Throughout the years, professionals, journalists, and even lawyers have struggled to find a uniform definition of “white-collar” crimes. You may be thinking to yourself... “is there blue-collar crime?” In a sense, that is a simplistic way of simplifying this broad term. Throughout the history of law, “white collar crime” can be defined or categorized as non-violent economic crime often involving the loss or gain of money. For example, activities including mortgage fraud, Ponzi schemes, political corruption, securities fraud, and corporate misconduct. We are going to talk about a few of these in this article.
FRAUD
Chapter 63 of Title 18 in the United States Code sets out a number of fraud offenses. There are numerous related crimes that differ primarily in either their use of the mail or use of wire transactions or their use of banks, health care, securities, and commodities. Although there are quite a few differences, each statute requires proof of a scheme or artifice to defraud.
Specifically, a scheme to defraud includes any false or fraudulent pretenses or representations intended to deceive others in order to obtain something of value, such as money, from the entity or object to be deceived.
Under the United States Sentencing Guidelines, an enhancement of each offender’s sentence is determined largely based on the loss attributable to the offense. Under the guidelines, loss may be calculated as the greater of the actual loss or intended loss. Actual loss is defined as the reasonably foreseeable pecuniary harm that resulted from the offense. Intended loss is the pecuniary harm that was intended to result from the offense, including that which would have been impossible or unlikely to occur.
PONZI SCHEMES
Traditionally, Ponzi scheme involved the business of borrowing money on promissory notes. Typically, Ponzi schemes can be defined as fraud involving investments that include the payment of returns to earlier investors from funds contributed by later investors. There are two types of Ponzi scheme investors, net winners and net losers. Net winners are those investors who receive a full return on their principal investment and amounts in excess of their total investment. These excess amounts are normally fictitious because all of the money must be turned over for the benefit of either the estate or its victims. Net losers are those who fail to receive a full return on their principal investment or, in most cases, receive no return at all. Ultimately, this leads to bankruptcy or the fall of a scheme.
POLITICAL CORRUPTION
Political corruption refers to the self-serving use of public power for private ends, including, without limitation, bribery, public decisions to serve private wealth made because of relationships, public decisions to serve executive power made because of relationships, and use by public officials of their positions of power to become wealthy.
Under 18 U.S.C 201 (Bribery of Public Officials and Witnesses), Section 201(b) criminalizes bribery, and Section 201(c) prohibits the payment or receipt of gratuities. In order to be convicted under this section, the government must prove that something of value was given, offered, or promised to a federal public official corruptly to influence an official act. Also, the government must show that a public official accepted, solicited, or agreed to accept anything of value corruptly in return for being influenced in the performance of any official act.
Lastly, the Hobbs Act, 18 U.S.C. Section 1951 targets public corruption by criminalizing extortion under color of official rights. For example, an official who has obtained a payment in exchange for the official to do certain acts.