Reportedly coined in 1939, the term white-collar crime is now synonymous with the full range of frauds committed by business and government professionals. These crimes are characterized by deceit, concealment, or violation of trust and are not dependent on the application or threat of physical force or violence. The motivation behind these crimes is financial—to obtain or avoid losing money, property, or services or to secure a personal or business advantage.
These are not victimless crimes. A single scam can destroy a company, devastate families by wiping out their life savings, or cost investors billions of dollars (or even all three). Today’s fraud schemes are more sophisticated than ever, and the FBI is dedicated to using its skills to track down the culprits and stop scams before they start.
The FBI’s white-collar crime work integrates the analysis of intelligence with its investigations of criminal activities such as public corruption, money laundering, corporate fraud, securities and commodities fraud, mortgage fraud, financial institution fraud, bank fraud and embezzlement, fraud against the government, election law violations, mass marketing fraud, and health care fraud. The FBI generally focuses on complex investigations—often with a nexus to organized crime activities—that are international, national, or regional in scope and where the FBI can bring to bear unique expertise or capabilities that increase the likelihood of successful investigations.
FBI special agents work closely with partner law enforcement and regulatory agencies such as the Securities and Exchange Commission, the Internal Revenue Service, the U.S. Postal Inspection Service, the Commodity Futures Trading Commission, and the Treasury Department’s Financial Crimes Enforcement Network, among others, targeting sophisticated, multi-layered fraud cases that harm the economy.
Major Threats & Programs
Corporate Fraud
Corporate fraud continues to be one of the FBI’s highest criminal priorities—in addition to causing significant financial losses to investors, corporate fraud has the potential to cause immeasurable damage to the U.S. economy and investor confidence. As the lead agency investigating corporate fraud, the Bureau focuses its efforts on cases that involve accounting schemes, self-dealing by corporate executives, and obstruction of justice.
The majority of corporate fraud cases pursued by the FBI involve accounting schemes designed to deceive investors, auditors, and analysts about the true financial condition of a corporation or business entity. Through the manipulation of financial data, the share price, or other valuation measurements of a corporation, financial performance may remain artificially inflated based on fictitious performance indicators provided to the investing public.
The FBI’s corporate fraud investigations primarily focus on the following activities:
Falsification of financial information
- False accounting entries and/or misrepresentations of financial condition;
- Fraudulent trades designed to inflate profits or hide losses; and
- Illicit transactions designed to evade regulatory oversight.
Self-dealing by corporate insiders
- Insider trading (trading based on material, non-public information);
Kickbacks; - Misuse of corporate property for personal gain; and
- Individual tax violations related to self-dealing.
Fraud in connection with an otherwise legitimately operated mutual hedge fund
- Late trading;
- Certain market timing schemes; and
- Falsification of net asset values.
The term “white collar crime” has sprung up in recent years and now pervades our media. Many of us have an abstract understanding of what white collar crimes entail. We may have vague notions of rich Wall Street investors sitting in their lofty high-rise offices, collecting money through duplicitous means. But what are white collar crimes actually, and how do they differ from corporate crimes?
White collar crime
White collar crimes are non-violent, financial crimes. When an individual uses deceptive means to achieve personal financial gain, this is considered a white collar crime. Common examples of white collar crimes are embezzlement, money laundering and fraud.
For example, a person claiming to represent a prominent bank sends out phishing emails designed to trick recipients into divulging their personal bank account details. This is a type of fraud. Since the individual is committing this crime for their own financial benefit, it is considered a white collar crime.
Corporate crime
Corporate crimes may be similar to white collar crimes in many respects. They can also include the types of crimes listed above. One main difference, however, is that with corporate crimes, the person (or people) committing the crimes are working on behalf of the company they work for. Their goal is to financially benefit the company or its shareholders. It is worth noting that to be considered a corporate crime, the company in question does not need to be aware of—or condone—such criminal activity.