Ask a Financial Crime Lawyer: 6 Common White Collar Crimes

White-collar crimes are usually committed by people who want to gain money or power, and they can be perpetrated by anyone, from CEOs to administrative assistants. Even people who were unknowingly involved in such crimes can face charges. The aftereffects of such crimes can cause widespread financial ruin for the people, families, or businesses involved. Read on as a financial crime lawyer discusses the six most common white-collar crimes perpetrated today.

Ask a Financial Crime Lawyer: 6 Common White Collar Crimes

1. Ponzi Schemes

Perhaps the most famous perpetrator of a Ponzi scheme is Bernie Madoff, but the term originates from conman Charles Ponzi, who allegedly made $250,000 a day in the 1920s via mail coupon fraud. Essentially, this type of white-collar crime is an investment scheme that promises investors very high returns for little risk.

After taking the initial investments, the perpetrators find new investors to pay back the “high returns” promised to the first investors. You may have heard a Ponzi scheme described by the phrases “pyramid scheme” or “robbing Peter to pay back Paul.” Typically, these schemes fall apart when the money runs out or when there are no more investors.

2. Embezzlement

When most people think of white-collar crimes, they’re probably thinking of embezzlement, theft, or larceny. In this type of financial crime, the perpetrator abuses their position within a business to misappropriate funds. Examples include employees funneling company funds into their own bank accounts or politicians who spend campaign funds on personal expenses.

In some cases, people embezzle money due to need: they have a gambling addiction, substance abuse issues, or significant debts. However, in some embezzlement cases, people steal money to fund extravagant lifestyles. Regardless of the motivation, embezzlement is a prevalent white-collar crime. One of the most famous embezzlement cases was the Enron collapse, which was caused largely by a lack of governmental oversight and resulted in over $11 billion being embezzled by the perpetrators.

3. Securities Fraud 

Almost every white-collar crime involves a form of fraud. Essentially, someone who deceives another for financial gain commits fraud. One of the best examples is securities fraud, usually related to insider trading (everyone remembers the Martha Stewart case). In the US, there have been several additions and revisions to insider trading legislation as methods of illegal securities fraud evolve over time and with the advancement of technology.

4. Bankruptcy Fraud

Another common white-collar crime is bankruptcy fraud. Bankruptcy is a legitimate relief program for companies with large, overwhelming debt. However, fraud occurs when companies claim bankruptcy but deliberately hide assets from creditors. Even without any fraud, bankruptcy usually results in creditors only receiving a fraction of the actual money they lent.

5. Identity Fraud

Identity theft is when someone steals your personal information, like your social security number or bank account numbers; identity fraud is when the perpetrator uses your stolen data for personal financial gain. Identity thieves come up with some astonishingly creative ways to steal people’s personal data, such as:

  • Holding your computer files for ransom (ransomware virus)
  • Stealing frequent flyer miles
  • Stealing health insurance
  • Opening credit card accounts in your name
  • Stealing the identities of children
  • Committing crimes in your name
  • Taking over social media accounts
  • Hacking your company’s work chat system
  • Stealing your tax refund

6. Tax Evasion

Just ask Al Capone: tax evasion is a crime that can send you to prison. If you purposefully commit tax evasion like hiding assets, fudging the numbers on your returns, or failing to report income, you could be charged with tax evasion. The IRS takes tax evasion seriously. Potential consequences for a felony tax evasion conviction include fines up to $100,000 for individuals or $500,000 for businesses, paying for the cost of prosecution, and up to five years in prison.

What Should You Do if You’re Charged with a White Collar Crime?

As we mentioned earlier, innocent people can unknowingly perpetrate white-collar crimes and still be charged for them, even if they didn’t directly benefit from the offense. An example would be someone who works in the billing department of a doctor’s office and unknowingly follows illegal practices (like unbundling charges or charging for medical appointments that never happened) at the behest of their supervisor. They can still be charged, even if they didn’t realize they were doing anything illegal.

After you’ve been charged, it’s crucial to hire a financial crime lawyer. If you’re in Texas, your first call should be to a Houston white-collar crimes lawyer with the skills and experience to handle your case. Finding the right lawyer is key to your defense, so make sure that you choose one with the legal expertise, courtroom experience, and negotiation skills to improve your chances of a favorable outcome in your case.

White-collar crimes may not have any element of violence, but that doesn’t mean they’re victimless. Regardless of the perpetrator’s motivation, the consequences of these crimes are usually widespread. From embezzlement and fraud to identity theft and insider trading, white-collar crimes occur every day. If you’ve been charged with a financial crime, contact an experienced attorney to help you build your defense and advocate for your rights, both in and out of the courtroom.

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