White collar crime refers to a variety of offenses that often are driven by the promise of financial benefit. Many common crimes and scams — including pyramid schemes, tax evasion, and insurance fraud — fall under the umbrella of white collar crime.
What are some of the different types of white collar crime cases, and what should you do if you’re arrested or charged with one of these offenses?
In money laundering, funds gained from criminal activity are run through various financial transactions to obscure the initial source of the money.
Typically, a money launderer will deposit the funds into a bank or brokerage account. The funds then go through complex transactions, often involving various business entities. Finally, the fresh money is intermingled with funds that have been obtained by legal means, making the origin of the cash difficult to trace.
The Internal Revenue Service often plays a role in money laundering cases because financial investigations are key for prosecutors to obtain convictions. The crime is complex and can involve a multitude of tangled details and financial institutions in different states and countries.
Potential penalties for money laundering include prison sentences of a year or more, along with fines up to $500,000 in federal cases.
Embezzlement typically involves stealing money from an employer or a person whose funds a defendant manages. In most cases, embezzlement charges arise when employees are accused of draining funds over time from an employer.
The crime also can be committed in non-employer relationships, such as an accountant who steals from a client or a manager who siphons funds from an entertainer. They key component in embezzlement is that it involves stealing money from someone the accused person has been trusted with protecting.
To prove a charge of embezzlement, a prosecutor must establish first that a fiduciary relationship existed between the defendant and the alleged victim. In addition, the defendant must have received the property in question via the fiduciary relationship and not through some other method. The prosecutor also must prove that the defendant took ownership of the property and acted intentionally.
Penalties for embezzlement depend on the amount of money taken but can include fines and, in some cases, a prison sentence.
Tax evasion is the deliberate act of avoiding payment of taxes owed. The crime has a variety of manifestations, from providing knowingly false information on tax returns to illegally changing ownership of property to avoid payment of taxes. Businesses and individuals can be accused of tax evasion.
A common method of tax evasion is deliberately trying to hide sources of income. For example, contract employees who are paid in cash might misstate their earnings on tax returns, or an employee who is paid in part through tips might not report all earned income.
Along with under reporting income, tax evasion can include intentionally underpaying taxes, providing false information on income records, claiming fraudulent business expenses, or wrongly claiming dependents.
Failing to file a tax return for a year in which taxes are owed also is considered tax evasion. The penalty can include a fine of as much as $25,000 and a prison sentence as long as a year. In addition, a felony conviction can result in a prison sentence up to five years and a fine of as much as $100,000.
Many white collar crimes fall under the umbrella of fraud, which typically involves deception for the purpose of monetary enrichment.
Securities fraud is a common type of fraud and can include insider trading, when an individual with “inside” information about an investment benefits by trading stocks or other assets based on the information. For example, if a CEO knows that negative news about the company is about to come out and quickly sells stock, a charge of insider trading could result. Securities fraud also can occur when company representatives make false or misleading statements to attract investments or to get more business.
Other types of fraud include insurance fraud, mail and wire fraud, and mortgage fraud. Also, a Ponzi scheme to provide fraudulent information to investors and take their money is fraud. Both the state of Illinois and the federal government have laws that regulate various types of fraud, and penalties can include more than 10 years in prison and fines over $10,000 for federal convictions.
Work with a Knowledgeable Defense Attorney
If you’re charged with a white collar crime, you could be facing years in prison and hefty fines. By working with an experienced Chicago criminal lawyer, you take a positive step toward minimizing any penalties. Call Attorney Michael J. Petro at 312-913-1111 if you’ve been accused of embezzlement, fraud, or other white collar crime.