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Common White Collar Crimes

Fraud

This common crime includes knowingly sharing false information with the public about the company you are representing. There are many things you can lie about in the corporate world. Companies can have sketchy accounting or fake trading that gives a false financial standing of their company. The misleading information tricks investors into buying stock even though the company may not be growing. Then there is “insider trading,” where people on the inside of the company know information about earnings or investment and trade because of it.

For example, when Martha Stewart found out the company she had stocks in was going to implode, she sold all of her stock. Aside from security frauds, there are mortgage and insurance frauds. Oftentimes a person will lie on their insurance application so they get insurance money that they shouldn’t receive. An example of mortgage fraud is when an individual over-values their house to get a bigger loan from the bank and spend the money on other things. There are many shapes and sizes of fraud, but all involve lying for monetary gain.

Embezzlement 

Embezzling is when an individual takes money for themselves instead of rightfully putting it in the right place. This person is usually trusted with money and has some sort of authority. There are several types of embezzlement.

- The first is syphoning, where the person just takes money for themselves straight from the customer.

- Another type is check kiting. The FBI defines this crime as, “a scheme which artificially inflates bank account balances, in accounts that are under common control, for purposes of obtaining unauthorized use of bank funds, through the systematic exchanging or swapping between these accounts, in a manner which is designed to misuse the float that exists in the banking system.” This corruption costs banks about $1 billion dollars a year.

- Lapping is the third type of embezzlement. This is when an employee takes money from a customer’s account. Then they will take money from another customer’s account to cover it. Then a third account to cover the second account, etc.

- Payroll embezzling is when someone in charge of payroll sends more money to themselves in another account. This can be done with overtime too if someone lies about their overtime hours. Overall, this is just dishonesty in the workplace that can go too far and last for a long time.

- Kickbacks. This is when a vendor has a company pay directly to the individual. The vendor may then charge the company extra to provide a profit for them on the side that they keep. This often results in the company getting overcharged for materials, and the vendor’s company is unaware of the kickbacks the employee is getting.

Tax Evasion

This is another very common white collar crime. Here, an individual tries to get out of taxes that they owe. Many wealthy businessmen and politicians try to do this. This can be as simple as incorrectly filling out tax forms or as severe as relocating property illegally to dodge tax obligations. Martha Stewart was also convicted of tax evasion for her mansions and had to pay $220,000 to New York for taxes and penalties.

Money Laundering

Al Capone is an infamous mobster who had laundered an estimated $1 billion dollars. He used laundromats to hide his illegal money, which is said to have sparked the term money laundering. This crime is when someone takes dirty illegal money and tries to make it clean through various transactions. The money is usually deposited into the bank and is put through many transactions to try and make it hard to trace. Then the criminal will purchase something with both clean and dirty funds to better hide the illegally obtained money.

These are only a few basic white collar wrongdoings and they can be mixed and matched together to create the most sophisticated ways to get money without getting caught. If you are ever worried about a sly guy in a suit and tie that works for you, the best advice is to pay attention to detail and have records of everything. The majority of these big businesses and their executives, like Enron and Kenneth Lay, get busted and the results are disastrous. It is best to stay away from these false practices and if you are involved or affected by any white collar crime, a defense attorney can help.

Sources:

http://www.legalzoom.com/legal-headlines/celebrity-lawsuits/10-celebrities-convicted-tax

http://www.businesspundit.com/10-most-notorious-money-laundering-cases-of-the-20th-century/

https://www.myteleflora.com/designeducation/Types-of-Embezzlement.aspx

http://www.bankersonline.com/articles/sfpv01n02/sfpv01n02a9.html

http://geoffreygnathanlaw.com/6-examples-of-embezzlement/