The Federal Bureau of Investigation designates White-Collar Crime as a financially motivated crime committed by individuals, businesses, and government professionals. These crimes can be nonviolent or indirectly violent.
They destroy companies, decimate life savings, cost investors billions of dollars, and erode public trust in institutions. Let the SHElaw firm® help you with your white-collar crime issues.
The Six Types of White-Collar Crime
There are six primary types of White-Collar Crime. Each type can be prosecuted in state or federal courts and may be considered a misdemeanor or felony, depending on the circumstances of the charge.
Health Care Fraud can be committed by:
- Providers with misleading billing
- Patients abusing the Medicare and insurance systems
- Insurance companies not delivering the benefits as promised
A well-known Health Care Fraud is Durable Medical Equipment (DME) providers billing Medicare for equipment that is not physician ordered, or never delivered.
The Medicare program has increased safeguards and investigators in the past ten years to slow down this abuse. The fund lost billions of dollars to fraudulent billing before that.
These charges are prosecuted in federal court because Medicare is a government program.
Corporate Fraud is usually committed by company executives using early knowledge of the company dealings and financial changes to better themselves. A widely published example of insider trading involved America’s favorite homemaker, Martha Stewart.
Sam Waksal, CEO of ImClone called Martha Stewart and told her that the stock was about to plummet. She sold 3,928 ImClone stock shares one day before the public announcement of the declined review by the FDA of their newest cancer drug.
Numerous ImClone executives and others were charged with insider trading, bank fraud, and other crimes. Punishment for many was jail time. Martha Stewart received five months of jail time for her involvement.
Money Laundering is the fraudulent process of taking illegally obtained funds and making them look like funds acquired legally. The process always follows these three steps:
A possibly familiar example is a restaurant rumored to launder income from a drug dealer in the family. They would report the income as restaurant profits.
Deposit it in the restaurant business bank account or invest it in another legal endeavor. Eventually, the funds come back out as legitimate payments to the original individual to use for illegal activities all over again.
Securities & Commodities
Securities and Commodities Fraud involves complex investment vehicles promising low-risk investment and guaranteed high returns.
Some examples are
- Advance Fee Cons
- Nigerian letter or 419 schemes
- Telemarketing Fraud Schemes
- Ponzi Financial Investing
- Pyramid Scheme (Deceptive Multi-Level Marketing)
The first three are usually perpetuated on individuals through the telephone, internet, or mail by strangers pretending to be someone they are not.
The last two types occur when a financial advisor or trusted friend advises you to make investment choices that have no risk and high returns.
A well-known case is the Ponzi scheme developed by Bernie Maddof. Mr. Maddof laid the foundation for his investment fraud as early as the 1980s. In 2005, an investigation of his investments began due to complaints to the SEC of two individuals.
Before that, other people active in the investment field had attempted to bring Maddof’s fraudulent activities to the attention of regulators. Maddof was good friends with individuals in positions of power, so he had never really been investigated.
The initial estimates of this Ponzi scheme were over $65 billion. In June 2009, Maddof pled guilty and was sentenced to 150 years in Federal prison for a long list of fraud charges. The amount owed at the time of sentencing was still $20 million.
This was after the location of some funds for distribution, assets from the sale of the Madddof estate, and the recovery of international accounts.
Mortgage and Financial Institution Fraud
Financial Institution Fraud is when someone in a bank or credit union embezzles or misappropriates funds. This fraud can be so extensive it causes the bank or credit union to fail.
Mortgage Fraud includes two areas of misrepresentation.
- Fraud for Housing is when an individual lies to affect a mortgage decision by the lender.
- Fraud for Profit involves professionals in the home buying process stealing cash and equity from the homeowners or lenders.
A local example is Eric Hill, a real estate agent in Atlanta, GA. He developed a system to get fraudulent mortgage loans approved. He employed other real estate agents, document fabricators, and people impersonating employers and references.
In early 2022, he was found guilty and sentenced for participating in a mortgage fraud scheme that grossed over $21 million in fraudulent mortgage loans.
This also caused over $850,000 in paid claims by the FHA for defaulted mortgage loans. Many co-conspirators were also prosecuted and sentenced.
Intellectual Property / Piracy
Intellectual Property Theft/Piracy involves stealing ideas, inventions, and creative expressions from people or companies. This can include everything from software, trade secrets, and proprietary products to movies, music, and writing.
There are innumerable examples of intellectual property theft cases. A great deal of research by investigators is necessary for a charge of stolen IP. They usually start by following the money.
Most IP theft and piracy actions are for illicit funds in one way or another. Many cases involve former employees taking information that the company believes they own. There are cases where the employee does own the information, we need to provide the proof.
An interesting international espionage case is told in the movie, The Falcon and the Snowman. It is a true story about Boyce, a defense industry employee that conspired with Lee to steal and sell U.S. classified information.
Boyce stole the secrets from the DOD, and Lee traveled to Mexico to give the secret documents to KGB handlers. This resulted in compromised U.S. communication ciphers and long-held trade secrets lost.
They were paid thousands of dollars for the information, but they both got caught. Boyce received a sentence of 40 years and Lee faces life in prison.
One of the most publicized music copyright lawsuits involved pop star Robin Thicke and hip-hop legend Pharrell Williams in the 2013 release of Blurred Lines.
The estate of Marvin Gaye felt the release contained a similar party atmosphere and instrumentation to Gaye’s 1971 Got To Give It Up. The case went to trial in 2015 and went unresolved for three years.
The jury found Thicke and Williams guilty of copyright infringement and awarded the Gaye estate $7.4 million plus half of the royalties from Blurred Lines. In 2016, attorneys for Thicke and Williams appealed to the Ninth Circuit Court of California.
They offered that Gaye’s spokesperson, Judith Finell, a musicologist, had presented unprotected elements of the music in order to sway the ruling. Finell had presented the ten-note melody characteristic of Got To Give It Up, which had been used in some of the Blurred Lines melodies.
The instrumentation, distinctive falsetto, and the use of party noises are all in Gaye’s song. She claimed these were all privileged. The attorneys representing Thicke and Williams stated that if the sheet music filed with the U.S. Copyright Office did not include specific details, privilege did not apply.
The themes and words of the two tunes were in almost total contrast. Gaye’s had been a Soul and R&B success about a man finding a woman for dancing. Blurred Lines was a Rock and Roll success questioning interpretations of consent and rape.
The song is viewed as one of the most controversial songs of the 2010s. In 2018, the court upheld the original ruling in the 2015 judgment. This landmark verdict established new parameters for copyright cases.
This ruling proves that infringement judgments can be based not just on the actual words or musical score, but on its groove and overall vibe too. This change makes artists, musicians, and songwriters extremely careful about infringing on musical history in any way.
Contact SHElaw firm Today if You are Facing White-Collar Crime Charges
White-collar crimes vary greatly. Sometimes they are the result of simple misunderstandings or lack of communication. Other times, they are clearly an effort to separate an individual or business from their hard-earned benefits.
Our attorneys at the SHElaw firm® can help you find out the circumstances influencing that determination and the way you should proceed in the future.
We are here to help you during a tough time in your life. Call our offices today to speak with our experienced and knowledgeable attorneys at 470-378-1162.