Law enforcement also investigates crimes that can occur quietly in the boardroom or online. These offenses include nonviolent crimes that were allegedly committed for financial gain.
White collar crime
These offenses are commonly referred to as white collar crimes. Examples of this type of crime include securities fraud, embezzlement, misrepresentation of corporate finances, fraudulent investment opportunities, corporate fraud and money laundering.
The term was created in 1949 and referred to offenses committed by people with respectability and elevated social status in their occupations. These crimes were perceived as being committed by office workers or professionals who wear shirts and ties. White collar crimes may be in corporations or government agencies, not just individuals. White collar crimes may involve corporations or government agencies in addition to individuals.
Money laundering
Money laundering involves taking cash from illegal activities and making it appear to be earnings from legal business activity. An unsophisticated example involves a criminal organization taking money earned from illegal activities, funneling it through a business such as a restaurant, depositing it into a bank and then distributing it to the owners. More sophisticated schemes involve numerous financial transactions.
Embezzlement
Embezzlement occurs when a person, usually in a position of trust, intentionally uses fund for a different purpose than intended. They may create invoices and receipts for activities that never occurred and use them for personal expenses. Examples include Ponzi schemes, destroying company records and taking company funds.
Corporation fraud
Most corporate fraud cases involve accounting schemes that were designed to deceive investors, auditors, and analysts about the corporation’s accurate financial condition.
Other corporate fraud involves self-dealing where employees try to enrich themselves while investors parties suffer the financial losses. Self-dealing involves a person in a position of trust who acts in their own interest in a deal instead of their client. It usually includes a conflict of intertest such as front-running when a broker enters into a trade because they have advanced knowledge of a large, nonpublicized transaction, which will benefit the broker.
Insider trading cases are more well-known. These involve individuals acting upon or sharing information that is not public and which could affect share price and other valuations of the company once it is released. This is illegal when it involves buying or selling securities on undisclosed information, which gives a person an unfair advantage of obtaining profit.
Investments
Ponzi and pyramid schemes involve drawing upon funds from new investors to pay the returns that were promised to earlier investors in the arrangement. The creators of this scheme must continuously recruit new investors to keep the scheme going for as long as possible. The plan falls apart when demands from existing investors are greater than the funds coming in from new investors.
A pump-and-dump scheme involves artificial inflation of lower-volume stocks on small over-the-counter markets. In the pump, unknowing investors are recruited through false or deceptive sales techniques, information, or corporation filings. Brokers, bribed by the conspirators, use high-pressure methods to increase the number of investors and raise the stock price. After the target price is reached, the conspirators dump their shares at large profits and innocent investors suffer the losses.
There are many other white-collar crimes, such as credit card fraud. The FBI, Securities and Exchange Commission, IRS and the US Postal Inspection Service are among the federal and state law enforcement agencies that investigate and prosecute these offenses.
These investigations and prosecutions may be costly and have serious and life-altering consequences. Attorneys can help assure that rights are protected.