In general, white collar crime is a nonviolent act that someone commits for financial gain. The offender typically uses deceitful tactics to commit white collar crime in an attempt to either avoid losing money or other property, or to gain it.
For example, insider trading is a type of white collar crime where someone takes advantage of their access to confidential, non-public information to make a gain on a stock trade. In other words, the individual illegally uses their insider knowledge to defraud the trading system and make money. Other examples of white collar crime include embezzlement, corporate fraud and money laundering.
In recent years, corporate crime has been high on the Federal Bureau of Investigation's (FBI) radar. While many forms of white collar crime involve an individual targeting another individual, business or government agency, corporate fraud usually takes place at the highest levels of a company and can result in severe financial losses for investors and the economy. Here are a few common types of corporate fraud.
Falsified financial reports
While it is common practice in accounting to round financial information to the nearest dollar to simplify the presentation of reports, it is another matter to completely falsify financial records. Manipulated financial data has the potential to cause great harm and destroy investor and public trust. In addition, employees and other stakeholders can suffer when the scheme to prop up and inflate profits finally crumbles into bankruptcy and they suddenly lose their livelihoods.
When an individual starts working for a business, one of the many duties is to act in good faith on behalf of the organization. Unfortunately, some people see opportunities for self-enrichment at the expense of the company, investors or others. Insider trading is one of the most common forms of self-dealing. For instance, when a manager has private information about an upcoming event that will affect the company's stock price, they might use this information to their advantage. The manager might sell the inside information to another party or take other actions that violate trading laws.
Since corporate fraud can have detrimental affects on large amounts of people and the economy in general, the FBI and the Securities and Exchange Commission (SEC) as well as other regulatory and governmental entities work closely together to detect, investigate and deter corporate fraud. If an individual is charged and convicted of this type of white collar crime, the penalties can include prison time and thousands of dollars in fines.
If you are facing a white collar crime charge, such as corporate fraud, keep in mind that you still have rights and options. With a strong defense, you might be able to successfully fight back against the charges and clear your name of wrongdoing.