At one time the “victims” of white collar crimes were typically businesses, organizations, corporations or the government. Today, this is no longer the case. No one is safe from people who use unscrupulous and fraudulent means to unlawfully gain money or property.
Fraudulent schemes and scams, some of which are designed simply to gain personal and private information of others, are on the rise:
- Adoption Scams
- Charity Donation Frauds
- Disaster Relief Frauds
- Debt Collection Scams
- Financial and Foreclosure Rescue Scams
- Funeral and Cemetery Plot Scams
- Home Repair Scams
- Illegal/Fake Online Pharmacies
- Internet Phishing and Hacking
- Investment Frauds
- Jury Duty Scams
- Pension Plan Fraud
- Ponzi and Pyramid Schemes
- Social Security Card Fraud
- Sports Memorabilia Fraud
- Sweepstakes, Lottery and Contest Scams
- Timeshare Fraud
- Work at Home Scams
Of all the white collar crimes, the “schemes” are the most heinous because the targets, often regular people, can end up losing their entire life savings, their homes or money that they just can’t afford to lose – and in the case of identity theft, their good credit and/or reputation.
Mass Marketing Fraud, Telemarketing Fraud and Internet Crimes
A lot of the white collar schemes on the list above fall into the category of mass marketing fraud, or simply marketing fraud. These are crimes committed through the use of communications such as deceptive telemarketing phone calls, bulk mailings, falsified personal letters, spam emails, internet hacking and online websites. While the elements of the actual schemes may differ, the key feature of marketing fraud is that a person is given outright false or misleading information in order to either directly obtain money or indirectly by the gathering of personal information, which will be used later by the offender in some type of identity theft for financial gain. The people who commit these crimes are good at what they do and understand human behavior, using this knowledge to con, manipulate and defraud.
Depending upon the methods used in the perpetration of the fraud, it may be prosecuted as either a misdemeanor or a felony; at the civil, state and/or federal level; and a wide variety of laws may be broken such as:
- Conspiracy – 18 U.S.C. § 371
- Embezzlement – CPC § 503
- False Personation and Cheats – CPC § 528-539
- Filing A False Document – CPC § 115 and 18 U.S. Code § 1001
- Financial Elder Abuse – CPC § 368(d) and CPC § 368(e)
- Forgery and Counterfeiting Laws (State) – CPC § 470-483.5
- Forgery and Counterfeiting Laws (Federal) – 18 U.S. Code Chapter 25
- Forgery of Credit Card Information – CPC § 484f
- Fraud and related activity in connection with identification documents, authentication features, and information – 18 U.S. Code § 1028
- Fraudulent Use of Credit Card- CPC § 484g
- Grand Theft – CPC § 487
- Identity Theft – CPC § 530
- Identity Theft (Aggravated) – 18 U.S. Code § 1028A
- Mail Fraud – CPC § 182 and 18 U.S. Code Chapter 63
- Publication of Credit Card Information- CPC § 484j
- Wire Fraud – 18 U.S. Code § 1343
Real Estate Fraud
Real estate fraud is a broad category used to describe any type of deception to gain money or property by illegal means. Crimes include things such as real estate agents utilizing fraudulent qualifications; improper house flipping where either all the information about the property is not presented or the value is misrepresented; falsified and elevated loan applications with conspirators dividing the excess proceeds; as well as outright acts to defraud a person out of their home or money.
- Mortgage Fraud – This is a subset of real estate fraud that includes illegal acts that involve misrepresentation of information on mortgage and loan documents. There are two main types of mortgage fraud: “Fraud for Housing” in which a person submits falsified or incomplete information in order to qualify for a loan, to get better terms or to obtain subsidized housing for which he or she is not eligible; and “Fraud for Profit” in which a real estate professional (or a person representing himself as such) commits fraud to illegally obtain money from a real estate transaction.
- House Stealing – Also called housing theft, this is a combination of combination of identity theft and mortgage fraud in which someone falsifies title deed transfer documents, quite literally stealing your home out from under you. Perpetrators often target vacant or vacation homes, but there are some criminals who have sold occupied homes to buyers who were satisfied with just seeing pictures.
- Straw Buyers – A straw buyer is a person who uses his financial information to obtain a loan for someone who would not qualify for it. Unlike co-signing, the straw buyer is the one who is fully responsible for the loan and has provided information to the lending agency that he will occupy home and make the payments. Some straw buyer purchases are done by well-meaning friends and family trying to help someone with poor credit, with arrangements for them to pay the mortgage privately or outright transferring ownership through a quitclaim deed. In contrast, “straw buyer schemes” are committed with the intent to defraud and obtain money illegally, either by misleading the person signing the paperwork into thinking they are either helping someone get a better deal on a loan or that they are investing in real estate for profit (leaving him with the mortgage afterwards) or in collusion with the straw buyer to obtain a loan that is higher in value than the home (and splitting the proceeds).
- Rent Skimming – This refers to using the proceeds from a rental property during the first year of owning it without applying the revenue to the mortgage or deed of trust. Designed to protect the bank, the purpose of laws against rent skimming are to stop someone from pocketing the rent and having a home go into foreclosure. Single or first offenses will be handled at the civil level (Civil Code 890) but repeat offenders can be charged criminally.
- Foreclosure Fraud – A person pretending to be a foreclosure consultant offers assistance to help a person avoid losing their home but the true motive is to get either money for “fake services” or to steal the home. In the former, fees are charged in advance but nothing is actually done to save the home or a person is charged fees in excess of what should be charged (In California it is illegal for a foreclosure consultant to collect money before services are rendered). In the latter, the homeowner is told that by signing over the deed he will be able to reside in the home as a renter, ultimately being able to purchase it back. Instead, the person is evicted from the home by the person who has the deed because he technically owns it.
- Bait and Switch – This is a type foreclosure fraud but the victim is usually unaware that he is actually signing over the title deed to their home. Instead they are misled to believe that they are signing forms that will help them to lower their mortgage payments.
Depending upon the offense, acts of real estate fraud can prosecuted civilly or criminally, under a variety of California laws such as:
- Filing A False Document – CPC § 115 PC:
- Foreclosure Fraud – Civil Code 2945 and 2945.4
- Forgery – CPC § 470
- Grand Theft – CPC § 487,
- Mortgage Fraud – CPC § 532f
- Recording Forged Deeds – CPC § 115 PC
Technically speaking, petition mills fall under the category of bankruptcy fraud however they are distinguished from other types because they are perpetrated by a third party who uses fraud to take advantage of and obtain money illegally from a person who is usually in a desperate financial situation. Posing as financial advisers, credit counselors or paralegals, perpetrators charge fees with claims that they will help a person get out of debt, file bankruptcy or prevent foreclosure when in reality it’s just a “dog and pony” show with falsified paperwork, fake bankruptcy filings or/or bait and switch of documents. People who commit this type of crime often take the time to set up elaborate procedures and offices that make it appear that they are actually working to help.
Legal Defenses for White Collar Schemes
Because of their nature of outright fraud, planned manipulation, deception and theft of assets; these white collar schemes and scams are some of the most difficult to defend. If there is clear cut evidence, one possible strategy is having an attorney work with the prosecution in an attempt to get the charges or penalties reduced. Other defense strategies for white collar schemes include:
- Claim of Good Faith or No Criminal Intent – You believed in good faith that the information that you provided was, to the best of your knowledge, true and that you had no intention to defraud or commit a criminal act.
- Claim of Insufficient Evidence – The burden of proof is on the prosecution and if there is not enough evidence, your attorney may pursue this defense and get the case against you dropped.
- Claim of Innocence (False Accusations) – You can show that you did not commit the crime and were falsely accused.
Learn More About A New Breed of White Collar Crimes →