If you were on a quiz show and were asked, “What is white collar crime?” how would you respond? In coming up with your answer, you may think of cases like Bernie Madoff, Enron, WorldCom, Exxon, InStock, Adelphia, or Tyco. Perhaps celebrity Martha Stewart or pro-athletes like Willie Gault and Daniel Ruettiger may come to mind.
Cases like these make news headlines. When we hear the phrase white collar crime we think of people in positions of power and high economic standing taking advantage of their situation to make money.
White collar crime, first described in 1939 by sociologist Edwin Sutherland, referred to crimes “by a person of respectability and high social status in the course of his occupation” that are non-violent and committed with the intent to achieve financial gain. Initially these were offenses by business professionals, members of corporations and government officials such as embezzlement, securities fraud, insider trading, tax evasion, bribery and securities fraud. This was in contrast to blue collar crimes which refers to crimes against person or property, whether they were actually violent or not, committed by a person from a lower social class.
But white collar crime has come a long way since the original term was used and it’s no longer a class of offenses that are always connected to a person’s social or economic status. The reality is that the socioeconomic line between who is charged with a white collar crime is definitely blurred and almost non-existent.
So the question remains, based on to today’s standards – what is white collar crime? Two characteristics that still hold true are that these crimes are considered non-violent and are motivated with the primary intent of financial gain. According to the FBI — “Lying, cheating, and stealing. That’s white-collar crime in a nutshell.” This pretty much sums it up – a white collar crime is any crime committed through some form of deception with the intent of financial gain.
With regards to the issue of intent as it relates to who is prosecuted for white collar crimes there are basically four types of people who are charged:
- “Clear” Intent – People who fully knew what they were doing was illegal but thought they could get away with it. These are crimes committed at the clear expense of someone else (be it a person or a company) to deliberately make money off of actions they knew were wrong. White collar crimes in this category are premeditated and may include an elaborate set up in order to pull off a scam or commit fraud.
- “Middle of the Road” Intent – These are offenders who are on the line with regards to intent for financial gain. In cases like these, the offense doesn’t include full knowledge that the actions would cause actual harm to another party (other than taking money that didn’t belong to them). For example, a person who out of financial desperation isn’t completely honest when filing income taxes, unemployment paperwork or applications for social service benefits.
- “Ignorant” Intent – This category describes the times when a crime has been committed but the person didn’t realize that what they had done was illegal. An example here would be an average person who casually learns something not readily available to the public from a friend about an upcoming change at his company that leads him to purchase or sell off stocks in that company. Technically, this falls under the category of insider trading.
- “No” Intent – Yes, as with all crimes, there are people who are charged who are actually innocent and once a charge has been made, the evidence shows that in the end there was actually no crime committed.
When it comes to the different types of crimes that fall under the white collar classification, all offenses are not created equal. Intent is just one factor that affects the severity of the prosecution. Another relates to whether there is a pattern of related felony conduct – two or more related felonies that involve fraud (in a single criminal proceeding) and resulted in the victim’s loss of at substantial money or assets. In California, when this type of aggravated white collar crime occurs, harsher penalties can be applied such as additional jail time and higher fines. California is notoriously tough on white collar crime evidenced by its harsh “Great Taking” allegation under CPC § 12022.6.
There was a time when white collar crimes were considered victimless because they targeted big corporations, the stock market or in the case of bribery, government officials. But sadly, in today’s world of fraud, scheming, and scams, the targets of crimes for financial gain can be anyone. White collar crimes have become more sophisticated and victims now include small business owners, families, senior citizens and people from all walks of life, many of whom end up losing their entire life savings because they were unfortunate enough to fall prey to someone else’s deception.
Being accused or charged with a white collar crime can have serious and immediate impacts on a person. Charges can result in a permanent criminal record, high fines, and prison. These nuanced offenses can be defended successfully with an attorney who has the knowledge and experience to deal with the pertinent issues.
Learn More About Old School White Collar Crimes →