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  • What Are Some Examples of White-Collar Crimes?

    Posted on by JACK MKHITARIAN

    White-collar crime is actually a category of crimes, including everything from insider trading (remember Martha Stewart?), to identity theft, to stealing someone’s intellectual property. The most important distinction is while there are victims, there are no violent acts against those victims. That said, a victim of a white-collar crime can certainly suffer for years after the crime is committed – so these are not taken lightly by state or federal courts.

    There are a lot of crimes that fit into this overly broad category, but knowing the more common crimes makes it easier to understand. The term itself comes from the person likely to commit these crimes: a professional who is trusted by a member of the public and betrayed by that person. While Fortune 500 companies and their CEOs make headlines for their white-collar crimes, these crimes can be done by anyone in a position of trust and power (and they do not have to be at the top to do so).

    Some Examples of the Most Commonly Committed White Collar Crimes

    White-collar crimes affect the victim, society, and often the economy. Some of these crimes can be so detrimental that they can impact the stock market – costing investors hundreds to thousands.

    Not all businesses involved in these crimes shut down or go to prison either. Take the Bank of America issue in 2008 where they sold billions in troubled mortgages and contributed to the 2008 housing market crash that impacted the economy and more than just the homeowners and payees of those Bank of America loans.

    Some other examples of white-collar crimes include:

    1. Embezzlement

    Embezzlement is one of the more common white-collar crimes. It happens when a person in a position of trust (whether by a client or their employer) exploits that trust when handling money or assets. They use their position to manipulate records and steal funds for themselves. For example, an employee will list expenses that are actually paid to a shell company they created so that they could funnel funds away from their employer without notice.

    2. Ponzi Schemes and Pyramid Schemes

    Ponzi Schemes are also another common white-collar crime, and thanks to social media, they grow rapidly and can consume hundreds of victims before they are discovered.

    Ponzi Schemes are easy to spot because they are too good to be true. They will require a high-volume investment with the promise of high yield returns and little to no risk. Typically, a person or organization involved in this scam will try to get new investors into their “business,” then use those new investments to pay out old investors as their “gains.” When new investors stop coming in, the well dries up and people quickly realize that they were part of a Ponzi Scheme and not a genuine investment.

    Pyramid schemes are similar, only in this case, the person that recruits gets a cut of the investment from that party, and they continue to reel in new investors to flood cash toward the top of the pyramid. Ultimately, the person or group at the top receives the highest amount of funds, and when the well dries up at the bottom, everyone ends up losing.

    3. Insider Trading

    Insider trading occurs when one uses their knowledge of publicly held stocks to benefit themselves or others.

    For example, a CEO of a company knows that his company is about to release a negative quarterly report. To avoid taking a hit in the stock market, he sells his shares. He also tells family and friends to sell their shares while the gains are high. Then, when the negative report hits, those still holding shares end up losing, while the CEO and his network profit off their sales.

    In this case, the CEO used his insider knowledge to profit and manipulate the stock market to his advantage.

    4. Bankruptcy Fraud

    The United States allows everyone a chance at a fresh start – even if they are overwhelmed with debt. However, there comes a time where a person is no longer looking for financial relief; instead, they are looking to take advantage of the situation and commit fraud.

    With bankruptcy fraud, a person will intentionally hide assets, assets that would normally be sold and paid toward outstanding debts, so that they can continue to enjoy those assets after they file for bankruptcy.

    5. Credit Card Fraud

    These days, it is hard to find a consumer that does not use a credit card in-person or online. Credit card fraud occurs when someone steals credit card information and uses it to make purchases for themselves. They can even take out cash advances on the card. Credit card fraud is incredibly common, and sometimes the perpetrator is someone that works for a company where you have used your credit card.

    For example, you shop online with a local retailer and purchase something from their store. Your credit card information is published in that store’s sales records, and an employee takes that information to then purchases numerous items for themselves online.

    Arrested for a White-Collar Crime? You Are in More Trouble Than You Think

    White-collar crimes seem harmless because they have no violence against the victims, but in reality, these crimes are dangerous for those accused of committing them. Not only could you face state charges, but there is a likelihood that you could have federal charges pending against you too. You could spend years of your life in prison for these crimes too – they are not something you just serve probation for or pay a fine and move on. Depending on the circumstances, you could also be named in a lawsuit and forced to pay for the financial despair you caused.

    If you have been arrested for a white-collar crime, contact the defense team at New Mexico Criminal Law Offices today. We are here to help you get the best possible outcome – no matter the charges you face. Call us now to schedule a free case evaluation.