America's White Collar Crime Epidemic
White-collar crime, also known as corporate crime, refers to a financially motivated, non-violent crime that is committed by government and business professionals. Within the ambit of criminology, white-collar crimes were first defined by sociologist Edwin Sutherland way back in the year 1939 as "any crime committed by a person of power, respectability and who occupies a high social status in the field of his occupation."
The name ‘White-collar’ originates from those types of individuals/people who mostly commit financial crimes/fraud, including fund managers, business managers, and executives. These individuals can be sent to prison for a small to a large period and be levied with steep fines if they are found guilty of committing white-collar crimes. The federal government also has the power to claim financial damages from large corporations and well-known banks/financial institutions that indulge in white-collar crimes on a large scale that affects the public society.
Typical white-collar crimes in the U.S. include money laundering, fraud, embezzlement, bribery, identity theft, cybercrime, Ponzi schemes, labor racketeering, insider trading, copyright infringement, and forgery. There are specialized lawyers who deal with white-collar crimes.
Corporate White Collar Crime Examples in the United States
Corporate white-collar crimes most of the time consist of very large-scale financial frauds committed throughout the bank/financial institution. For instance, in 2014 Credit Suisse pleaded guilty to helping some U.S. citizens avoid paying their taxes by concealing their income from the IRS or the Internal Revenue Service. Eventually, the bank agreed to pay penalties amounting to a whopping $2.6 billion.
Also in the same year of 2014, the Bank of America confessed that it had sold billions of dollars in mortgage-backed securities (MBS) that were tied to properties with highly inflated values. These loans did not have any proper collateral against them and were among the various types of financial frauds that led to the infamous financial crash of 2008 that affected stock market trading all across the world. Eventually, Bank of America succumbed to paying a heavy 16.65 billion dollars in damages and of course admitted to its colossal wrongdoing.
Most of the U.S. states have specialized agencies that investigate purely into white-collar crimes that are limited to every single state. Also, there are several federal agencies that investigate into various financial frauds that span across multiple states. For example, in an attempt to protect its society-abiding citizens, Utah established the first and only online registry for all white-collar criminals in the nation in the year 2016. Photos of people who have been convicted for a fraud-related felony that is rated as a second-degree fraud or higher than that will appear on the registry.
An Example of a White-Collar Crime Committed by an Individual in the United States
One of the most well-known and famous white-collar crimes committed by an individual in the United States was one by a Bernard Madoff. He was convicted in 2009 for a massive financial fraud that cost investors almost 65 billion dollars. Madoff ran an elaborate Ponzi scheme, which promised unusually large returns on investments. For many years, Madoff used the money from new investors to pay the previous investors without actually investing the new funds. Finally, Madoff’s scheme fell apart when a large number of investors asked for their money back, and Madoff was of course not in a position to pay them back for obvious reasons. He was sentenced to 150 years in prison.
Punishment for White Collar Crimes in the United States
In the United States, sentences for white-collar crimes may include a combination of fines, imprisonment search, restitution, disgorgement, community service, disgorgement, probation, or other alternative punishment. The longest white-collar sentence in the United States was 969 years given to Francine Raph of Cedar Creek Insurance for racketeering, wire fraud, and money laundering in the year 2010.