Many people may have heard the term “white collar crime” on the evening news or on television dramas. This is a catch-all term used to refer to a number of different illegal activities. The name is derived from the fact that these types of criminal offenses are usually perpetrated by people who work for major corporations, banks or financial firms. In general, white-collar crimes involve non-violent attempts to obtain money or goods through illegal means. This can include crimes like:
- Money laundering
- Tax crimes
In many cases, white collar crimes involve a system of deception that is used to trick people or institutions out of their money. They can also include attempts to hide money from the federal government. Although these schemes can be complex, most white collar crimes can be broken down into a few categories.
Types of White Collar Crimes
One of the most common types of white collar crimes is called embezzlement. This illegal action occurs when someone who is entrusted with money uses those funds inappropriately or in a way that is not allowed by their positions. Embezzlement can occur in:
- Financial advisor/client relationships
- Employer/employee relationships
- Situations involving public employees who are in charge of public funds
Whatever the case, embezzlement boils down to a person or group of people who misuse money for which they are responsible. For example, suppose Jack is an employee of a building contractor. The head contractor entrusts Jack with $5000 for building supplies.
Jack uses $2500 to purchase cheap supplies from a disreputable source and pockets the remaining cash. Jack could face charges of embezzlement for misusing the money that was entrusted to him.
The crime of money laundering is often associated with organized crime. In reality, money laundering can occur in many different environments. Essentially, money laundering is the act of taking funds associated with illegal activities and passing them through a series steps so that the money is difficult to trace to its source. This usually involves several steps:
- Money from an illegal source is deposited into a bank account
- The money is then dispersed through many different purchases and withdrawals
- The money is then “cleaned” by purchasing legitimate items
For example, suppose that Deb works for a drug dealer. The dealer gives Deb $1000 worth of profits from illegal drug sales. Deb deposits that money into her bank account. She then moves the money in to investment accounts, savings accounts and cash withdrawals. She can then use that money to deliver the $1000 sum back to the drug dealer. However, the money has now been covered up by several steps through a legitimate financial institution. This makes the money hard to trace to its source.
There are many different kinds of fraud. However, all types of fraud involve the use of deceit, trickery or misrepresentation to deprive another person or institution of money or goods. The most simple example would be a person using a false name to receive a payment. Types of fraud can include:
- Tax fraud
- Securities fraud
- Mail fraud
Tax fraud can occur when a person reports a false amount of income on their yearly taxes. This can range from an individual who claims to have earned less than the actual amount up to entire corporations who misrepresent their annual earnings.
Securities fraud involves the stock market and the value of a company’s shares. This can occur if a company reports falsely inflated earnings to encourage shareholders to invest more. It can also occur when a corporation lies about its profits to avoid tax penalties.
Mail fraud is another common type of fraud. It can involve a person who uses a fake ID to accept packages intended for another recipient. Abusing the postal system may also incur charges of mail fraud.
This is a very common white collar crime. It may be committed by an average middle-class worker or by the head of a billion-dollar corporation. At the most basic level, tax evasion simply means that a person avoids paying the entirety of their federal tax bill.
It may be as simple as entering false amounts into tax documents to avoid paying a higher tax rate. On the other hand, it might be as complex as changing the will of a dead relative to move property around to avoid estate taxes.
Whatever the case, white collar crime can lead to serious criminal charges. As soon as charges are filed, it’s time to hire a lawyer. A lawyer may be able to use legal defense strategies to help defendants avoid prosecution or obtain a plea bargain in court.
If you have been arrested for a white-collar crime, it’s crucial to contact an experienced attorney. Brett A. Podolsky will fight to protect your rights. Call 713-227-0087 or email for a confidential consultation today!