When people hear the term ‘white-collar crime,' they often think about widespread news stories involving investment scandals. Many Americans are familiar with the story of Bernard or Bernie Madoff. Madoff is currently serving a 150-year prison term after a federal court convicted him of running an illegal multi-billion dollar Ponzi scheme. He pled guilty to seven of the most common white-collar crimes — money laundering, false SEC filings, securities fraud, and perjury.
White-collar crimes typically involve some sort of financial fraud. If you are facing a federal white-collar crime charge, it is essential to hire a skilled federal defense attorney. The Chicago criminal defense law firm of Howard J. Wise & Associates is here to help. Contact our law firm today to schedule your free case evaluation.
Bernie Madoff ran one of the largest known Ponzi Schemes in American history. Ponzi schemes are named after Charles Ponzi, who allegedly made $250,000 a day in 1920. Ponzi ran a mail coupon fraud business in which he promised high returns on customers' investments, promising them no risk or little risk. The monetary investments of the new clients pay the older clients to keep them thinking that their investment is working. Ponzi schemes fall apart when the organizer stops obtaining new customers, and the cash flow comes to a halt.
Bankruptcy fraud is a lesser-known white-collar crime. Filing for bankruptcy allows an individual to receive relief for his or her debts under certain circumstances. When an individual files for bankruptcy, his or her creditors are no longer able to accept payment for the debt owed. Creditors only receive a part of the debtor's nonessential assets. In many instances, this amount is a tiny proportion of the overall debt owed. Thus, most of the time, creditors take a large financial loss when a debtor declares bankruptcy.
Bankruptcy fraud occurs when a debtor who is declaring bankruptcy hides certain assets from the bankruptcy court. Individuals may choose not to include some of their assets when they complete their bankruptcy paperwork. Debtors hide property in an attempt to prevent the bankruptcy court from selling it and distributing the profits to his or her creditors. Bankruptcy fraud is a white-collar crime and a serious federal offense.
The FBI has the authority to pursue corporate fraud cases. According to the FBI, corporate fraud includes all of the following types of crimes:
- Falsification of financial information
- Schemes intended to hide corporate fraud
- Public corruption
- Money laundering
- Securities and commodities fraud
- Financial institution fraud
- Mortgage fraud
- Bank fraud
- Fraud against the government
- Election law violations
- Health care fraud
- Mass marketing fraud
The FBI works with the Securities and Exchange Commission, the IRS, and the Treasury Department to discover fraud cases. Corporate fraud causes investors to suffer significant financial losses. It can also damage investor confidence and have a negative result in the U.S. economy. In many instances, those accused of corporate fraud have engaged in obstruction of justice, self-dealing, and accounting schemes.
Extortion is a white-collar crime that happens when someone coerces another person or institution to give up money, property, or services. In the 1930s, mobs or gangsters such as Al Capone would extort store owners and other individuals. He would force them to pay him money to earn protection from his gang. Another example of extortion happens when a person blackmails a victim into keeping him or her from making potentially embarrassing information from becoming public.
A new area of extortion, crypto-based extortion, is on the rise. In crypto-extortion, people use bots to "ransom" other individuals. Hackers dig up potentially embarrassing photos or the information and tell the owner that they must pay them money, or they will release the images online. Experts expect the prevalence of crypto-extortion to increase as extortionists continue to make significant amounts of money.
Embezzlement can occur at all income levels and in many different industries. Embezzlement occurs when someone an employer trusts to handle their money misappropriates funds for his or her gain. For example, an employee might take money out of the cash box regularly and keep it. Embezzlement schemes range from the simple stealing of cash to elaborate, complex schemes to embezzle from employers. When politicians spend their campaign funds on their personal expenses, such as on a home or vacation, they are engaging in embezzlement.
Even mid-sized companies can suffer from embezzlement. A woman in Iowa allegedly ran a multi-year embezzlement scheme at a car dealership at which she was employed. The woman admitted to a police officer that she had been using the car dealership's checking account to funnel money to herself. She used the embezzled money to pay her credit card bills. She allegedly embezzled nearly $300,000 in funds during four years.
How Common are White-Collar Crime Prosecutions?
The number of criminal cases for white-collar crimes brought by federal prosecutors has dropped significantly. New data shows that the number of white-collar crime prosecutions is at an all-time low for the last 33 years. Data collected by Transactional Records Access Clearinghouse, a research center at Syracuse University shows that in the fiscal year of 2019, which ended on September 30, 3% of the 170,487 cases brought by federal prosecutors involved white-collar crimes. Columbia University Law School Professor notes that public outcry for corporate wrongdoing has dropped in recent years.
Charged with a White-Collar Crime? We can Help
While the number of prosecutions may have decreased, the consequences for a white-collar crime conviction have not. If you have been accused of white-collar crime, time is of the essence. It is essential that you hire a team of attorneys that can assertively represent you throughout the criminal process. Contact the Chicago criminal defense law firm of Howard J. Wise & Associates today to schedule your free case evaluation.