When you hear the word “crime,” you may imagine violence against the victim. In fact, violent crime is not the only form of crime. For financial gain, an individual or a group of people especially in positions of authority can commit non-violent crimes, which are called as white collar crimes. Well, here we will share some of the most common types of white collar crimes.
What is White Collar Crime?
According to the FBI, white collar crime is non-violent crime where the main motive is for financial gain either in an effort to steal money or property, scam, or to avoid paying. Also, white collar crime is often called “paper crimes.” Usually, the perpetrators of white-collar crimes occupy professional positions or have well above average compensation in the business or government sectors.
For your information, white collar crime is a term that was coined by sociologist and criminologist Edwin Sutherland in the 1930s. Professor Sutherland used the term “white-collar crime” to describe the type of crime usually committed by a person who is in a respectable position in society and possesses a high social status.
The FBI do a white-collar crime program that focuses on analyzing intelligence and solving investigations. Their investigations can be regional, national, or international. To focus on the complexities these white-collar crimes, FBI corporates with partner law enforcement and regulatory agencies like:
- Securities and Exchange Commission
- Internal Revenue Service
- Commodity Futures Trading Commission
- Financial Crimes Enforcement Network
- Unite States Postal Inspection Service
Most Common Types of White Collar Crimes
Apparently, there are a lot of white collar crimes. Below we will share some of the most common types of white collar crimes.
1. Corporate Fraud
Corporate Fraud is one of the most common types of white-collar crimes. It is also referred to as “business fraud.” Usually, corporate fraud committed by individuals or groups within organizations for financial gain. The FBI, as the lead agency investigating corporate fraud, focuses on cases that involve falsification of financial information, Self-dealing by corporate insiders, and accounting schemes designed to conceal this type of criminal conduct, as well prevent the Securities and Exchange Commission from conducting their investigation.
2. Money Laundering
Money laundering is another common type of white-collar crime. Shortly, it is the process of disguising the proceeds of illegal activities as legitimate funds. This type of white-collar crime involves funneling the cash through some accounts or a series of transactions so that it appears as if it came from a legitimate source. With money laundering, perpetrators can avoid taxes, accumulate wealth, increase profits, and fund further criminal activity. Of course, it is a major issue in lots of countries around the world. To detect and prevent money laundering, the FBI coordinates with other law enforcement agencies regularly.
3. Embezzlement
Embezzlement is also one of the most common types of white-collar crimes. It is the theft of funds or assets committed by a person who was entrusted with them. Usually, embezzlement occurs when a person entrusted by another person to handle money or property utilizes his/her position to misappropriate funds for personal gain. An example of embezzlement is a company’s financial manager who steals money from the company’s accounts. Another example is when a politician misappropriated campaign funds to cover their personal expenses. Based on the research, this type of white-collar crime can occur in any industry. However, it is particularly common in finance and real estate.
4. Ponzi Scheme
We are sure that you will be familiar with the term “Ponzi Scheme.” It is a type of investment scam where returns are paid to earlier investors using the capital contributed by newer investors. Usually, individuals or organizations that engage in Ponzi schemes will focus on attracting new investors to pay the older investors. When there are not enough new investors to pay older investors, Ponzi Schemes will collapse, leaving lots of investors with big losses. For your information, this type of investment scam is named after Charles Ponzi. He is an original perpetrator of such a scheme who made $250,000 a day through his mail coupon fraud in 1920.
5. Insider Trading
The next common type of white-collar crime is insider trading. This crime was committed by individuals involving the use of non-public information to make trades in the stock market. Usually, this non-public information is obtained by individuals who have access to secret information. Of course, insider trading is illegal. This is because it gives individuals an unfair advantage over other investors in the stock market.
6. Cybercrime
This type of white-collar crime involves the use of computer systems and a computer network to commit a wide range of crimes. Some examples of cybercrimes are identity theft, hacking, privacy violation, and online scams. Apparently, cybercrime is a growing issue, as more and more people make their financial transactions online.
7. Bribery
Bribery is a white-collar crime that offers an individual cash or product in exchange for a favor or service. An example of this crime is a person who bribes public officials or employees to get preferential treatment. Another example is a person who bribes a customs official to transport prohibited goods.
A bookworm and researcher especially related to law and citizenship education. I spend time every day in front of the internet and the campus library.
