Autor: Shelby Benavidez 

Abogado colaborador: Sean Szlachtowski, Attorney 

We hear about white-collar crimes all the time on the news, in headlines, and sometimes even in our own workplaces. But what does that actually mean? While it might sound like it’s reserved for executives in suits or complicated financial schemes, there’s more to it than meets the eye. In this article, we’ll break down what qualifies as a white-collar crime, how these cases are investigated, common defense tactics, and what legal rights victims have. 

What is White-Collar Crime? Definition & Examples 

White-collar crimes are financially motivated, non-violent crimes typically committed by individuals, businesses, or government officials. The term was first coined in the late 1930s by sociologist Edwin Sutherland, emphasizing crimes committed by people of high social status while on the job. 

Fraud is one of the most common white-collar offenses because it comes in many shapes and sizes. This includes embezzlement, financial fraud where someone steals or takes advantage of money or items belonging to their employer. Another common form is tax fraud or tax evasion, when someone intentionally lies about their income to pay less taxes, or just fails to pay their taxes altogether. Other forms of fraud include securities fraud, insurance fraud, mortgage fraud, and credit card fraud.  

Additionally, insider trading is another common offense of white-collar crime. Insider trading is when someone buys or sells a company’s stock using private information that hasn’t gone public about that company to gain an unfair advantage. For example, let’s say you work for a company and find out that it’s about to announce a big merger. If you buy stock before the news goes public and the stock price rises, it’s illegal because it’s unfair to other investors who don’t have access to the same information. Not all insider trading is illegal, though. Company insiders like executives can buy and sell stock, but they have to follow strict rules and report their trades to regulatory agencies like the SEC. 

Other white-collar offenses include bribery and corruption, offering or receiving something of value to influence the actions of a public official or business decision, and money laundering, concealing the origins of illegally obtained money, usually by passing it through complex banking transfers or legitimate businesses. 

Common Punishments 

The criminal justice system has really cracked down on white-collar offenses, especially when large-scale fraud or public trust is involved. 

If you are convicted of a white-collar crime, you’re probably going to get some hefty fines to compensate victims and make an example out of you. In many cases, courts order restitution, which means you’d have to repay the money you stole or misused. Aside from financial consequences, it’s not uncommon for white-collar offenders to end up in prison. Prison sentences can range from several months to decades, especially if there was extensive financial damage.  

Some offenders might receive probation instead of jail time but must comply with strict court-imposed rules. Additionally, the government can – and probably will – seize any assets that were obtained through illegal activities, a process known as asset forfeiture. 

The Role of Technology in White-Collar Crime 

Oh, technology – a blessing and a curse. Ironically, technology has played a role in enabling and combating white collar crime. On one hand, cybercrime like phishing scams, identity theft, and ransomware attacks, has expanded the category of white-collar offenses and increased the number of potential victims. On the other hand, digital forensics and data analytics have become essential for catching white-collar offenders. 

Investigating and Defending White-Collar Crimes 

How Are White-Collar Crimes Investigated by Police & Federal Agencies? 

Law enforcement agencies do investigate white collar crimes, but they are typically more complex and time-consuming than traditional criminal cases. While local police departments may handle smaller-scale white collar cases, larger or more sophisticated investigations are typically conducted by federal agencies. These include the Federal Bureau of Investigation (FBI), the Internal Revenue Service Criminal Investigation Division (IRS-CI), el Securities and Exchange Commission (SEC), and the Department of Justice (DOJ). 

Investigations into white-collar crimes require gathering and analyzing large amounts of financial records, interviewing witnesses, and tracing the flow of money. Forensic accountants and financial analysts are frequently brought in to interpret the data. Building a strong case can take years, especially when the crime involves multiple parties or international financial transactions. 

White-Collar Defense Litigation 

If you’re accused of a white-collar crime, you’re absolutely going to want to hire a lawyer right away. White-collar defense litigation is a specialized field that requires attorneys with a deep understanding of finance, business operations, and federal statutes. 

A white-collar defense attorney serves multiple roles during the litigation process. They advise clients from the moment an investigation begins, ensuring that their rights are protected during interrogations and document requests. Attorneys also help clients respond to subpoenas or grand jury proceedings. In some cases, they negotiate with prosecutors to reduce charges or reach plea agreements. If the case goes to trial, the attorney builds and presents a comprehensive defense strategy. In high-profile matters, defense lawyers may also manage media relations and help safeguard the client’s reputation. 

Since many white-collar crimes are prosecuted at the federal level, attorneys should be well-versed in federal rules of evidence and sentencing guidelines, which differ from state laws. 

Common Defenses for White-Collar Crimes 

There are several legal defenses that can be employed in white collar crime cases, depending on the specific circumstances. One of the most common is a lack of intent. Prosecutors have to prove that the accused knowingly and willfully committed the crime. If the act was the result of a misunderstanding or unintentional error, this could serve as a valid defense. 

Another defense is entrapment, which occurs when law enforcement induces someone to commit a crime they would not have otherwise committed. Duress may also be raised if the accused acted under the threat of harm or coercion. In some cases, the defense can argue that the evidence against the accused is insufficient or flawed, leading to a dismissal or reduction of charges. Additionally, if too much time has passed since the alleged crime occurred, the statute of limitations may prevent prosecution. 

Each of these defenses must be carefully tailored to the facts of the case and often rely on detailed financial analysis and expert testimony. 

Who Are the Victims in White-Collar Crimes? 

White-collar crimes can hurt many different people, not just those directly involved. Investors can lose their savings in scams. Employees might lose their jobs or retirement money if their company breaks the law. Consumers can be tricked by false advertising, overcharged bills, or unsafe products. When public money or taxes are misused, it’s the taxpayers who end up paying. Even small businesses can be scammed by fake bills, bounced checks, or dishonest partners. 

Many victims don’t even know they’ve been affected until long after the crime has happened, especially when the wrongdoing is hidden well. 

Your Rights as a Victim in Texas 

In Texas, victims of white-collar crimes have specific rights under the Crime Victims’ Rights statute. These rights include being informed about the progress of legal proceedings and being notified of key developments such as plea agreements or sentencing. Victims have the right to seek restitution, which is a court-ordered payment made by the offender to compensate for financial losses. 

Victims also have the right to submit victim impact statements during sentencing, allowing them to express how the crime affected their lives. If safety is a concern, victims may request protection measures against threats or retaliation. Additionally, victims in Texas can seek financial assistance through the state’s Crime Victims’ Compensation Program, which can help cover certain crime-related expenses, although eligibility requirements apply. 

For many victims, the most direct route to recovering losses is through civil litigation. While criminal proceedings aim to punish the offender, a civil lawsuit focuses on obtaining financial compensation for the victim. 

Contact a Civil Attorney 

If you’ve been financially harmed by a white-collar crime such as fraud or embezzlement, consulting a civil attorney, especially one experienced in financial misconduct cases, can help you understand your legal options. Unlike criminal prosecutors, who work on behalf of the state, civil attorneys represent your personal interests and aim to recover damages directly for you. 

An attorney can investigate the facts of your case, gather evidence, and determine who may be legally responsible for your losses. They can file claims or lawsuits, negotiate settlements, or take the case to court if necessary. Because statutes of limitation apply to civil claims, it’s crucial to act quickly. Many law firms offer free consultations and work on a contingency fee basis, meaning they only collect fees if you win your case.