White collar crime is a nonviolent crime committed for financial gain. According to the FBI, the key agency that investigates these crimes, “these crimes are characterized by deception, concealment or breach of trust.” The motive for these crimes is to obtain or avoid the loss of money, property or services, or to obtain a personal or business advantage.
Examples of white collar workers include securities fraud, theft, corporate fraud, and money laundering. In addition to the FBI, an organization that investigates white-collar crimes includes the Commission on the Securities and Exchange Commission (the SEC), the National Association of Securities Dealers (NASD), and public authorities.
The white-collar crime continued until the definition of Sutherland and its research was done in 1939. Sutherland wanted to find a general theory of the typical criminal and, by reading other researchers of the work, to get an idea that all criminals were stereotyped as impoverished or of low social status, he found it difficult to believe, considering people of high social status committed a crime as well.
In his book, Sutherland said: “White collar crime can be roughly defined as a crime committed by a person of respectful and high social status in the course of his occupation.” There is a register of white-collar crime that identifies those who have such a crime in the public domain in order to prevent potential victims from being victimized. Utah in 2016.
Relationship with other types of crime
Blue collar crime
The types of crimes committed depend on what is available to a potential criminal. Thus, those who work in a relatively unskilled environment have more opportunities for exploitation than those who work in situations where large financial transactions take place. Blue-collar crimes tend to be more and thus more police scrutiny, such as vandalism or shop.
In contrast, white-collar employees can integrate criminal behavior, making themselves less involved in crime. Thus, blue-collar crime will be more likely to use physical force, while in the corporate world victim identification is less, and accountability is driven by a culture of commercial confidentiality to protect shareholder value. Estimated,
Corporate crime is associated with the company as a whole. The crime benefits investors or individuals holding high positions in a company or corporation. White collar crime and corporate crime are similar because they occur in the business world. The difference is that white-collar crime benefits the individuals involved, while corporate crime benefits companies or corporations, usually high-profile individuals within the corporation.
One of the notable US trading cases is the ImClone stock trading case. In December 2001, top-tier executives sold their stakes in the pharmaceutical company ImClone Systems, which pioneered an anti-cancer drug. Commission for Exchange and Exchange Commission (SEC) has investigated numerous top-level performers and Maren Stewart, another former ImClone executive director, who also sold its shares at the same time. The SEC reached a settlement in 2005.
Negotiations on agreements between the state and the corporation will be at a relatively high level on both sides, this is almost a very “white collar” situation, which provides an opportunity for crime. While law enforcement claims to have prioritized white-collar crime, the available evidence suggests that it remains a low priority.
When high-ranking employees of a corporation engaged in criminal activities using the company, it is sometimes called fraud.
Organized transnational crime
Organized transnational crime is organized criminal activity that takes place in various national jurisdictions, and with the advancement of transport and information technology, law enforcement officials and policymakers must respond to this form of crime on a global scale.
Some examples include human trafficking, money lag, drug trafficking, arms trafficking, terrorism and cybercrime. Despite the impossibility of accurately identifying transnational crime, the international think tank Millennium Project in 2009 collected statistics on several aspects of transnational crime:
- Nearly $ 780 billion in global trade
- Counterfeiting and piracy from $ 300 billion to $ 1 trillion
- US $ 321 billion global drug trade
Individuals may commit crimes while employed or. The two most common forms are fraud. This can be of different degrees, from Penalty to furniture to a car. Trading stocks, trading stocks by someone with access to public information, is a type of scam.
National Interest Crimes
“Crims associated with the incitement of foreign aggression” is a crime in which communication with strangers secretly causes foreign aggression or threat. “Krim related to foreign aggression” – a triple co-operation with foreign aggression, a positive recourse related to internal aggression “Depending on the country added to them a criminal conspiracy is one example.
- White collar crime is a nonviolent offense that financially enriches criminals.
- These crimes include misrepresenting corporate financial data to defraud regulators and others.
- Many other offenses involve fraudulent investment opportunities, in which potential returns are exaggerated and risks are portrayed as minimal or nonexistent.
White collar crime has been associated with educated and wealthy people since the term was first coined in 1949 by sociologist Edwin Sutherland, who defined it as “a crime committed by a person of respectability and high social status in the course of his work.”
Over the decades since then, the spectrum of white collar workers has expanded significantly as new technologies and new financial products and mechanisms have spawned many new crimes. Notable people convicted of white-collar crimes in recent decades include Ivan Boesky, Bernard Ebbers, Michael Milken, and Bernie Madoff. And new rampant white-collar crimes fueled by the Internet include so-called Nigerian scams, in which fraudulent emails require help in sending significant amounts of money.
Some definitions of “white collar” deal only with crimes committed by an individual in his own interests. But the FBI, for example, defines these crimes as including large-scale fraud perpetrated by many in a corporate or government institution.
In fact, the agency cites corporate crime as one of its top enforcement priorities. This is because it not only brings “significant financial losses to investors,” but “can cause immeasurable damage to the US economy and investor confidence.”
Falsification of financial information
Most cases of corporate fraud involve accounting schemes designed to mislead investors, auditors, and analysts as to the true financial condition of a corporation or business. Such cases are usually associated with the manipulation of financial data, stock prices, or other valuation indicators to make the financial performance of the business appear better than it actually is.
For example, Credit Suisse pleaded guilty in 2014 to assisting US citizens with tax evasion by hiding income from the IRS . The bank agreed to pay fines of $ 2.6 billion. Also in 2014, Bank of America admitted that it had sold billions of mortgage-backed securities (MBS) tied to overvalued real estate properties. These unsecured loans were one of the types of financial misconduct that led to the 2008 financial crash. Bank of America agreed to pay $ 16.65 billion in damages and admit wrongdoing.
Corporate fraud also includes cases where one or more employees of a company act to get rich at the expense of investors or other parties. Self-employment is when the trustee acts in his own interests in the transaction, rather than in the interests of his clients. This constitutes a conflict of interest and a wrongful act and can lead to litigation, fines, and the dismissal of those who commit it.
Self-employment can take many forms but usually involves taking advantage of or attempting to profit from a transaction that is being performed on behalf of another party. For example, anticipatory action -this is when a broker or other market participant enters into a trade because they know in advance of a large non-public transaction that will affect the price of the asset, resulting in a likely financial benefit to the broker.
It also happens when a broker or analyst buys or sells stocks at their own expense before recommending their firm to buy or sell to clients.
The most famous cases of insider trading are when individuals act on or disclose information to others that is not yet publicly available and may affect the stock price and other valuations of a company as soon as it becomes known. Insider trading is illegal if it involves buying or selling securities on the basis of material, non -public information that gives that person an unfair profit margin.
It does not matter how the material non-public information was obtained or whether this person works for the company. For example, suppose someone has learned about intrinsic material information from a family member and has shared it with a friend. If a friend uses this inside information to make a profit in the stock market, then all three people involved can be held accountable.
Other trading offenses included hedge fund fraud, including end-of-business trading and other market timing schemes.
Detection and containment
With such a wide range of crimes and legal entities involved, corporate fraud attracts perhaps the broadest group or partners to investigate. The FBI says it generally coordinates with the US Securities and Exchange Commission (SEC), the Commodity Futures Trading Commission (CFTC), the Financial Industry Regulatory Authority, the Internal Revenue Service, the Department of Labor, the FEC, and the Postal Service. US inspection. and other regulatory and/or law enforcement agencies.
Money laundering is the process of obtaining money from illegal activities, such as drug trafficking, and presenting that money as proceeds from legitimate business activities. Money from illegal activities is considered “dirty” and this process launders the money to make it look “clean”.
In such cases, of course, the investigation often encompasses not only the money laundering itself but also the criminal activity that resulted in the money laundering. Money laundering criminals generate income in a variety of ways, including health fraud, human and drug trafficking, social corruption, and terrorism.
Criminals use a dizzying number and variety of money laundering methods. However, among the most common are real estate, precious metals, international trade, and virtual currencies such as bitcoin.
Money Laundering Steps
According to the FBI, the money laundering process has three stages: deployment, layering, and integration. The placement represents the initial flow of the criminal proceeds into the financial system. Layering is the most difficult step as it often entails the international movement of funds.
The distribution of proceeds separates the proceeds of criminals from their original source and creates a deliberately complex audit trail through a series of financial transactions. Integration occurs when the criminal proceeds are returned to the criminal from sources that appear to be legitimate.
Not all such schemes are necessarily complex. For example, one of the most common laundering schemes is a legitimate cash-related business owned by a criminal organization. If an organization owns a restaurant, it can inflate its daily cash flow to funnel illegal money through the restaurant to the bank. They can then distribute the funds to the owners from the restaurant’s bank account.
Detection and containment
The number of steps involved in money laundering, along with the often global volume of its many financial transactions, makes investigations extremely difficult. The FBI says it regularly coordinates anti-money laundering efforts with federal, state, and local law enforcement agencies, as well as a variety of international partners. Many companies, especially in finance and banking, have anti-money laundering (AML) regulations to detect and prevent money laundering.
Securities and commodity fraud
In addition to the above-mentioned corporate fraud, which mainly involves falsifying corporate information and using inside information to make a do-it-yourself transaction, many other crimes involve deceiving potential investors and consumers by distorting the information they use to make decisions.
Contractor fraud with securities can be an individual, such as a stockbroker, or an organization, such as a brokerage firm, corporation, or investment bank. Third parties can also commit this type of fraud through schemes such as insider trading. Some notable examples of securities fraud are the Enron, Tyco, Adelphia, and WorldCom scandals.
High-yield investment scams usually involve promises of high rates of return with little or no risk. The investments themselves can be in commodities, securities, real estate, and other categories.
Schemes Ponzi and pyramid usually use funds provided by new investors to pay the revenues that have been promised the previous investors participated in the agreement. Such schemes require fraudsters to continually recruit more and more victims in order to maintain the pretense for as long as possible. These schemes usually fail when the demands of existing investors exceed the flow of new funds from new hires.
Advance payment schemes can follow a more subtle strategy, where a fraudster convinces their targets to advance them small amounts of money that are promised to generate large returns.
Other financial crimes
Other investment scams reported by the FBI include a bill of exchange scams, in which, typically, short-term debt instruments are issued by little-known or defunct companies, promising high returns with little or no risk.
Merchandise fraud is the illegal sale or alleged sale of raw materials or semi-finished products that are relatively homogeneous in nature and traded on the exchange, including gold, pork bellies, and coffee. Oftentimes, in this type of fraud, attackers create fake account statements that reflect the alleged investment, when the investment was not actually made. Brokerage schemes of theft include illegal and unauthorized actions of brokers to steal directly from their clients, usually with many false documents.
Even more complex is market manipulations, so-called “ pump and dump ” schemes, which are based on artificially inflating the price of smaller stocks in small OTC markets. The pump involves attracting unsuspecting investors through false or deceptive sales methods, public information, or corporate documents.
The FBI says brokers who are bribed by the conspirators then use high-pressure selling tactics to increase the number of investors and, as a result, increase the share price. Once the target price is reached, the attackers dump their shares with huge profits and leave innocent investors to pay the bill.
Detection and containment
Securities fraud charges are being investigated by the Securities and Exchange Commission (SEC) and the National Association of Securities Dealers (NASD) , often in conjunction with the FBI.
Government agencies can also investigate investment fraud. In a unique effort to protect its citizens, for example, Utah created the country’s first online white-collar register in 2016. Photos of persons convicted of a fraud offense with a grade II or higher are listed in the registry. The state initiated registration because Ponzi schema criminals tend to target tight-knit cultural or religious groups, such as the Church of Jesus Christ of Latter-day Saints congregation, which is based in Salt Lake City, Utah.