what is white collar crime 
white collar crime is a nonviolent crime often characterized by deceit or concealment to obtain or avoid losing money or property or to gain a personal or business advantage examples of white collar crimes include securities fraud embezzlement corporate fraud and money laundering entities that investigate white collar crime include the securities and exchange commission sec the financial industry regulatory authority finra the federal bureau of investigation fbi and state authorities understanding white collar crime white collar crime is a term first coined by sociologist edwin sutherland in 1939 who defined it as a crime committed by a person of respectability and high social status during his occupation white collar workers historically held non laboring office positions while blue collar workers traditionally wore blue shirts and worked in plants mills and factories 1high profile individuals convicted of white collar crimes include ivan boesky bernard ebbers michael milken and bernie madoff their crimes have included insider trading accounting scandals securities fraud and ponzi schemes rampant new white collar crimes facilitated by the internet include so called nigerian scams in which fraudulent emails request help in forwarding a substantial amount of money to a criminal ring other common white collar crimes include tunneling insurance fraud and identity theft the madoff victim fund mvf distributed over 3 7 billion to nearly 40 000 victims worldwide in connection with the bernard l madoff investment securities llc blmis fraud scheme 2corporate fraudlarge scale corporate fraud that occurs in corporate or government institutions incurs a significant financial loss to investors and can damage the u s economy and investor confidence corporate fraud gathers the widest group of partners for investigations including the fbi the u s securities and exchange commission sec the commodity futures trading commission cftc the financial industry regulatory authority the internal revenue service the department of labor federal energy regulatory commission and the u s postal inspection service 3the majority of corporate fraud cases involve accounting schemes that are conceived to deceive investors auditors and analysts about the true financial condition of a corporation or business by manipulating financial data share price or other measurements to inflate the financial performance of the business in 2014 credit suisse pleaded guilty to helping u s citizens avoid taxes by hiding income from the internal revenue service and paid penalties of 2 6 billion bank of america sold billions in mortgage backed securities mbs tied to properties with inflated values without proper collateral and agreed to pay 16 65 billion in damages 45self dealing occurs when a fiduciary acts in their own best interest rather than in the best interest of their clients considered a conflict of interest this illegal activity can lead to litigation penalties and termination of employment for those who commit it self dealing includes front running when a broker enters into a trade with the foreknowledge of a non publicized transaction that will influence the price of the asset resulting in a financial gain for the broker it also occurs when a broker or analyst buys or sells shares for their account ahead of their firm s buy or sell recommendation to its clients insider trading occurs when individuals act upon or divulge to others information that is not yet public and is likely to affect share price and company valuations once it is known insider trading provides an unfair advantage for individuals to profit and does not matter how the material nonpublic information was received or if the person is employed by the company money launderingmoney laundering is accepting cash earned from illicit activities such as drug trafficking and making the cash appear as earnings from legal business activity criminals often filter money from crimes such as human and narcotics trafficking public corruption and terrorism in a three step process a cash based business such as a restaurant that is owned by a criminal organization is a common tool for laundering illegal money daily cash receipts may be inflated to funnel illegal cash through the restaurant and into the bank for distribution to the owners the anti money laundering act of 2020 assists financial institutions in their efforts to meet their obligations under laws and regulations designed to combat money laundering by targeting foreign and domestic terrorist financing transnational criminal organizations drug trafficking organization activity human trafficking and human smuggling and proliferation financing 67securities and commodities fraudthe perpetrator of a securities fraud can be an individual such as a stockbroker or an organization such as a brokerage firm corporation or investment bank and includes crimes such as 