The term “white-collar crime” was coined by sociologist and criminologist Edwin Sutherland. This type of crime is usually committed by people in the business world who, as a result of their job position, can gain access to large amounts of other people’s money. White-collar crime refers to financially motivated, nonviolent crimes committed by business and government professionals. White-collar crimes don’t deal with weapons, violence, or drugs. Because of this, many people falsely assume these crimes do not need to be taken seriously.
White-collar crimes are characterized by deceit, concealment, or violation of trust and are not dependent on the application or threat of physical force or violence. These crimes typically involve complex schemes executed over an extended period to fraudulently obtain money, property, or services and are committed by top-level executives.
White-collar crimes can range from tax evasion, bribery, and corruption to counterfeiting, insider trading, embezzlement, and fraud involving stock manipulation. White-collar criminals often use sophisticated forms of fraud such as accounting schemes to disguise their activities. White-collar crime costs the United States over $300 billion per year. These crime has been on the rise in recent years, with more individuals and companies falling victim to these types of crimes.
The Impact of White-Collar Crime
White-collar crime can have a devastating effect on victims, organizations, and even entire economies. Companies that are victims often suffer significant financial losses, as well as damage to their reputation and goodwill. In many instances, a single occurrence can financially ruin companies and create devastation for their employees and families affected by it. The consequences of these crimes can also lead to job losses, disruption in services, and a sense of insecurity among employees. White-collar crime has serious economic consequences for countries around the world, leading to higher taxes and an overall decrease in consumer confidence and can even hurt global markets, leading to an overall decrease in investment and a disruption to economies.
Types of White-Collar Crime
This type of crime can take many forms, including:
- Money laundering – the process of concealing or disguising the source of illegally obtained funds.
- Identity theft – obtaining someone else’s personal information to gain access to their accounts or other assets.
- Embezzlement – taking money or property entrusted to you for your benefit.
- Bribery – offering gifts, favors, or payments to influence someone’s opinion, judgment, or conduct.
- Insider trading – using knowledge of a company’s financial data not available to the public to gain profit from stock trading.
- Tax evasion – intentionally omitting or falsifying information to reduce the amount of taxes owed.
- Counterfeiting – creating fake money or goods to pass them off as legitimate items.
- Fraudulent schemes – using deception to obtain money, property, or services from unsuspecting victims.
- Computer Fraud – using a computer to commit a crime.
- Extortion – also known as blackmail.
- Perjury – lying while under oath in a judicial proceeding.
The main purpose of these crimes is to obtain money and property, avoid losing existing property or gain a personal or commercial advantage. The increase in white-collar crimes, as every type of civil lawsuit, has become less common, resulted in more federal and state officials working to fight white-collar crimes.
These crimes may be committed knowingly or unintentionally. Many first-time offenders are otherwise law-abiding citizens who have engaged in illegal activity out of ignorance of the law or out of desperation due to economic difficulty. Such economic difficulty may arise as a result of factors such as gambling, drug addiction, or family financial difficulties.
White Collar Fraud crimes are often very serious felonies and these crimes can be charged as federal or state crimes. White Collar Crimes are investigated by several different local, state, and federal authorities. The following agencies have oversight of investigations and prosecutions of white-collar crimes.
- Federal Bureau of Investigation
- Securities and Exchange Commission
- Internal Revenue Service
- Department of Justice
- Department of Homeland Security
- Attorney General’s Office Enforcement and Financial Crimes Bureau
- United States Secret Service
- United States Postal Inspectors
- Many more agencies
White-collar crime can be prevented through the enforcement of laws, compliance measures, and effective oversight from management. Knowing what signs to look for, and how to confront these issues, is the best defense. Companies should create clear policies around fraud prevention and document their procedures for detecting and reporting it. Companies should also ensure that their financial records are accurate and up to date so they can detect any suspicious activity.
Organizations should also conduct background checks on all potential employees, as well as review the qualifications of current staff members. Finally, companies should have clear channels of communication between management and employees so that any suspicious activity or unethical behavior can be reported quickly. Companies need to take steps to prevent this type of criminal activity. By following the preventive measures outlined above, businesses can protect themselves from white-collar crime.
Companies should take measures to prevent this type of criminal activity by implementing policies and procedures that detect fraudulent behavior and report it quickly. By taking steps to protect themselves, businesses can safeguard their assets and reputation. Taking proactive steps to prevent it can help ensure that organizations are protected from this type of criminal activity. Apart from due diligence, these crimes can be prevented thanks to continuous risk management, company ethics, and discipline. Putting a stop to white-collar crime requires as many layers and moving parts as the crime itself.