White Collar Law
White collar law is the field of law that involves prosecuting crimes committed by businesspeople who, due to their seniority, have access to large amounts of people’s money. The most common white-collar crimes are fraud, embezzlement, tax evasion, and money laundering. There are also illegal foreign transactions by businesses which are covered under the Foreign Corrupt Practices Act. This act bans American businesses from paying government officials to acquire or maintain business and contracts in foreign countries and also forbids third-party payments, including venture partnerships where payment is made to a third-party source for the purpose of bribery of a foreign government official. According to the FBI, white collar crimes cost the United States more than $300 billion annually.
Fraud is one of the most prevalent white-collar crimes and involves deceiving someone for financial gain. One type of fraud is securities fraud which could involve insider trading, which is when someone with insider information about a company or investment trades on that information, thus violating a duty or obligation. To commit securities fraud, an individual must speak on the business’s behalf and make false or misleading statements. Other types of fraud include mortgage and insurance fraud. Insurance fraud can involve individuals engaging in insurance schemes to illegally collect on insurance policies.
Embezzlement is taking money from an individual to whom there is an inherent duty or obligation to, such as an employer. This is the most common form of embezzlement and can also be conducted by lawyers who misuse client funds to commit embezzlement. Investment advisors can use client funds as well in violation of their obligation to their client.
Tax evasion occurs when an accused party tries to avoid paying taxes he or she owes. This crime can involve filing taxes with falsified information or transferring property to avoid tax obligations. Individuals and businesses can be involved in tax evasion.
Money laundering is the act of distributing illegally obtained (or “dirty”) money through various transactions to make the money seem legitimate. There are usually three steps to money laundering that include depositing the money into a financial institution, separating the money from its source through complicated transactions which make it harder to trace, and mixing legitimate money with illegally obtained money by buying or selling assets.
A lawyer who practices within the field of white collar law frequently corresponds with their clients and is typically a federal defense attorney as prosecution is often conducted by governmental authorities. There is a commerce clause to the Constitution which gives the government the authority to regulate white collar crimes. Agencies involved in their investigation include the FBI, IRS, US Secret Service, US Customs, the Environmental Protection Agency, and the Securities and Exchange Commission. Federal authorities can also place sanctions on corporations as seen in the case against Enron in the early 21st century. Companies or clients can be penalized for their acts through fines, home detention, community confinement, paying the cost of prosecution, forfeitures, restitution, supervised release, and imprisonment, which can mean a lengthy prison sentence if one or more victims sustains significant financial injury.
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