What Is Considered a White Collar Crime?

What Is Considered a White Collar Crime?

You Googled this phrase at 2am because something happened. Maybe the FBI left a business card at your office. Maybe your accountant got subpoenaed. Maybe you just watched the news about Sam Bankman-Fried getting 25 years and realized that your situation – the one you’ve been telling yourself isn’t a big deal – might fall into the same category as the biggest financial fraud in American history.

That’s the problem with “white collar crime.” The phrase covers everything from a $50,000 PPP loan exaggeration to a $65 billion Ponzi scheme. It includes the tech founder who inflated employee counts and the hedge fund manager who stole retirement accounts. The same label. Wildly different conduct. Sentences ranging from probation to 25 years.

Welcome to Spodek Law Group. Our goal is to give you real information about what white collar crime actually means in 2025 – not the Wikipedia definition, but the practical reality of how federal prosecutors think about these cases. We represent individuals facing federal white collar investigations across the country, and we believe you deserve to understand exactly what you’re up against before making any decisions.

The Category That Covers Everything And Means Nothing

Edwin Sutherland coined the term “white collar crime” in 1939. He was trying to make a point: wealthy professionals commit crimes too, and the criminal justice system was ignoring them. He wanted to shine a light on corporate misconduct.

Eighty-six years later, the term has become almost meaningless.

Heres what “white collar crime” actualy covers today: antitrust violations, bankruptcy fraud, bribery, computer fraud, counterfeiting, credit card fraud, economic espionage, embezzlement, environmental crimes, financial institution fraud, government fraud, healthcare fraud, insider trading, insurance fraud, kickbacks, mail fraud, money laundering, securities fraud, tax evasion, wire fraud, and public corruption.

Thats not a category. Thats a list of everything that dosent involve physical violence.

The FBI narrows it down to six main areas they prioritize: healthcare fraud, corporate fraud, money laundering, securities and commodities fraud, mortgage fraud, and intellectual property theft. But even that list is so broad that it captures everything from a doctor overbilling Medicare to a Wall Street executive manipulating stock prices.

If your trying to understand whether your situation counts as “white collar crime,” the answer is probly yes. The question that actualy matters is which specific statute applies, what the loss amount is, and whether prosecutors have decided to make an example of you.

$300 Billion In Damage, 4,332 Prosecutions: The Math Dosent Add Up

Heres a number that should make you think: white collar crime costs the United States between $300 billion and $1.7 trillion every year. Thats according to the FBI and the National White Collar Crime Center.

Now heres another number: federal prosecutors filed exactly 4,332 white collar crime cases in fiscal year 2024.

Lets do the math. If we use the conservative $300 billion estimate, and divide by 4,332 prosecutions, thats about $69 million in damage per case. But the average white collar case involves losses far below that. Most cases involve losses under $2 million.

So where are all the big cases?

There falling through the cracks. In 1994, federal prosecutors filed 10,269 white collar cases. In 2024, that number dropped to 4,332. Thats a 58% decline. And FY 2025 is projected to fall even further – to just 3,862 prosecutions.

The government isnt prosecuting more white collar crime. There prosecuting less of it. Even as the losses grow into the trillions.

But heres the part that should actualy concern you: when prosecutors ARE charging cases, there being more selective. There choosing cases they can win. Cases with clear evidence. Cases where the defendant made obvious mistakes. Cases where someone cooperated against you.

If your one of the 4,332 people charged in a given year, you wernt randomly selected. Prosecutors picked you specificaly.

25 Years Or 5 Months: Why The Same Label Means Nothing

Sam Bankman-Fried got 25 years in federal prison. Three years of supervised release. $11 billion in forfeiture. He was 32 years old when sentenced. He’ll be 57 when he’s eligable for release.

Martha Stewart got 5 months in federal prison. 5 months home confinement. 2 years supervised release. She was back on television within a year of her release.

Both are “white collar criminals.” Both committed fraud. The sentences differed by a factor of 60.

Heres why the label is meaningless: sentancing depends on the specific conduct, the loss amount, the number of victims, whether you cooperated, whether you lied to investigators, and whether you went to trial.

Stewarts actual insider trading wasnt even the crime she was convicted of. She was convicted of lying to federal investigators about the insider trading. The cover-up became the crime. And her loss amount was relatively small.

SBF stole billions. He lied on the stand. He showed no remorse. He victimized millions of customers. And he went to trial instead of pleading guilty.

Same category. Completley different outcomes.

The sentancing data from 2024-2025 shows wild variation:

– Robert Kowalski: 25 years for bank fraud embezzlement

– Abraham Yusuff: 14 years for $110 million identity theft

– Jose Huizar: 13 years for bribery and racketeering

– Terrence Pounds: 94 months for PPP fraud

– Changpeng Zhao: 4 months for Binance AML failures

– Caroline Ellison: 2 years after cooperating against SBF

– Nishad Singh: Time served for “remarkable” cooperation

The pattern isnt about whether its “white collar crime.” The pattern is about loss amount, cooperation, and how badly you handled the investigation.

Street Crime Costs $13 Billion. White Collar Costs $300 Billion. Guess Which Gets “Club Fed”

Heres an inversion that dosent make sense until you understand how the criminal justice system actualy works.

Street crime – robberies, burglaries, assaults, property crimes – costs America aproximately $13 to $15 billion annually. Thats the total economic impact.

White collar crime costs $300 billion to $1.7 trillion annually. Twenty to one hundred times more damage.

Yet street criminals go to maximum security prisons. White collar criminals go to minimum security federal camps – facilities with no fences, no cells, and recreation programs. The media calls them “Club Fed.”

The crimes that do more damage get less punishment.

This disparity has historical roots. When Sutherland coined “white collar crime” in 1939, he was pointing out that wealthy professionals were escaping justice. The term was supposed to change the system. Instead, it created a category that the system could treat seperatley – and more leniently.

Research shows white collar criminals are far less likely to be caught. They have access to expensive legal representation. There crimes are harder to investigate. And when there caught, there more likely to recieve minimum security placement.

Dorian Mackeroy of Florida is serving life in prison for an armed robbery in which he didnt injure anyone. Martha Stewart served 5 months for insider trading that cost investors millions.

The system isnt broken. Its working exactly as designed. Just not for the people you think.

The Six Categories The FBI Actualy Cares About

If you want to understand white collar crime in practical terms, forget the academic definitions. Focus on what the FBI actualy investigates.

Healthcare Fraud: Doctors, pharmacies, home health agencies, and other providers billing Medicare and Medicaid for services never rendered. This is one of the most heaviliy prosecuted categories because the government is the victim.

Corporate Fraud: Executives manipulating financial statements, hiding losses, overstating revenues. Think Enron. Think FTX. Cases where company leadership deceives investors about the true financial condition of the buisness.

Money Laundering: Disguising the proceeds of criminal activity to make dirty money appear legitimate. This often gets charged alongside other offenses because you have to launder the money you made from other crimes.

Securities and Commodities Fraud: Insider trading, market manipulation, Ponzi schemes. Anything that defrauds investors in stocks, bonds, or commodities markets.

Mortgage Fraud: Loan officers, appraisers, borrowers, and others who lie on mortgage applications or manipulate property values. This category exploded after 2008 and remains a priority.

Intellectual Property Theft: Counterfeiting, piracy, trade secret theft. Increasingly important as the economy becomes more knowledge-based.

If your conduct falls into one of these six categories, your facing prosecutors who specialize in these cases. They know the patterns. They know the defenses. They’ve seen it before.

Todd Spodek has represented clients facing charges in every one of these categories. Healthcare providers accused of overbilling. Executives accused of securities manipulation. Business owners accused of bank fraud. Each category has its own patterns – and its own defense strategies.

99% Of Defendants Are Individuals, Not Corporations

Heres something that should disturb you: when corporations commit fraud, individuals go to prison.

The statistics are clear. In 99% of white collar crime prosecutions since FY 2004, the defendant is an individual person – not a buisness entity. In FY 2024, only 44 out of 4,332 prosecutions were against corporations.

Companies pay fines. People serve time.

When Enron collapsed and cost investors $74 billion, the company declared bankruptcy. But Jeffrey Skilling served 12 years in federal prison. When FTX imploded, the company is gone – but SBF got 25 years. When Theranos defrauded investors, Elizabeth Holmes got 11 years while the company simply ceased to exist.

This creates a perverse incentive structure. Corporate executives can push companies toward fraud knowing that if it works, they profit – and if it fails, the company absorbs most of the punishment while a few individuals take the fall.

But heres the part most people miss: the individuals who get prosecuted arent always the ones most responsible. Sometimes there the ones who couldnt afford good lawyers. Sometimes there the ones who talked to investigators. Sometimes there the ones who got thrown under the bus by collegues who cooperated first.

If your involved in anything that could be called corporate fraud, understand this: the company might pay a fine, but your the one who could go to prison.

24% Of American Households Are Victims. 88% Never Report It.

White collar crime isnt rare. Its everywere.

An estimated 24% of American households have been victims of white collar crime. Thats one in four families. Investment scams. Identity theft. Consumer fraud. Insurance fraud. Mortgage schemes.

Yet 88% of victims never file a formal complaint. Up to 90% of white collar crimes go completley unreported.

Why dont victims report?

Some dont realize there victims until its too late. The retiree who lost there savings in a Ponzi scheme might not understand what happened for years. The homeowner who got defrauded by a contractor might blame themselves for not being more carefull.

Some dont think reporting will help. There right to be skeptical – with only 4,332 federal prosecutions per year, the odds of any individual report leading to charges are slim.

Some are embarassed. Fraud victims often feel stupid for falling for the scheme, even though the fraudsters were sophisticated criminals who manipulated there trust deliberately.

And some are afraid. If the fraud involved there employer, there worried about retaliation. If it involved there financial advisor, there worried about losing access to there remaining money.

The result is a crime category that affects more Americans then any other – yet generates the least reporting. Prosecutors only see a fraction of what actualy happens.

What A White Collar Investigation Actualy Looks Like

Heres what most people dont understand about federal white collar investigations: by the time you know about it, the investigation has been running for months. Sometimes years.

Federal agents dont knock on your door as there first step. They build cases quietly. They subpoena bank records. They interview former employees. They pull tax filings. They analyze email patterns. They follow money through shell companies. And they do all of this without telling you.

The first sign is usualy indirect. Your accountant mentions that someone asked about your returns. A former buisness partner tells you the FBI stopped by. Your bank freezes your account pending “routine review.” These breadcrumbs are your warning.

By the time you get a formal target letter – the official notification that your the focus of a grand jury investigation – prosecutors have already decided your probably guilty. There not exploring whether a crime occured. There building the case to prove it.

This is why early intervention matters. If you suspect an investigation, you have a narrow window to position yourself. Maybe theres an explanation prosecutors havent considered. Maybe you can demonstrate that your conduct was legal, even if it looks bad. Maybe cooperation is the right strategy before charges get filed.

But once there commited to prosecution, the train is much harder to stop. Federal prosecutors have a 95%+ conviction rate. They dont charge cases they cant win.

The typical timeline looks like this: investigation phase (6 months to 3 years of quiet building), grand jury phase (subpoenas, witness testimony, document production), indictment (formal charges filed), arraignment and pretrial (motions, discovery, plea negotiations), and either trial or plea. The whole process can take 2 to 5 years from first investigation to sentancing.

And during that entire time, your life is on hold. You cant travel internationaly. You cant change jobs without complications. You cant make major financial decisions without wondering if the government will seize everything anyway.

The Cooperation Decision That Changes Everything

Nishad Singh got time served. Caroline Ellison got 2 years. Sam Bankman-Fried got 25 years. All three were central figures in the FTX collapse. All three faced the same prosecutors.

The difference? Singh and Ellison cooperated. SBF went to trial.

Cooperation is the most important decision you’ll make in a white collar case. And its not as simple as “tell them everything and they’ll go easy on you.”

Heres what cooperation actualy means in federal court: you sit down with prosecutors. You tell them everything you know. You admit your own guilt. You testify against others. You become a witness for the government. And in exchange, prosecutors write a letter to the judge explaining how helpfull you were.

The judge dosent have to give you credit. But they usualy do.

Ellison’s “remarkable” cooperation got her 2 years instead of the 20+ she could have faced. Singhs cooperation was so exceptional that he got time served – meaning he walked out of court a free man.

But cooperation has costs. You have to admit guilt. You have to testify against people you may have worked with for years. You become a “cooperator” – which in some circles is another word for snitch. And if prosecutors decide your not being completely truthfull, the deal can fall apart.

The timing matters too. Early cooperation is worth more then late cooperation. If your the first person to walk in and offer testimony, your valuable. If your the fifth person to tell the same story, your redundant.

At Spodek Law Group, we help clients navigate this decision. When is cooperation the right call? What do you have to offer? Whats the realistic benefit given your specific situation? And if cooperation isnt right – what are the alternatives?

When Spodek Law Group Takes Your Call

You call 212-300-5196. Someone answers. Not a receptionist. Someone who can actualy discuss your situation.

We understand that if your reading this, your probly terrified. Maybe you havent slept in weeks. Maybe you just learned that your name came up in a federal investigation. Maybe you got a target letter. Maybe your employer’s lawyers told you to get your own attorney – and that phrase alone made your stomach drop.

Heres what working with Spodek Law Group on a white collar case actualy looks like:

First, we understand what your actualy facing. White collar crime is a meaningless category. What matters is the specific statute, the loss amount, and the evidence. We need to know exactly what conduct is at issue before we can assess your exposure.

Second, we identify where you stand in the investigation. Are you a target? A subject? A witness? Have others already cooperated against you? What physical evidence exists? How strong is the government’s case likely to be?

Third, we explore your options. Should you be proactive? Should you wait? Is cooperation the right strategy? Is there a legitimate defense based on your actual circumstances? What are the realistic outcomes given current sentancing patterns?

Fourth, we give you a clear picture of what your facing. Best case. Worst case. What factors influence where you fall on that spectrum. What you can do – right now – to improve your position.

This isnt about making promises we cant keep. Its about replacing panic with information. When you understand what your actualy facing, you can make rational decisions instead of freezing into inaction or making it worse.

Todd Spodek built Spodek Law Group on one principle: clients deserve the truth, even when its uncomfortable. Were not going to tell you everything will be fine if it wont. Were going to tell you exactly what we see and help you navigate it.

If your facing a white collar investigation – or just growing anxiety about something from your past that might be catching up to you – call us at 212-300-5196. The consultation is free. The cost of waiting isnt.

Sam Bankman-Fried thought he was the smartest person in the room. He got 25 years. Martha Stewart thought she was too famous to prosecute. She still went to prison. Bernie Madoff thought his scheme would never collapse. He died in a federal medical center.

The government has years to prosecute you. Your window to protect yourself is much shorter then you think.