July 1, 2022
Most Common Punishments & Types of White-Collar Crimes
What is a white-collar crime? Let's look at the main features of these crimes, and also answer - what to do if you are charged.
If the government has charged you with a white-collar crime in Philadelphia, PA, there is no question about it–you need a criminal defense lawyer. White-collar crime sentencing can be harsh, especially if the federal government is prosecuting you. Below is a list of white-collar crimes together with a short description of each of them.
What Are White-Collar Crimes?
What is a white-collar crime? While there is no one-sentence white-collar crime definition, it is possible to describe the typical features of these crimes. White-collar crimes are non-violent crimes that are typically motivated by the prospect of financial gain. These crimes almost always rely on deceit, and they frequently take advantage of technology, such as computer networks. “Phishing” to obtain access to someone’s computer passwords is an example of a white-collar crime.
White-Collar Crime vs Blue-Collar Crime
The main differences between white-collar crimes and “blue-collar” crimes are (i) the methods used, and (ii) the motivations. Blue-collar criminals typically don’t have the means to create international Ponzi schemes, for example, so they might just hit someone over the head and take their money. In almost all cases, blue-collar criminals use more violent and less sophisticated methods.
The second difference is motivation. Although the financial gain is a common motivation for both types of crimes, crimes of passion (murdering your spouse for suspected infidelity, for example) are not normally classified as white-collar crimes.
Classifying White-Collar Crimes
White-collar offenses can be divided into two types–individual crimes and corporate crimes.
Individual white-collar crimes are committed by individuals, or by groups of individuals, acting outside of a formal corporate framework. Counterfeiting, for example, might constitute a white-collar crime committed by a group of individuals (hence the use of the term “counterfeiting ring”).
Corporate white-collar crimes are committed at the formal corporate level. A brokerage firm, for example, might engage in insider trading. Antitrust violations are another example of corporate white-collar crime.
Most Common Types of White-Collar Crimes
There are many common types of crimes defined by white-collar crime law. Following are several white-collar crime examples. Remember that these categories are somewhat arbitrary, because every white-collar case is different.
The basic legal definition of fraud is the commission of a deceitful act for the purpose of financial gain. Many kinds of fraud exist, however, and some are far more serious than others. Corporate fraud can include activities such as:
- Submitted falsified billing record;
- Making false public statements to attract investors;
- Insider trading;
- Doctoring financial records to misrepresent the health of your business or conceal illegal activities.
The number of different types of fraud is almost unlimited.
Embezzlement occurs when someone entrusted with the care of other people’s money abuses that position to steal money from them. Common victims include corporate shareholders and political campaign donors. An accountant, for example, is in an ideal position to embezzle money from their employer or their clients.
A classic example of identity theft is using someone else’s credit card number to make purchases without that person’s authorization. Many other forms of identity theft are possible, however. Identity theft occurs, for example, when one person uses another person’s employee ID to gain access to a restricted area. The motivation does not have to be personal financial gain — it can be espionage, for example.
Extortion occurs when one person coerces another person into giving up something of value (money or property, for instance) that they are not entitled to. Someone might, for example, obtain embarrassing or incriminating information about a public figure and then demand ”hush money” to refrain from publicizing it.
Tax evasion occurs when someone deliberately misrepresents the amount of tax they owe or deliberately conceals assets to avoid paying taxes. Making a mathematical mistake or an honest error in interpreting the scope of a tax exemption does not constitute tax evasion. Money laundering and tax evasion are closely related.
Money laundering involves activities designed to disguise the true source of income. A drug dealer, for example, might open a shell company to disguise the source of their income. In addition to concealing the illegal source of funds, a person might use money laundering to avoid paying taxes or to pay a lower tax rate.
Bribery is offering a public official something of value (money, gifts, favors, etc.) in exchange for favorable treatment. This favorable treatment must be something to which the person providing the money or gifts is not entitled. You might bribe a police officer, for example, to overlook a crime you committed. You might bribe a public official to vote in a manner that benefits your business interests.
Computer crimes are not limited to identity theft. An example of a computer crime would be hacking onto a computer network to obtain classified information. A government might commit malware or denial of service attacks as a form of cyber warfare against another nation or a private company.
A Ponzi scheme is a pyramid scheme where early investors are paid using funds provided by later investors, instead of with-profits earned through legitimate business activity. Mathematically, the eventual collapse of such a scheme is inevitable, leaving later investors with a complete loss of their “investments.” Early investors, by contrast, reap windfall profits.
Forgery means falsifying someone’s signature or creating a counterfeit legal document. Documents that might be forged include:
- Personal checks;
- Stock and bond certificates;
- Food stamps;
- Real estate deeds.
Criminals forge many other types of documents as well. Strictly speaking, counterfeiting money is a form of forgery.
An agent of a foreign government, for example, might provide an employee of Microsoft with financial benefits in exchange for technology. Alternatively, a government might provide benefits (or use extortion) to gain sensitive military information that is of political rather than economic value.
What Are the Sentences and Consequences for White-Collar Crimes?
White-collar crime punishment severity varies drastically based on the severity of the offense. A white-collar crime can mean anything from checking your personal email on your office computer during your lunch hour (unauthorized use of a computer) to running an international Ponzi scheme that defrauds people out of hundreds of millions of dollars. White-collar crime jail time and financial penalties vary accordingly:
- A summary offense carries a maximum sentence of a $250 fine and 90 days in jail.
- A third-degree misdemeanor carries a maximum sentence of a $5,000 fine and 90 days in jail.
- A second-degree misdemeanor carries a maximum sentence of a $5,000 fine and two years in prison.
- A first-degree misdemeanor carries a maximum sentence of a $10,000 fine and five years in prison.
- A third-degree felony carries a maximum sentence of a $15,000 fine and seven years in prison. Insurance fraud punishment in PA is determined by its status as a third-degree felony, for example.
- A second-degree felony carries a maximum sentence of a $25,000 fine and 10 years in prison.
- Federal prosecutions have their own sentencing rules and can be far more serious than state sentences.
Given this disparity, there is no meaningful “white-collar crime average sentence”. Additionally, white-collar crime punishment doesn’t necessarily end once you leave jail or prison. You may also face probation or parole. Life after a white-collar crime can be difficult as well, since you may have trouble securing employment or professional licensing.
How the Statute of Limitations Can Impact a White-Collar Crime?
Once someone commits a crime, the prosecutor typically has a certain amount of time, during which time they must either charge the perpetrator or abandon the prosecution. The applicable statute of limitations determines this time limitation, and the exact time varies from crime to crime.
Typically, the federal statute of limitations varies from 2 to 12 years. If no statute of limitations determines the time period, the fallback period is five years from the date of the offense. Certain offenses, such as murder, have no statute of limitations, meaning that the prosecutor can charge you no matter how much time has elapsed since the commission of the crime.
Remember that all the prosecutor needs to do is charge you, however, not necessarily arrest or convict you. To charge you, the prosecutor needs a certain amount of evidence against you.
White Collar Criminal Defense Strategies
There are many possible strategies that your lawyer can use to defend you against a white-collar criminal conviction, including:
- Expiration of the statute of limitations (see above).
- Lack of intent to commit a crime. Simply making an error in arithmetic, even a large one, is not a crime.
- Entrapment: This defense applies when law enforcement officers entice you to commit a crime that you would not have committed otherwise. Law enforcement officials cannot entice a law-abiding citizen into committing a crime and then arrest them for it. Nevertheless, “sting” operations against known criminals are considered appropriate.
- Incapacity: If the defendant lacked the ability to understand the nature or consequences of the criminal act, their lawyer might assert an incapacity defense.
- Plea bargaining: Plea bargaining occurs when you agree to plead guilty to a lesser offense. This lessens your punishment while saving the prosecutor the trouble of going through a trial.
Many other possible defenses exist as well, depending on the circumstances
White-collar criminal charges are no laughing matter. Prosecutors are extremely aggressive, and sentences are harsh. If you are facing a white-collar criminal charge or grand jury indictment, call Alan J. Tauber at (215) 575-0702 or contact us online.
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