What Are the Most Common White Collar Crimes?

White collar crimes are financially motivated crimes, typically not involving any threats of violence or the use of firearms. They are generally committed by white collar professionals, such as corporate executives, doctors, accountants, and lawyers, driven by the desire for financial gain. While many forms of white collar crimes exist, some are certainly more common than others, including:

Fraud

You know the answer to the question, ‘what are white collar crimes?’, but you may not know that the most common type of white collar crime is fraud. A number of types of fraud fit into this category, including securities fraud, insurance fraud, and credit card fraud.

Securities fraud involves lying to investors and insider trading. Most often, the goal is to manipulate financial markets or mislead investors for financial gain, such as by providing false information or hiding key facts. In insurance fraud, white collar criminals will deceive or misrepresent a claim made to an insurer to obtain a financial benefit that they’re not entitled to.

In most cases, credit card fraud involves the unauthorized use of a credit card or its details to make purchases, withdraw funds, or gain financial benefits. Thousands of fraud cases are reported to the United States Sentencing Commission each year, with 19.6% of them involving loss amounts greater than $1.5 million.

Embezzlement

Embezzlement is a white collar crime in which someone in a position of trust, such as an employee or fiduciary, fraudulently misappropriates money or property entrusted to them for personal gain.

Embezzlement isn’t the same as traditional theft because the assets are lawfully in their possession to start with, but they have violated the owner’s trust. There are many common types of embezzlement, such as:

• Skimming cash
• Payroll fraud
• Falsifying records
• Misusing expense accounts
• Check kiting

Tax Evasion

Tax evasion is when someone illegally avoids paying taxes by underreporting their income, inflating their deductions, or hiding money in offshore accounts. Perpetrators will need good criminal defense lawyers if they’re charged with this crime, as nearly 70% are sentenced to prison.

Money Laundering

Money laundering is the process of concealing the origins of money obtained through criminal activities, such as tax evasion, fraud, or drug trafficking. The goal is to make it appear as if it came from a legitimate source. The money laundering cycle typically consists of three steps:

1. Illicit cash enters the legitimate financial system through depositing small sums into bank accounts, purchasing physical assets, and buying foreign currency.
2. A complex series of financial transactions is used to disguise the money, such as wire transfers between multiple bank accounts, buying and selling high-value goods, and using shell companies.
3. The money reenters the economy ‘clean,’ where it appears legal. The criminal can now spend or invest the money as they wish, without raising suspicion.

Money laundering is so common that the United Nations Office on Drugs and Crime believes at least 2% to 5% of the global GDP is laundered every year, equating to $800 billion to $2 trillion USD.

White collar crimes may be common, but that doesn’t mean they’re easy to get away with. Even the most prolific white collar criminals receive fines and jail time for many of the crimes listed above.