What Is White Collar Crime?

A white-collar crime is a non-violent type of crime. Often, the motivation is financial. Typically, white-coll criminals have a position of power in a company that commands compensation above the average salary. 

In the 1930s, criminologist Edwin Sutherland coined the term. He used the phrase to describe crimes that people of high social status committed. Prior to this introduction to the concept, people often believed that upper-class individuals weren’t capable of criminal acts. 

Blue Collar or White Collar Crime: What’s the Difference?

Oftentimes the difference between blue-collar and white-collar crime stems from the type of access the person has. For example, blue-collar crimes tend to be more straightforward and direct. This includes robbery, theft, etc. Because they lack access to corporate information, it’s more difficult for them to commit high-level fraud. 

On the other hand, a white-collar criminal tends to have more access to this information and the systems involved. For instance, a loan officer at a bank has access to a broad spectrum of records, information, and systems. 

With this access, they have the potential to commit widespread, complicated schemes. 

Common Types of White Collar Crime

White-collar crime is an umbrella term, As such, it encompasses a broad array of offenses. Let’s look at a few of the more common forms of these crimes. 

Insider Trading

When someone commits insider trading, they act with the benefit of knowledge that is not public. This knowledge gives them an advantage in financial markets. For instance, an investment banker knows about a forthcoming acquisition between two companies: A and B. 

With this knowledge, they buy stock in Company B because they expect it to rise once this knowledge becomes public. This gives them an unfair advantage over other investors. 

Identity Theft and Cyber Crimes

Identity theft and hacking are the top two computer crimes. Across the United States, experts estimate that losses from identity theft totaled almost $2 billion in a single year. With over 73,000 cases, California has the most reported cases of any state in the US. 

Fraud

As white-collar crime is an umbrella term, so is fraud. It covers a handful of different schemes people use to defraud others of their assets. One common example of fraud is when someone claims to send another person a lot of money. However, that individual first needs to send a smaller amount. 

For instance, they may claim that they have access to an inheritance. However, to gain access, they need $300 to afford some processing fee. When the person sends them money, they never receive what was promised to them. 

Ponzi Scheme

This form of white-collar crime gets its name from Charles Ponzi, the original perpetrator. This scam is an investment scheme in which someone offers investors high returns on a project. As the person finds a new client, they pay off the initial investors. 

This continues until they no longer have the ability to attract the clients they need to pay off older ones. When this happens, the entire scheme collapses. This leaves many of the investors with massive losses. 

Embezzlement

Embezzlement covers theft and larceny. It ranges from an employee who steals a few dollars out of a cash register to complex schemes. In more complicated cases, the employee transfers millions of dollars out of company accounts. 

One popular example of this is in the plot of the movie Office Space. A group of employees attempts to set up a program that transfers fractions of cents out of company accounts over time. However, they accidentally set up one massive transfer. 

Money Laundering

As far as white-collar crime goes, money laundering is essential for those who deal in large amounts of cash. Through this act, someone funnels cash through different accounts and eventually into a legitimate business. 

At that point, it intermingles with genuine revenue, making the illegal source harder to identify. 

Counterfeiting

In order to combat counterfeiting efforts, many currencies are now more detailed and colorful. With modern technology, older forms of currency were easy to duplicate. However, the results remain to be seen as technology continues to advance on both sides. 

Espionage

When we think of espionage or spying, we often think of James Bond or international spies working to uncover information. Yet, we don’t think of it as a white-collar crime very often. 

However, when it involves corporations, it is definitely a white-collar crime. For instance, an agent of a foreign government or competitive company might seek out information or technology from a company. 

One tactic is to approach an employee at that company. The “spy” offers to pay them a large sum in exchange for a prototype, copy of a document, etc. 

White Collar Crime Classifications

Oftentimes, these crimes fall into two categories. 

Corporate Crimes

Some white-collar criminals act at a corporate level, as a group. For instance, a firm may encourage or simply allow employees to engage in insider trading. As they use private information to gain an advantage, it boosts their profits. 

Money laundering is another common crime conducted at a corporate level. 

Individual Crimes

At the individual level, a person or group acts outside of a corporation. For instance, one person might build out a Ponzi scheme. Alternatively, a group might form to commit cybercrimes collectively. 

Other individual crimes commonly include hacking, counterfeiting, and dozens of fraud schemes.

Legal Review for White Collar Crime

When you face charges for a white-collar crime, it’s essential to gain legal representation. With a criminal defense attorney on your side, you have an advocate to protect your rights and freedom. 

If you or a loved one currently faces white-collar criminal charges, contact the Martinez Law Firm for a free legal consultation. To build a strong defense, you need an experienced attorney.