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  • White-Collar vs. Corporate Crime

    Posted on by JACK MKHITARIAN

    A man arrested for a white collar crime.When most people think of crimes, they picture drug dealing, violent crimes, sex offenses, or gun crimes. To be sure, this “street crime” constitutes most of the criminal charges brought in state and federal courts. However, the number of white-collar and corporate criminal prosecutions is steadily increasing. Moreover, with the change in administration in the White House, the federal government will likely step up its efforts in curbing white-collar and corporate crime.

    Both white-collar crime and corporate crime involve non-violent, financial crimes involving fraudulent or deceptive means. The two terms overlap in large part, and many people use the terms interchangeably. However, there are significant differences when it comes to white-collar crime and corporate crime.

    What Is White Collar Crime?

    According to the Federal Bureau of Investigation, the term “white-collar crime” was first used back in 1939. Since then, it has become the common term to refer to a wide range of financial crimes. White-collar crimes are criminal offenses involving deception, lies, and fraud to achieve personal gain. Most white-collar crimes rely on some type of fraud. Those who engage in white-collar crime may be trying to make money for themselves or to avoid losing or paying money. However, white-collar crimes can also focus on other matters, such as real estate, services, or even obtaining a business advantage.

    Mortgage Fraud

    Mortgage fraud is a type of financial institution fraud involving a false statement made to a lender for the purposes of inducing the lender to make a loan. After the housing collapse in 2008, the Federal Bureau of Investigation and other federal law enforcement agencies significantly increased prosecution of mortgage fraud. When employees of the lending organization commit mortgage fraud, charges may be brought against the corporation.

    Identity Theft

    Identity theft occurs when someone uses another’s personal information—often bank accounts, credit cards, and social security numbers— to commit fraud.  Cases of identity theft dramatically increased in recent decades, leading to the creation of several specialized law enforcement and prosecutorial groups.

    Money Laundering

    An example of white collar crime.Money laundering is the process of making money obtained through illicit sources appear as though it was earned through legitimate means. Essentially, money laundering involves turning “dirty” money into “clean” money, usually to avoid prosecution related to the origin of the money or to avoid paying taxes. According to the Federal Bureau of Investigation, the primary reasons why people launder money is to conceal the following crimes:

    • Complex financial crimes,
    • Health care fraud,
    • Human trafficking,
    • Public corruption,
    • Drug trafficking, and
    • Terrorism.

    However, any time someone covers up the source of money, regardless of where it came from, they arguably committed money laundering.

    Securities and Commodities Fraud

    Securities and commodities fraud covers a very broad range of offenses, all of which involve either market manipulation or taking advantage of investors. A few examples of securities and commodities fraud include:

    • Investment scams,
    • Pyramid schemes,
    • Pump-and-dump schemes,
    • Broker embezzlement, and
    • Promissory note fraud.

    Securities and commodities fraud are among the most complex and challenging areas of white-collar crime.

    When individuals commit any of the above crimes on their own behalf, the crime is considered a white-collar crime. However, employees of a business or other organization do these things in the organization’s name, the very same crimes may constitute corporate crime.

    What Is Corporate Crime?

    Under the law, corporations are their own legal entity, and just like individuals, they can face criminal charges.

    Corporate crime, or organizational crime, is very similar to white-collar crime. In fact, most consider corporate crime a type of white-collar crime. Regardless, corporate crime and white-collar crime overlap significantly.

    The primary difference between white-collar crime and corporate crime is that corporate crime is carried out by individuals within their legitimate position on behalf of the business they work for. In contrast, white-collar crimes involve someone acting on their own, for their own benefit (or the benefit of friends or family members). Thus, unlike those who engage in white-collar crime, many facing corporate crimes do not consider their actions criminal and may not even know what they did was against the law. In fact, it is common for the organization employing someone facing corporate crime to tacitly—if not explicitly—approve of the criminal conduct.

    Some of the most commonly charged corporate crimes include:

    • Bribery,
    • Market manipulation,
    • Falsifying financial statements,
    • Insider trading, and
    • Making false claims.

    Successfully defending against a corporate crime requires an attorney with knowledge of the statutes outlining these offenses, as well as business and the financial markets.

    Punishments for White-Collar and Corporate Crimes

    Another important difference between corporate and white-collar crime is that corporate crimes are brought against the corporation, and prosecutors bring white-collar crimes against individuals. However, in some situations, prosecutors will also charge individuals who engaged in corporate crime in their individual capacity. Thus, a single crime can be a corporate crime (as charged against the organization) and a white-collar crime (as charged against the individual who committed the criminal act).

    When it comes to punishments, white-collar crimes carry the typical punishments associated with a criminal offense. Thus, someone found guilty of white-collar crimes may face significant fines, revocation of professional licenses, and possibly a term in state or federal prison. On the other hand, a corporation found guilty of a corporate crime will be fined and may face other financial sanctions.

    Are You Facing New Mexico White-Collar Criminal Charges?

    If you are under investigation for a New Mexico white-collar crime, contact the dedicated criminal defense attorneys at New Mexico Criminal Law Offices. Our attorneys have advanced knowledge of business and the financial markets, enabling us to offer an unrivaled level of representation to our clients, regardless of the charges they face. We stay up to date on all new legal developments to best represent individuals and corporations accused of all types of financial crimes. To learn more about how we can help you fight against the charges you face, give one of our attorneys a call. You can also reach us through our online form.