In most white-collar schemes, the overall purpose is to gain a desired
result through concealment, trickery, deception or dishonesty. White-collar
crimes are federal and state issues. This means either New York or federal
enforcers can prosecute the crimes. Moreover, federal crimes will be taken
up by the state's district courts.
For those facing charges for white-collar criminal activity, it helps to
be aware of some of the most frequent federal offenses. Of course, many
crimes can be dealt with under either venue - state or federal law - as
many offenses overlap in both sets of mandates.
The most frequently prosecuted federal white-collar crimes are those that
violate "RICO." The term "RICO" represents
Racketeer Influenced and Corrupt Organizations. This makes up the law that was created to charge those who commit two
or more criminal actions related to racketeering. Criminal activity must
concern interstate commerce and be executed within one decade. However,
there are other federal crimes, which are commonly prosecuted.
Fraud through the mail is a common white-collar offense. This fraud, which
is laid out in federal laws, involves a method to defraud someone of property
or money via the United States Postal Service or a different mail carrier.
mail fraud could involve "selling" property that does not exist to a person
in another jurisdiction (outside the state) through the mail. This might
be common with online purchases, for example.
Fraud through a wire is another common federal offense. This federal activity
involves fraud executed through the use of a wire. For instance, this
could include the radio or telephones. This crime is easier to execute
because it is relatively comprehensive and can involve many different mediums.
Ponzi schemes are white-collar investment frauds. These types of crimes
are often detailed in the media (for example, the recent Bernie Madoff
case). The easiest example is when an investment supervisor takes cash
from new investors to compensate older investors. This is done instead
of compensating older investment returns with profits that were truly
earned by the company. This creates a vicious cycle of money flow.
The fraud is named after Charles Ponzi of Boston, Massachusetts. In the
early 1900s, Ponzi initiated a system that guaranteed investors a 50 percent
profit on investments. Ponzi paid back initial investors; however, the
overall plan fell apart when he was unable to repay subsequent backers.
Many investors fail to discover that they have been a victim of a scheme
because they continue to receive returns. This type of federal criminal
activity often involves several players. However, in the end, the plan
breaks down when the main operator flees with all of money collected from
investors or when no more new investors can be found to perpetuate the
continued payment of fake dividends.
Another common federal offense involves bankruptcy fraud, which is akin
to other forms of white-collar fraud. This type of fraud is executed when
one hides assets or property that belongs to the filer's estate in
a bankruptcy matter.
In most federal jurisdictions, a prosecutor must prove all of the following
"beyond a reasonable doubt":
1. A bankruptcy proceeding existed
2. The assets or property belonged to the estate that is bankrupt
3. The defendant hid such property from the marshal, creditors, trustee,
custodian or another individual responsible for managing the property
4. Assets were guarded "knowingly and fraudulently"
All of these elements must be proved by federal prosecutors in order to
secure a conviction.
Securities fraud and insider trading
The most common white-collar crime is fraud concerning securities. This
fraud is chargeable when a person (or corporation/entity) violates federal
securities laws during the purchase or sale of securities. Violations
of such laws can occur in a number of different ways.
Act of 1933 is one of the primary governing bodies for federal securities law. Breaches
of federal law include the following:
- "Purchasing or selling unregistered securities with the Securities
and Exchange Commission" (SEC)
- Insider trading
- Purposefully making false statements or important omissions of fact in
documents supplied to the SEC
- Participating in interstate discussions with potential buyers of securities,
wherein negotiations employ any type of plan to defraud (including statements
or omissions of fact that are intended to mislead buyers)
The following elements must be evinced for a defendant to be convicted
of securities fraud:
- The defendant used a plan or device to defraud someone; made a false statement
concerning a material fact; or did not disclose a material fact, which
resulted in misleading statements from the defendant
- The defendant's acts (or omissions) were connected with the purchase
or sale of securities
- The defendant used the telephone or mail in connection with these acts
- The defendant acted in an effort to defraud buyers or sellers of securities
The resulting consequences of this white-collar crime can involve years
behind bars and millions of dollars in fines (for a corporation).
Federal white-collar crime, in general
Ultimately, these schemes make up the most common federal offenses; however,
there are several other types of federal white-collar crimes. Again, many
offenses overlap in nature and are chargeable under both state and federal
laws. For example, internet crimes, bank fraud, embezzlement, tax evasion,
bribery insurance or health fraud and
money laundering are all white-collar offenses. Moreover, other offenses could grace the
list. This area of law is very multifaceted.
Today's fraud schemes are more complicated than ever. Many methods
involve several defendants and a number of different criminal elements.
For this reason, it helps to have legal assistance when facing such accusations.
A conviction could result in egregious repercussions for a person or company.
Many offenders are slapped with decades behind bars and impossible fines.
If you or your business faces charges for a white-collar offense, do not
think twice about contacting a legal professional. New York state and
the federal government will stop at nothing to pursue suspected offenders.
A professional versed in white-collar crime laws can help you assess your