If you face white-collar crime charges, you may wonder what you’ve done that is worthy of prosecution. After all, it is easy to feel like white-collar crime has no victims. Perhaps you only really “hurt” other companies. Maybe you thought it was just all part of your job. You may wonder exactly what is white-collar corporate crime.

White-collar corporate crime is not usually something you seek out and plan to do. Instead, you commit a crime at a legitimate job for your employer’s benefit. You may not think of yourself as a criminal or see your wrongdoing as criminal. Corporate crime is one small subsection of white-collar crime. Let’s look at what it is and who it hurts. 

Corporate Crime is a White Collar Crime

According to the FBI, “the term ‘white collar crime’ was reportedly coined in 1939 and has since become synonymous with the full range of frauds committed by business and government professionals. White-collar crime is generally non-violent in nature and includes public corruption, health care fraud, mortgage fraud, securities fraud, and money laundering, to name a few. These scams can destroy a company, devastate families by wiping out their life savings, or cost investors billions of dollars.”

White-collar corporate criminals may operate within a Ponzi scheme or money laundering operation without even realizing what is happening. However, fraud is the most common corporate crime. Some of the more common ways people engage in white-collar corporate fraud include:

  • Accounting schemes
  • Self-dealing by corporate executives
  • Obstruction of justice
  • Deceiving investors, auditors, and analysts about the financial condition of a business
  • Manipulation of financial data, share price, or other corporate valuation measurements 
  • Keeping financial performance artificially inflated based on fictitious performance indicators provided to the investing public (1)

Statistics on Corporate Crime

In 2020, there were 94 cases reported to the US Sentencing Commission involving an organization such as a business or non-profit. In those cases, 61.7% involved at least one related individual who was separately indicted in addition to the organization.

12.3% of the organizations sentenced had a history of misconduct. So, if you don’t want to get indicted for criminal corporate activity in the future, move carefully in any organization you are at now. Also always do some checking around before accepting any new positions.

Falsification of Financial Information

The FBI recognizes many kinds of corporate white-collar crime. Many business people who think they are getting away with something have just not yet faced charges. Some specific types of corporate white-collar crime include:

  • False accounting entries or misrepresentations of financial condition
  • Fraudulent trades designed to inflate profits or hide losses
  • Illicit transactions designed to evade regulatory oversight.
  • Self-dealing by corporate insiders
  • Insider trading (trading based on material, non-public information)
  • Kickbacks
  • Misuse of corporate property for personal gain
  • Individual tax violations related to self-dealing
  • Fraud in connection with an otherwise legitimately operated mutual hedge fund
  • Late trading
  • Market timing schemes
  • Falsification of net asset values

If you see one of the crimes above taking place and impede the investigation of the SEC, SFTC, or other law enforcement, you can face obstruction of justice charges. Even as a bystander who knows what is happening but does not disclose it to the proper authorities, you can end up serving time. (1)

What Happens Next?

Whatever your corporate crime, you may face consequences.  According to Cornell Law School, “the penalties for white-collar offenses include:

  • fines
  • home detention
  • community confinement
  • paying the cost of prosecution
  • forfeitures
  • restitution
  • supervised release
  • imprisonment

Federal Sentencing Guidelines suggest a longer prison sentence whenever at least one victim suffered substantial financial harm. However, sanctions may be less if the defendant takes responsibility for the crime and assists the authorities in their investigation.”

Supervising Criminal Activity

No matter what you’ve done to “help” your business, if it is criminal activity or you oversee an illegal activity, then you are responsible for the crime committed. Past cases show that an executive-level position requires staying aware of what is happening in your company. 

The federal government agencies have successfully convicted high-level executives of crimes committed by their employees. The idea is that the executive probably knew and approved of the criminal activities. In many cases, the executive ordered the employees to commit the crimes.

We Can Help

If you find yourself facing prosecution or arrest for a white-collar crime, you need a defense you can count on. At Hogan, Edwards, and Blue, we focus on criminal defense that includes a thorough investigation into what happened and how much proof there is of your involvement. We counsel you on how to talk with authorities about the activity. We walk with you through every step, up through a trial if necessary. In the best-case scenario, your charges may be dropped or reduced. We are on your side. Contact us today and get started mounting your defense. Find out how we can help.

 

  1. https://www.fbi.gov/investigate/white-collar-crime