The term “white-collar crime” refers to non-violent crimes, which are designed to produce a financial gain. Typically, this financial gain is obtained using a form of fraud or deception. Criminologist Edwin Sutherland is credited with creating the term “white collar crime” back in 1939.

Which Crimes Are Considered White Collar Crimes?

White collar crimes typically involve deceit, concealment or violation of trust. The following is an overview of crimes considered to be examples of white collar crimes.

Embezzlement

Embezzlement is a white collar crime that involves theft, misappropriation or intentional mismanagement of property to which one has lawful access to. Frequently, embezzlement cases involve someone abusing their position of trust to misappropriate the funds.

Forgery

Forgery is creation or alteration of otherwise genuine documents, with intent to deceive or injure another. Forgery charges are brought for falsification of many different objects, such as passports, drivers licenses, credit cards, debit cards, deeds, and currency. Frequently, forgery charges are brought in conjunction of criminal possession of forged instruments as well as aggravated identity theft charges.

Money Laundering

Money Laundering is a white collar crime that involves hiding or concealing the proceeds of illegal activity, through a series of financial transactions. The numerous financial transactions obscure the source of the money and make the funds appear “clean” or legitimate. Money laundering can be charged under both federal and New York State law.

Scheme to Defraud

Scheme to Defraud is a New York State charge that involves systematic, ongoing and continuous course of conduct, which is designed to defraud another or obtain property or anything of value from another individual. Under New York Law, a scheme to defraud can be charged in cases where there is the intent to defraud of more than one individuals.

Wire Fraud

Wire Fraud is a federal charge that criminalizes the use of wire, radio or television communications in interstate or foreign commerce for any scheme or artifice to defraud, or for obtaining money or property by means of false or fraudulent pretenses, representations, or promises. Wire Fraud is the all-encompassing charge that applies to any type of criminal conduct that involves the use of wires.

Violations of Foreign Corrupt Practices Act

Giving bribes to a foreign official in order to obtain or maintain foreign business is a white collar crime that is prosecuted under the Foreign Corrupt Practices Act. The federal government is able to prosecute these charges, even if all the conduct took place outside the United States.

Who Investigates White Collar Crimes?

White Collar Crimes are investigated by a number of different local, state and federal authorities. The following agencies have oversight of investigation and prosecutions of white collar crimes.

  • Federal Bureau of Investigation,
  • Securities and Exchange Commission (although civil in nature, they oftentimes make criminal referrals to their counterparts),
  • Internal Revenue Service,
  • Department of Justice,
  • Department of Homeland Security,
  • United States Secret Service,
  • United States Postal Inspectors,
  • New York Attorney General’s Office Enforcement and Financial Crimes Bureau, AND
  • Many more agencies.

Are White Collar Crimes Prosecuted by State or Federal Prosecutors?

Both federal and state prosecutors pursue white collar investigations. Frequently, which prosecutor’s office prosecutes a white collar offense depends on which investigative agency uncovered the criminal conduct. For example, if the Securities and Exchange Commission unearthed stock fraud, the referral would be made to the U.S. Department of Justice (federal prosecutors). However, if the New York City Police Department discovered healthcare fraud, the matter would most likely be handled by the Attorney General’s Office or a local District Attorney’s Office.

What is the Statute of Limitations on White Collar Fraud?

The statute of limitations for white collar fraud cases depends on two things:

  1. What is the charge?
  2. Is the charge prosecuted under federal or state law?

The severity and the nature of the charge controls the length of the statute of limitations. The more severe the charge is, the longer the statute of limitations period is. Importantly, the statute of limitations does not begin to run until after the conduct or crime is completed.

Federal White Collar Fraud Statute of Limitations

Under federal law, the statute of limitations on white collar crime cases is generally 5 years. However, under 18 U.S.C. § 3293(2), there is a 10-year statute of limitations for wire fraud and bank fraud charges if the offense impacts a financial institution.

New York White Collar Fraud Statute of Limitations

Under New York State law, the statute of limitations for misdemeanor charges is 3 years. For felony matters, the statute of limitations is 5 years. Importantly, the time does not start to run until after the conduct is complete. So in situations, where the scheme or conduct stretches over a number of years, the statute of limitations time does not begin to run until after the criminal conduct is over or the individual exits the conspiracy.

How Are the Investigations of White Collar Crimes Conducted?

Investigations of white collar crimes are controlled by how the conduct is discovered by the Government. For matters flagged by the Securities and Exchange Commission, FDIC or any other civil enforcement agency, the individuals will receive a subpoena for the production of documents and potentially a subpoena to provide on the record testimony. The records that are provided to the civil enforcement agency will be provided to its criminal counterparts i.e. FBI and the U.S. Department of Justice, who will then commence their criminal investigation.

If the investigation is starting with a criminal investigative agency, the agents will first attempt to obtain as many records as they can without alerting anyone to the existence of the investigation. These records may include bank records, intercepted communications (through the use of a wiretap), financial records, and video surveillance. After obtaining the layout of the land, the federal agents will identify individuals who are potentially involved in white collar fraud. These individuals will be characterized a “witness,” “target,” or “subject.”

Who is Considered a Witness in a White Collar Fraud Investigation?

A witness is an individual who the prosecutor believes possesses information that is relevant to the investigation. A witness is someone who is not suspected of doing any wrong doing. Rather, it is a person who the prosecutor believes will he helpful with providing information.

Who is Considered a Subject in a White Collar Fraud Investigation?

A subject is the category of persons that falls between witnesses and targets. A prosecutor does not necessarily think that the subject will be prosecuted. However, a subject is deemed to have engaged in some sort of criminal wrongdoing and may have partaken in the conspiracy or criminal activity. A subject is the most fluid category. That is because some subjects become targets, while others become witnesses.

Who is Considered a Target in a White Collar Fraud Investigation?

The target of the investigation is the person the prosecutor and the agents are investigating. The investigation is centered on building a case against the target and prosecuting that individual.

Do White Collar Crimes Result in Prison Sentences?

Some white collar crimes result in prison sentences. Under federal law, white collar crimes are punishable by imprisonment, a fine, or both imprisonment and a fine. In 2013, the U.S. Sentencing Commission estimated that 2/3 of offenders charged under the theft or fraud guidelines were sentenced to jail time. Under state law, misdemeanors and lower level felonies can be resolved without any jail time. There are no statistics available regarding incarceration on New York state white collar fraud cases.

The single most important consideration as to whether a white collar crime results in a prison sentence is the loss amount, of the amount of money that is attributed to being wrongfully obtained a part of the white collar fraud. The higher the loss amount is, the more probable it is that a white collar crime will result in prison time.

United States Sentencing Guidelines §2B1.1 contains the theft and fraud guidelines, which are applicable to white collar crimes. Under federal criminal law, the loss amount on white-collar cases is specifically factored into federal guidelines calculations. Although the guidelines, are not binding on judges in sentencing, they are still the starting point of the judge’s assessment of the case.

Do White Collar Prosecution Lead to Asset Forfeitures?

Yes, white collar prosecutions lead to forfeiture of assets. Asset forfeiture is a tool frequently used by federal prosecutors in white collar crime prosecutions. Asset forfeiture is the taking of the property derived from a crime, or involved in a crime. Oftentimes, white collar cases result in a large number of victims who lost money as a result of the criminal scheme. Without forfeiture, it is virtually impossible for victims of these offenses to recover their losses on their own.

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