Introduction to White Collar Crime: Definition and Types

White collar crime (WCC) is often mistaken as criminal wrongdoing on the part of high-profile executives and wealthy individuals. In fact, it refers to any nonviolent crime that is performed for financial gain. That can involve anyone, whether the individual committing the act is wealthy or poor, an executive or unemployed.

It\’s important to realize that white collar crimes happen all around us without our realizing it. They rarely make the evening news, partly because they are difficult to identify (we\’ll explain the reason in a moment). But their consequences can be severe, sometimes impacting hundreds, even thousands, of lives.

In the space below, we\’ll define WCC and explain some of the issues involved with trying white collar cases in court. You\’ll also learn about the different types of white collar crime.

White Collar Crime Explained

One of the biggest differences between WCC and other criminal acts is that the former rarely involves violence. The cases often involve altering documents, changing computer records, and benefiting from inside information on certain stocks. Much of the activity that qualifies under this category is fraudulent rather than violent.

White collar crime is sometimes mistaken for corporate crime. Although the two are related, they refer to different things. The former refers to activity performed to benefit one person. The latter is performed to benefit a business entity. For example, an individual might engage in identity theft while a company may knowingly violate environmental laws or steal trade secrets from a competitor.

Before a white collar case makes it to trial, a grand jury is convened to determine whether there is sufficient evidence to pursue it. Up to 23 jurors comprise the jury. If they determine that enough evidence exists, the district attorney will typically proceed and issue an indictment.

Factors Involved With Trying White Collar Cases

The district attorney must choose from among several potential cases since resources are usually limited. Priority is given to those for which indictments are more likely to lead to convictions. This means there must be nothing to suggest the cases may be dismissed or thrown out by a judge.

A lot of people are understandably bothered that defendants in white collar cases are often treated favorably compared to defendants in blue collar cases. For instance, bail may be set lower or they might be given greater leniency with respect to plea bargains. It\’s worth highlighting the reasons this occurs.

First, as noted previously, white collar crime rarely involves violence. The release of a suspect therefore poses a much lower risk of harm to the surrounding community.

Second, suspects are kept in jail to await trial when there is a high risk they will repeat the same crimes if they are released. While such a risk exists for those who attack people or rob liquor stores, it is far less true of someone who has committed insurance fraud or securities fraud. These latter crimes take more time and effort. They are more difficult to replicate.

Third, unlike cases that involve violence, white collar cases are often difficult to litigate toward convictions. Prosecutors usually need the help of other defendants, and thus are more open to extending lenient plea bargains.

Types Of White Collar Crime

White collar crime encompasses a wide range of criminal acts, most of which tend to be complicated. Securities fraud and insider trading are among the most common. The former refers to manipulation of the market, typically focused on a particular stock. The latter refers to trading a stock with information that is not publicly known.

Embezzlement is another example of WCC. This can take the form of quietly funneling money from the company\’s payroll into a personal account. Or, it can involve something more complex, such as the type of fraud committed by the officials at Enron in the 1990s.

WCC can also involve credit card fraud, tax evasion, forgery, and money laundering. Creating or selling counterfeited goods, bribing officials, and identity theft are other examples.

Many people are tempted to commit various forms of white collar crime because the singular impact to others seems limited. For example, insider trading does not adversely affect one particular person. All shareholders – and even all market participants – share the consequences of the criminal\’s actions. Likewise, with insurance fraud, the \”victim\” is perceived to be the insurance company, not any single policyholder.

Unfortunately, the aftereffects of white collar crime are often severe and far-reaching, impacting individuals in numerous ways. The fact that the victims are sometimes anonymous does little to mitigate the damage.

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Keywords: Law, Legal, Lawyer, Attorney, Crime, Criminal Justice

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