During a speech to the American Sociological Society in 1939, Professor Edwin Sutherland first used the term “white collar crime,” defining it as “a crime committed by a person of respectability and high social status in the course of his occupation.” Since that time, the study of white collar crime by American criminologists has evolved, with criminologists now categorizing these nonviolent crimes either by type of offense (e.g., environmental corporate crimes); by type of offender (e.g., those in positions of responsibility and trust such as a corporate C.E.O.); or by organizational culture (e.g., organized crime).
Today, the Federal Bureau of Investigation defines white collar crime as “… illegal acts which are characterized by deceit, concealment, or violation of trust and which are not dependent upon the application or threat of physical force or violence.”
White Collar Crime is Serious but Non-Violent
For the layman, white collar crime simply means crimes committed by con artists, or scams. Money gets taken; no one gets hurt – physically. Indeed, the public seems somewhat fascinated by the white collar criminal: The Sting, Wall Street, Paper Moon, The Insider, Chinatown, Catch Me If You Can, Syriana, and parts of The Godfather saga all involve aspects of white collar crime.
In white collar crime, it is understood that the goal of the criminal is to achieve financial gain for himself. Without resorting to violence, by his wits alone, the criminal gets cash through a wide variety of criminal acts, such as: money laundering, tax evasion, embezzlement, healthcare fraud, identity theft, insider trading, counterfeiting, computer fraud, bribery, environmental law violations, public corruption, and telemarketing fraud.
White Collar Crimes are Complex Cases to Try
Today, both the prosecution and the defense of white collar criminals has become a specialized practice area for attorneys across the country. Many lawyers devote themselves exclusively to white collar crime cases.
White collar crimes are notoriously difficult to prosecute since they usually involve intelligent, educated perpetrators who have hidden their scams behind sophisticated shields, which may involve numerous companies, subsidiaries, and complex transactions. The white collar criminal can be notoriously patient and organized, and the investigation of his activities can be burdensome, complex, and time-consuming. In fact, by the time that prosecutions begin, it is commonplace for white collar defendants to include not only the individuals involved in the transactions, but several established corporations as well.
At the federal level, several agencies work together in an attempt to curtail white collar crimes across the country. The Federal Bureau of Investigation; the Internal Revenue Service; US Customs and Border Patrol; the Securities & Exchange Commission, and the Environmental Protection Agency are but a few of the federal organizations dedicated to the investigation and prosecution of white collar crime.
Once the agency investigations reach a certain level of completion, the U.S. Department of Justice becomes involved, often with an investigatory grand jury being impaneled. Here, a group of 16 to 23 citizens, acting as a unit, investigate and ultimately issue indictments against possible white collar perpetrators. Working with an assistant U.S. Attorney, the grand jury reviews documents and hears testimony from witnesses; subjects; and targets. “Targets” are those individuals believed to be involved in the criminal act; “subjects” have undertaken suspicious behavior, but are not yet considered criminally culpable; and “witnesses” are those individuals with information of interest to the grand jury. At the end of the white collar crime investigation, the grand jury will issue indictments and the Department of Justice will proceed to trial in federal district court against those individuals and corporations indicted by the grand jury.
Defenses to Charges of White Collar Crime
All standard criminal defenses are available to white collar crime defendants; however, the most common defense to urge by these defendants is the defense of entrapment. Entrapment occurs when law enforcement agents induce or persuade an individual to undertake a crime that he had no previous desire or intent to commit. Once the defense of entrapment is asserted, the burden of proving that the defendant was not the victim of entrapment must be shown by the government beyond a reasonable doubt.
Punishment for White Collar Crime
Punishment for white collar crime ranges from monetary fines, restitution of property taken, and reimbursement of the costs of prosecution, to various forms of incarceration. White collar criminals, due to their generally high socioeconomic status and lack of any threat of violence, may be detained to home detention, community confinement, or supervised release, as well as imprisonment in a less secure facility than those of the general federal prison population.
These minimum-security facilities have collectively come to be known as “Club Fed.” In fact, Forbesmagazine recognized Eglin Federal Prison Camp in Fort Walton, Florida, as the “Best Place to Be Incarcerated” in 2001, with Eglin offering tennis, yoga, sunbathing on the beach, boccie ball, and no ugly fences.
White collar crime is on the increase. In 2007, 64 major corporate fraud cases were successfully investigated by the FBI and are currently being prosecuted. This in comparison to 2002, when the FBI was involved in only 18 corporate fraud cases. The FBI also dismantled 277 white collar criminal enterprises in 2007, doubling its predicted estimate of 125.
The American public is also becoming more aware of white collar crime’s potentially serious and widespread ramifications upon the public interest and individual pocketbook. Recent media exposure of white collar crimes include the fraud cases of Enron, WorldCom, and Arthur Andersen; the environmental disaster and cover up of the Exxon Valdez; the accounting fraud of Jim Bakker and the PTL organization; and the insider trading scandals involving Ivan Boesky and Martha Stewart.