. This kind of money is often referred to as “dirty money,” and money launders make it appear legal, also known as “clean money.” The investigators examine not only the laundering process but also the criminal activity involved in making money.  Some of the criminal activities involved in money laundering include drug trafficking, human trafficking, healthcare fraud, terrorism, and corruption. 

Culprits uses several legal activities covering up dirty money like international trade, real estate investment, money market, virtual currency, and expensive metals. Money laundering follows three main steps:

Placement — This is the process of placing the dirty money into the legal, financial system

Layering — This involves concealing the source of dirty money by creating a sequence of transactions and accounting tricks.

Integration is the last step of withdrawing money from the legalized financial systems and used by culprits.

Not all money laundering activities are as complex; some are very simple. For instance, a legal business owned by a criminal can be used to “clean” money by inflating the business’ profits.  The authorities, especially the FBI, coordinate with other parties to detect and deter money laundering activities since it can be hard to bring criminals to justice. They work with parties like:

  • Federal, local, and state law enforcement agencies to identify and deter all money laundering threats
  • International partners to aid in addressing the progressively sophisticated global financial system
  • All other sections of the market that are at risk of money laundering activities and threats
  1. Cyber Crime

Cybercrimes are computer-related crimes like cracking, hacking, and phishing.

  • Hacking: Gaining access to a regulated system using a security weakness. Hackers can overrun commercial and government sites and obtain private data about users. This activity disrupts business activities, government operations, and leads to loss of money. 
  • Cracking: Involves invading software to get encrypted codes and remove copy security. It also involves invading security devices in computer networks and gaining access to other people's private information.
  • Phishing: Involves obtaining password and user’s information through email scams. These emails ask users to link their accounts and input their personal data. Such links contain malware and gather personal information for illicit uses.
  1. Securities and Commodities Fraud

Securities and commodities fraud is often misunderstood as part of corporate fraud. This fraud involves culprits passing themselves as investors by falsifying company information and using inside information used in decision making. The culprits use corporate information to commit fraudulent investment schemes. Some of the most common categories of securities and commodities fraud patterns include:

Investment Fraud

These schemes involve the illegitimate sale of financial investments. Such schemes promise its victims high yield profits with no or low risks, unregistered security, and overly consistent profits. Most of these schemes target certain groups, such as religious groups, ethnic groups, and unemployed individuals.  These groups are easy to build trust and share common interests making it easy to manipulate. Most of these perpetrators are professional financial advisors or familiar people who have already won their victims’ trust.  Common investment frauds include:

  • Ponzi Schemes: They involve alleged returns to current investors by new investors. They are characterized by factors like; unregistered investments, no risks, inconsistent returns, high returns, and sophisticated strategies
  • Pyramid Schemes: New participants pay money to already existing participants. Participants receive commission after enlisting new participants. Most of the pyramid schemes are concealed as multi-level marketing plans.     
  • Prime Bank Investment: Also known as trading program fraud, these schemes have culprits who claim to have access to the undisclosed trading programs sanctioned by huge financial organizations like the Federal Reserve Bank or World Bank. The culprits use complex financial terms to lure the victims and promise insurance from loss of investments.
  • Advance Fee Fraud: These schemes make their victims pay upfront fees to harvest greater profits. Culprits claim this advance fee is to cover for costs or participation fees.  After making the first deposit, victims are convinced to pay another fee for unanticipated costs. 

Commodities Fraud

This is the illegal sale of semi-finished commodities or raw materials that are similar to each other like coffee, gold, and orange juice.  The criminals convince investors using false information and complex sales tactics.  The culprits create non-existent financial statements to show investments to appeal to investors.  They instead use the cash from investors for other activities. Two common commodities used in these fraud schemes are Forex (foreign currency exchange) and expensive metals like silver and gold. 

Broker Embezzlement

Broker embezzlement involves illegal and unauthorized activities by intermediaries to steal from their clients.  The culprits do this by falsifying the client’s financial documents, personal documents, and tampering with money transfer. 

Market Manipulation

This scheme is also known as “pump and dump.” It involves corrupting minor volume stocks on small over-the-counter markets. These schemes aim to inflate penny stocks’ prices so that the culprits can sell their stocks at a high price and make huge profits.

Promissory Note Fraud

These schemes are short-term debt tools used by unpopular or nonexistent companies. The culprits promise high profits with no or little risks. Perpetrators use promissory notes to avoid auditing and regulatory evaluations.  Several promissory notes used in committing this type of fraud are securities that require registration from the Securities and Exchange Commission and the state they are being sold.

  1. Insurance Fraud

Insurance fraud involves the following:

  1. Committing an act that is anticipated to obtain benefits to which the culprit is not entitled deceitfully
  2. Denying the insurer the benefits to which he /she is entitled.

One of the most common frauds in insurance is Life Insurance Fraud where one fakes his/her own death to claim life insurance benefits. In some cases, the beneficiaries of life insurance murder the insured to claim the benefits. Another case of insurance fraud is health care insurance fraud. Insurers, providers, and patients often commit this. Providers may bill for healthcare services they did not offer or perform needless surgeries to claim insurance benefits.

Criminal Charges for White-Collar Crimes

Charges for white-collar crimes are often combined. They include

Imprisonment

Depending on how much money is involved in fraud or financial crime, perpetrators face different terms. Some receive less than a year, and others face up to 20 years. Criminals are imprisoned in government institutions or put under house arrest.

Fines

At times the court of law fines all culprits involved in white-collar crimes. Fines are mostly above the money involved in fraud. Note that you can also face criminal fines as well as imprisonment or jail term. Thus, you will need the services of a top-notch defense lawyer to try and fight these charges.

Restitution

The law of restitution is often referred to as the law of loss-based recovery. A court of law can order the defendant to surrender all the gains to the claimant. At times, the court orders compensation. Compensation involves ordering the defendant to pay all the losses incurred by the claimant. The law of restitution is mostly used in white crimes when the property/money in question cannot be traced or recovered. 

Community Service

When the reported white-collar crime is not very serious, the court of law orders the accused to do community work as a form of punishment. Community service is unpaid work done to better the community at large. The defendant does not receive any compensation at all. Community work mostly involves helping in shelters and cleaning streets.

Probation

This form of punishment by the court of law is whereby the defendant is put under strict supervision instead of going to prison. If the defendant breaks the probation laws, he or she will be sent to prison or fined. 

Disgorgement

This punishment involves surrendering of all profits acquired as a result of illegal activities. This punishment is usually used as a remedy to prevent future violations of related crimes.

Find a Criminal Attorney Near Me

As much as a prosecutor has a challenging task of proving that you committed a white-collar claim against them, you also require a skilled criminal defense attorney to fight the allegations. The attorney should be conversant with California criminal law and have the ability to use defense strategies based on the facts of your case.  That is what you will get when you work with Long Beach Criminal Attorney Law Firm. Get in touch with our attorneys at 562-308-7807 to discuss the best possible defenses for your case.