You may have been listening to a California talk show and heard the term “white-collar crime” but are unsure what it means. White-collar crime can be defined as a nonviolent crime that usually attempts to defraud someone or a business of an asset. There are many types of white-collar crime.
While there are minor variations, securities fraud usually involves misrepresenting information that investors use to make decisions. Ponzi schemes, pyramid schemes and late-day trading are examples of securities fraud. Often, these investigations are carried out by the U.S. Securities and Exchange Commission.
Embezzlement is the taking of personal property by someone trusted with it. The embezzler can keep the property or give or sell it to a third party. Sometimes, the person takes a large sum of money at one time and disappears; other times, the person takes smaller amounts over a longer time. The Internal Revenue Service often goes after embezzlers who fail to report the money as part of their income.
Corporate fraud is another example of white-collar crime. It is an illegal or unethical act by a corporation or a company’s representative. Examples of corporate fraud may include inventory theft, payroll fraud, credit card scams and forgery.
Money laundering involves large sums of money, often obtained through drug trafficking or terrorist funding. Usually, large sums of money are broken into smaller deposits and placed in legitimate financial institutions. Then, the money launderer uses a series of dirty bookkeeping tricks before transferring the money to a shell corporation, often in another country.
White-collar crime defrauds a person or corporation of their assets through illegal means.