White Collar Crimes

| by gs262000@gmail.com

Last Updated on: 1st October 2023, 08:22 am

 

White Collar Crime – What is it, Really?

White collar crime. We’ve all heard the term before – but what does it actually mean? And why does it matter? In this article, I’ll break down exactly what white collar crime is, some examples, and why we should care. Let’s dive in!

Defining White Collar Crime

The most basic definition of white collar crime is that it refers to non-violent crimes committed by businesses or individuals, typically for financial gain. This is as opposed to “street crime” like robbery or assault. White collar crimes are often financial in nature – things like fraud, embezzlement, money laundering, identity theft, and more.

The term “white collar” comes from the fact that these crimes tend to be committed by higher status business people and professionals – you know, the ones who used to always wear white collared shirts. But nowadays anyone from CEOs to regular employees can commit these kinds of crimes.

Some examples of common white collar crimes include:

• Fraud (mortgage fraud, securities fraud, insurance fraud, etc.)
• Embezzlement
• Bribery and kickbacks
• Identity theft
• Money laundering
• Tax evasion
• Insider trading
• Cybercrime (hacking, stealing data, etc.)

As you can see, it covers a pretty wide range of shady financial dealings. The methods can get quite complex, but the goal usually comes down to greed – illegally gaining money or other benefits.

Who Commits White Collar Crimes?

When you hear “white collar crime,” you probably picture a greedy CEO cooking the books or scamming people. And while that certainly happens, the reality is much broader. White collar criminals can be:

• CEOs, CFOs, and other executives
• Financial advisors and stockbrokers
• Bank employees
• Lawyers and accountants
• Doctors and healthcare professionals
• Government employees
• Business owners
• Regular company employees

So it really runs the gamut – anyone from the mail room clerk to the CEO could potentially commit white collar crimes given the opportunity. That’s why it can be so hard to prevent. You can’t easily profile who might do it.

Major White Collar Crime Cases

Some of the biggest white collar crime cases include:

• Enron – The energy company cooked their books and misled investors, eventually going bankrupt in 2001. Thousands lost their jobs and savings. See this overview.
• Bernie Madoff – Ran a massive Ponzi scheme fraud that collapsed in 2008, with losses over $60 billion. He’s currently serving a 150 year prison sentence. Learn more here.
• Worldcom – The telecom company fraudulently hid expenses to inflate earnings. Went bankrupt in 2002. The CEO got 25 years in prison. Read a summary.
• Wells Fargo – Employees illegally opened fake accounts to meet sales goals. Fined $3 billion in 2020. Get the full story.

As you can see, white collar crime often happens at the corporate level and can cause tremendous damage. But it also occurs on smaller scales that you never hear about in the news.

Why Does White Collar Crime Matter?

You might be wondering – if white collar crime is non-violent, then why does it matter? Why should we care? There’s a few big reasons:

• Financial damage – These crimes cause huge financial losses, often to vulnerable people like the elderly or small investors.
• Erodes trust – When people hear about large corporations committing fraud, it erodes public trust in business and government institutions.
• Wastes money – Billions are spent each year investigating and prosecuting white collar crimes. This diverts limited resources away from other needs.
• Unfair advantage – Those who commit these crimes gain an unfair advantage over law-abiding competitors.
• Hurts the economy – Massive frauds like Enron do real damage to the broader economy when they collapse.

So while violent crime understandably gets more public attention, we shouldn’t underestimate the impact of white collar offenses. They affect countless victims and undermine the integrity of our financial systems.

Challenges in Prosecuting White Collar Crime

With white collar crime causing such harm, why don’t we prosecute it more aggressively? There’s a few key challenges:

• Complexity – These crimes can involve very sophisticated schemes that are difficult to unravel.
• Lack of resources – Law enforcement is often underfunded and overworked in this area.
• Wealthy defendants – Those accused often hire expensive lawyers and can mount an aggressive defense.
• Light punishment – Even when convicted, white collar criminals often get light sentences compared to other crimes.
• Difficulty detecting – Many schemes go unnoticed for years before they are uncovered.

Prosecutors have to weigh limited budgets and uncertain outcomes when deciding which cases to pursue. But lax enforcement just enables more offenses, so it’s a difficult balance.

The Bottom Line

White collar crime might not get as much attention as other offenses, but it impacts countless victims and weakens trust in our institutions. Sophisticated financial schemes cause billions in losses each year. While prosecuting these crimes can be challenging, greater focus and resources are needed to deter such harmful offenses. At the end of the day, a crime doesn’t have to be violent to cause real damage.