White Collar Crimes
Brittany Hedges
Park University
MG260
Samantha Burke
30 November 2014

White Collar Crimes
The phrase "white-collar crime" was originated in 1939 during a segment by Edwin Sutherland to the American Sociological Society. Sutherland defined the term as "crime committed by a person of respectability and high social status in the course of his occupation." ("White-collar crime", 2014) With any definition, comes controversy and debate when it comes to any definition, to include white-collar crime. The biggest debate is on what constitutes a white collar crime. The term today is referred to a type of crime, non-violent, and committed mostly in a commercial setting for individual financial gain. A lot of white-collar crimes are hard to prosecute due to the sophisticated nature in which they use to conceal the crime. (Mallor, pg 158)
There are several different types of white-collar crimes. These include the most commonly known Ponzi schemes, tax evasion, insider trading, money laundering, embezzlement, bribery, counterfeiting, and kickbacks. Fraud cases include computer and internet, credit card, phone and telemarketing, bankruptcy, healthcare, insurance, mail, securities and financial fraud. Antitrust and environmental violations are also types of white-collar crimes. ("White-collar crime", 2014)
White-collar crimes do not just involve investments. Such crimes can be found in environmental schemes in which corporations will overbill cleanup costs. Racketeering is any illegal business which gains personal profits. Telemarketing fraud involves paid actors whom request donations for supposed charities through the use of credit cards. Several schemes, other than the widely-known Ponzi scheme, exist as well. These typically involve actors to do the dirty work. Airport scams, coupon redemption, fortune telling, home improvement, and even odometer fraud are other types of white-collar schemes. ("Types and Schemes of White Collar Crime", 2011)
White-collar crimes led to the introduction of the Sarbanes-Oxley Act. After numerous highly publicized accounting and financial controversies came to light, Congress was forced to do something. The Sarbanes-Oxley Act ensured corporations were being held responsible for their company’s financial information. This act set several standards; to name a few, it made it illegal for a company to shred audit records, established hefty fines and prison time in the case of altering or destroying important financial documents, and provided legal protection for whistle-blowers. (Mallor, pg 163) As stated on the Cornell University Law School website, “According to the Federal Bureau of Investigation, white-collar crime is estimated to cost the United States more than $300 billion annually.” Most of the time the government will charge the person or persons for the crime, the government has the power to charge corporations for such crimes. The penalties for white-collar offenses include fines, home detention, and community confinement, paying the cost of prosecution, forfeitures, restitution, supervised release, and imprisonment. However, sanctions can be lessened if the defendant takes responsibility for the crime and assists the authorities in their investigation. Any defenses available to non-white-collar defendants in criminal court are also available to those accused of white-collar crimes. ("White-collar crime", 2014)
One of the most widely known white-collar crimes was committed by Bernard Madoff. Madoff was a stockbroker that ran his firm as a Ponzi scheme. (Angelova, 2009) A Ponzi scheme is an investment scheme in which investors are drawn in to a firm which promises exceptionally high returns. The scheming actor never actually invests their money, but does pay dividends. Those dividends are paid using the incoming money from new investors. Once the schemer no longer has the funds to cover the dividends, he or she is forced to flee and takes any