White Collar Crimes

History of White Collar Crimes

White-collar crimes such as embezzlement and bribery outdate modern history, since they have been in existence for a long time. However, the first recorded case of a law regulating white-collar crimes was in 1473 in the U.K.

In the past, individuals committing white-collar crimes did not receive much attention. However, this changed upon the onset of the industrial revolution. During the industrial revolution, some monopolistic companies developed policies to squelch their competitors, and this led to highly-priced, low-quality goods. The public was outraged for paying high prices for cheap items just because of corporate greed. This led to various laws that talk about white-collar crimes. For instance, in the United States in 1890, Congress enacted the Sherman Antitrust Act. 

In the early 1990s, some journalists strayed from reporting regular news to talk about incidences of corruption in both the private and public sectors. These journalists were fondly referred to as the muckrakers, and they highlighted cases of medical insurance fraud, insider trading, and bribery, among others. These journalists incensed the public, and there was a clamor for more laws criminalizing such acts.

Edwin Hardin Sutherland coined the term 'white-collar crime' in 1939. He was a famous author on this subject, and he perpetuated the view that the elite class primarily committed these crimes. Sutherland's work inspired many states in the U.S. to enact strict laws regulating white-collar crimes, including the state of California.

How are White Collar Crimes Investigated?

Both federal and state agencies have the power to investigate white-collar crimes. In the state of California, white-collar crimes are investigated by the FBI and the Department of Justice. Under the Department of Justice, there is the Bureau of Investigation, which has specialized White Collar Investigation Teams. These teams investigate all types of white-collar crimes, and they majorly concentrate on complex cases that are linked to organized crime and criminal networks. They target multi-layered and sophisticated cases of fraud.

White-collar criminal investigations can stretch for a couple of months or even years. Sometimes, you may be unaware that you are the subject of a white-collar crime investigation until the prosecutor files formal charges against you. 

Immediately you suspect that a federal or state agency is involving you in an investigation; you should reach out to a white-collar criminal defense attorney. At the early investigation stage, you may find it difficult to know whether or not you are a suspect. Make sure you consult with an attorney before meeting any law enforcement officer, even if you believe that you are being interrogated as a potential witness.

Types of White Collar Crimes

The types of white-collar crimes include:

• Environmental law violations
• Fraud
• Intellectual property theft
• Tax evasion
• Organized crimes with no violent elements
• Antitrust violations
• Trade secrets theft
• Embezzlement
• Insider trading
• Money laundering
• Welfare fraud
• Bribery
• Securities fraud
• Counterfeiting
• Medical insurance fraud
• Public corruption
• Extortion
• Bank fraud
• Credit card fraud
• Cell phone fraud

Here is a detailed analysis of the most common types of white-collar crimes in the state of California:

1. Fraud

Fraud is the use of deception to obtain an unfair or unlawful gain. According to California Penal Code 470 – 483.50, an individual can be charged with fraud if it is found out that he secured or intended to acquire goods, money, or services at an extremely reduced price, or sell them at exorbitant prices; or if he obtained a document or license by issuing false information.

Penal Codes 470 – 483.50 highlight that the offense of fraud encompasses mortgage fraud, tax fraud, check fraud, banking fraud, insurance fraud, mail fraud, and fraudulent activities against aged individuals. The offense of fraud is a wobbler, and the prosecution may charge it as either a felony or a misdemeanor.

Fraud convicts may face severe punishments, including revocation of professional licenses, payment of hefty fines, significant jail term, and seizure of personal assets. Fraud convicts who are also undocumented immigrants may be subjected to forceful deportation or detention.

Furthermore, fraud is considered as an offense involving moral turpitude. This means that a conviction of fraud may prevent you from accessing job opportunities in the future, as well as securing a place to live. A prior fraud conviction can negatively impact your social life and that of your loved ones because most people will view you as a dishonest and untrustworthy person.

For you to be convicted of fraud, the prosecution must show that you had a specific intent to defraud another person. If you had no such intent, you would be acquitted. Your defense attorney can use various methods to demonstrate that you had no intent to defraud. For instance, he/she can assert that you desired to return the fraudulently obtained money or goods to its rightful owner.

2. Embezzlement

According to California Penal Code 503, embezzlement is the act of taking an item that is entrusted to you and belongs to another person. For the court to convict you of embezzlement, the prosecution must show that some property was entrusted in your care, and you possessed it temporarily. Some examples of individuals who are prone to embezzlement charges include employees in the public and private sectors, trustees, organization principals, and board members.

Most individuals who have been charged with embezzlement argue that they had an intention to return the property or money. This defense may not suffice, even if it is true, especially if you do not have an attorney to help you.

You might be charged under California's grand theft embezzlement laws if you embezzled money or goods whose worth exceeds $950, automobiles, or guns. Grand theft embezzlement is a wobbler, and the prosecutor may charge it as a felony or misdemeanor depending on his discretion. The penalty for misdemeanor grand theft embezzlement is a jail term of a maximum of one year, while that for felony grand theft embezzlement is a three-year jail term.

On the other hand, the prosecution will charge you of petty theft embezzlement if you embezzled items or money whose total value is below $950; and the items do not include automobiles or firearms. The punishment for petty theft embezzlement is a jail term of a maximum of six months and fines that should not exceed $1000.

A conviction of embezzlement can wreak havoc in your personal and professional life. For instance, no person may be willing to give you a job.

3. Identity Theft

The offense of identity theft is well-illustrated in California Penal Code 530.5. There are many cases of identity theft in California. In 2014, the Federal Trade Commission recorded over 330,000 identity theft complaints; and most of them were reported to have occurred in the state of California.

According to Penal Code 530.5, an individual will be held to have committed the offense of identity theft if he uses the information of another person to engage in fraudulent activities. For instance, a person may sign up for a credit card in someone else's name; and use it to make purchases or gain access to bank accounts or personal information of that person. The elderly and children are the most targeted victims of identity theft in California.

The offense of identity theft is a wobbler, and it can be charged as a misdemeanor or a felony. The penalty for felony identity theft is a state prison term of a maximum of three years or fines that may be up to $10,000. A misdemeanor identity theft conviction may make you serve a county jail term of up to one year or pay fines whose total value should not exceed $1,000.

4. Forgery

You will be charged with the offense of forgery if you design fake business documents or government-issued documents. Also, you will have to answer forgery charges if you create counterfeit U.S. currency, file a false claim with your insurer to obtain money, or even if you write another person's will without receiving proper authorization.

For the court to convict you of forgery, the prosecution must prove three crucial elements. These elements include having a specific intent to defraud, using writing that is specifically listed in the forgery statutes, and falsely making or altering this writing.

The prosecution department of California considers the offense of forgery as a wobbler, and they can charge it as either a misdemeanor or a felony. According to California Penal Code 473, a person may be charged with the offense of misdemeanor forgery if the property in question has a worth of below $950. The maximum punishment for misdemeanor forgery is a county jail term of one year, community service participation, or $1,000 fine.

The prosecutor might charge you of felony forgery if you had dealt with an item whose value exceeds $950. Convicts of felony forgery may receive a state prison sentence of a maximum of three years, hefty fines that may be up to $10,000, and a court order to participate in community service for a specified period.

Sometimes, you may unknowingly write hot checks, pass false financial documents, or sign for another person in a legal document. These acts can make you face forgery charges, no matter how innocent your intentions were.

If your charge involves writing bad checks, your defense attorney can negotiate for you a bad check diversion program in lieu of jail term. When you opt for the former option, you will have to restitute the victim and take a financial skills class. Once you complete the bad check diversion program, your attorney can assist you to erase the conviction from your record.

5. Insider Trading

The Securities and Exchange Commission (SEC) criminalizes insider trading. According to SEC Rule 10(b) (5), it is unlawful for an individual to sell or purchase security based on information that is not privy to the public.

For the court to hold you guilty of insider trading, the prosecution must show that you sold or purchased security, you possessed private information that was material, and the public was not aware of this information. The offense of insider trading has the most severe penalties. Insider trading convicts may face both criminal and civil penalties. For instance, they may pay fines of up to $5million, or serve a state prison sentence of a maximum of 20 years. Additionally, the value of the fine that the court will order you to pay may be up to three times the total amount of losses avoided or profits gained from the illegal trade.

Sentencing Enhancements for White Collar Crimes

The state of California has an aggravated white-collar crime enhancement law, and it is enlisted in Penal Code 186.11. This law permits a judge to add 2 – 5 additional years in prison if there are some aggravating circumstances in your case.

These aggravating circumstances include having prior white-collar crime convictions on your record, or if the offense involved items whose worth exceeds $100,000. Note that the amount of property or money the victim lost will determine the length of your time in state prison upon conviction. For example, if the victim incurred losses that exceed $100,000 but less than $500,000; the judge will add an extra one or two years to your state prison sentence. If the victim lost goods or money whose value exceeds $500,000, you might face an additional 3-5 years in state prison.

The Criminal Trial Process of White Collar Crimes

Typically, a white-collar charge is treated the same way as any other criminal offense. You can be charged with more than white-collar offense, depending on the government's evidence against you.

As asserted earlier, the investigation process of white-collar crimes usually takes an extended period. Therefore, you must consult a white-collar criminal defense attorney before the prosecution launches its case. An attorney's early intervention may cause no charges to be filed against you, or the prosecutor will reduce your charges should he decide to file your case.

After the conclusion of the investigation, the law enforcement officers will request an arrest warrant from a judge. The judge will issue the warrant to the police if he believes that the evidence against you is substantial, or you may have possibly committed or involved in the commission of the crime.

When the police receive the warrant, they will put you under arrest. You will have to remain in police custody until you post bail. The bail amounts for white-collar crimes are usually exorbitant. As illustrated by California’s Penal Code 1275, the prosecutor has powers to investigate the source of the money you intend to use to post bail. This is to ensure that you do not get back your freedom with the help of unlawfully obtained funds.

After you have been released on bail terms, the court will schedule a date for arraignment – the first hearing of your case. During the arraignment, the judge will inform you of the charges filed against you; and ask you to take a plea.

If you take a plea of not guilty, the court will set a date for a preliminary hearing or early disposition. If you have been charged with a misdemeanor, your case will be set for pre-trial instead of the preliminary hearing.

The date of the preliminary hearing must be within ten days from the day when you were arraigned in court. In the preliminary hearing, the judge will evaluate your case, and if he holds you answerable to any of your charges, he will set a date for a felony arraignment. At the felony arraignment, the court will again inform you of your charges and ask you to retake a plea.

After the felony arraignment, your case will proceed to the pre-trial conference stage. Here, the judge, the prosecutor, and your attorney will discuss your case. Most plea negotiations occur at this stage. If your case is not resolved at the pre-trial conference, it will move to the final step – trial. During the trial, the jury will listen to the evidence presented by both sides; then issue their verdict.

Find a Los Angeles Criminal Defense Attorney Near Me

If the Prosecution Department of California charges you with a white-collar crime in Los Angeles, you should retain an attorney who has extensive experience in defending such cases. At Leah Legal, we understand the serious nature of white-collar cases, and we know the best way to help you solve your case. Call us today at 818-484-1100 for a free consultation.