14 Types of White-Collar Crime (With Real Life Examples!)

White-collar crimes are nonviolent financial crimes conducted by middle- and upper-class professionals working in white-collar jobs.

Most white-collar felons are married and well-educated men. This is a non-violent type of crime, strictly committed for financial gain.

Despite the huge financial implications of white-collar crime, they account for just 3% of federal prosecutions every year.

Types of White-Collar Crime

1. Wage Theft

Based on a report of over 75 million American workers, 26% of them have experienced wage theft in the last year. This crime occurs when the employer refuses to pay wages or employee benefits that rightfully belong to their employee.

Real-Life Example of Wage Theft: Back in 2018, the Cheesecake Factory Case hit the headlines as a typical example of wage theft. They were held liable in a $4.57 million wage theft case for underpaying 559 janitorial workers.

Both the janitorial contractor and the Cheesecake Factory owed $3.94 million to their employees in overtime work, back wages, and penalties. To top it all off, both companies had to cover civil penalties, which cost them $632,750.

2. Ponzi Scheme

A Ponzi scheme is a type of fraud that creates a perfect environment to lure investors. It pays profits to earlier investors with cash from a recent investor. In other words, the money paid to Ponzi investors, known as income, is, in fact, capital distribution.

This is an unsustainable business practice that relies on constantly bringing on new investors to cover debts to current investors.

In 2020, Ponzi schemes hit the highest levels in a decade. Authorities unraveled 60 alleged Ponzi schemes with $3.25 billion worth in investor funds. This is the biggest amount recorded since the Great Recession.

Real-Life Example of a Ponzi Scheme: Lou Pearlman, the man behind the Backstreet Boys and NSYNC, is known for creating one of the most notorious Ponzi schemes. He swindled the banks and investors out of over $300 million.

The man was also sued for stealing money by the bands he created. He was later convicted of money laundering and conspiracy, which landed him a 25-year prison sentence. Pearlman died a couple of years later in 2016, at 62 years of age.

3. Fraud

Fraud is the crime of using trickery or deception for financial gain. Most frauds are all about money, whether the perpetrator has indirect or direct gain. Fraudsters use websites, e-mails, or often phone calls to trick their victims.

Real-Life Example of Fraud: Despite living an extravagant and quite public lifestyle, Al Capone never filed a federal income tax return. Instead, he claimed to have zero taxable income. He eventually pled guilty to prohibition and tax evasion charges in 1931.

This landed him 11 years behind bars and a $50,000 fine. This was considered the roughest sentence was given for tax fraud to that point.

4. Bribery

Bribery is a criminal act that offers a person product or cash in order to get them to do something in return. The object of bribery is something of value and meant to influence a person’s behavior, like bribing a customs official to transport prohibited goods.

Real-Life Example of Bribery: Troika Laundromat were 70 shell companies designed to launder huge amounts of money. They moved billions of dollars from Russia to the West while bribing officials to get the job done.

5. Insider Trading

Insider trading is malpractice where people trade company secrets or securities which they are not allowed to make public. Because these people already work in the company, they have gained otherwise non-public strategic information that is highly important for making investment decisions. In other words, they used their insider knowledge to cheat!

Real-Life Example of Insider Trading: An American stock trader, Ivan Boesky, became famous for taking part in an insider scandal in the 80s. Together with multiple corporate officers, Boesky obtained key information on upcoming corporate takeovers. He used this opportunity to make vast amounts of cash. After getting caught, Boesky became an informant and later received a $100 million fine and a 3.5-year prison sentence.

6. Embezzlement

Embezzlement means misappropriating or stealing assets/funds that belong to a government or company. 85% of embezzlement cases are done by a manager of a company whereas one-fifth of cases are carried out by a C-level executive.

Real-Life Example of Embezzlement: One of the most notorious cases of embezzlement features the first National Bank of Chicago. In 1998, the FBI charged 4 bank employees with almost making off with $70 million. They planned on sending the cash to an untraceable “dummy” account in Australia. But, they were quickly stopped in their tracks when Merill Lynch spotted $20 million missing from their account.

7. Racketeering

Racketeering means taking part in an illegal scheme. It could be obtaining a company via illegal activities, using a company to do illegal acts, or operating a company with illegally procured income.

Real-Life Example of Racketeering: Michael Robert Milken, known for his billion-dollar empire, pleaded guilty to 98 counts of racketeering and fraud. He was charged with violating U.S. securities laws, landing him a 10-year prison sentence and a $600 million fine. Because of the incident, Milken was barred for good from the securities industry. 

8. Cybercrime

Cybercrime incorporates a wide range of crimes involving a computer network and the use of a computer. Some examples include identity theft, privacy violation, stealing intellectual property online, and hacking into a computer network.

Real-Life Example of Cybercrime: Kevin David Mitnick started hacking when he was just 12 years. He first used his skills to get free bus rides. By the time he turned 16, he had pulled off a $1 million software theft, ending up with a 1-year prison sentence. He then hacked into Pacific Bell’s voicemail and got a 5-year sentence after running for 2 years.

9. Copyright Infringement

Copyright infringement happens when a copyrighted work is publicly displayed, distributed, or reproduced without asking for the owner’s permission. This is a violation of intellectual or economic rights, which are granted to the owner of the copyrighted piece.

Real-Life Example of Copyright Infringement: One of the most well-known alleged copyright infringement examples is the Target corporation versus Modern Dog Design. Modern Dog used a number of dog sketches to illustrate a T-shirt design. The same design was also allegedly produced by Disney/Target. Although the lawsuit is still ongoing, Modern Dog Design is bent on defending its design.

10. Money Laundering

Money laundering involves filtering dirty money through various institutions to hide its origins. This can make the money ‘clean’ because its origins are untraceable. However, in reality, the funding comes from illegal sources. Often, money is laundered through casinos or fake businesses.

Real-Life Example of Money Laundering: The BCCI scandal is a typical example of money laundering. This seventh biggest private bank on the globe was found to be involved in criminal activities. These activities led to huge amounts of money laundering in the mid-80s. Billions in profits, all from drug money, went through their accounts. There is also an allegation that the CIA used BCCI accounts to transfer funds to Afghan Mujahideen in the war in the 1980s.

11. Identity Theft

Identity theft happens when a person uses another person’s ID, credit card, or name to commit fraud or other crimes. This is a highly prevalent problem in the United States. Around 1 in 15 people have been victims of identity fraud.

Real-Life Example of Identity Theft: Anthony Lemar Taylor stole Tiger Woods’ social security number. He then used it to obtain the pro golfer’s driving license and credit cards. Taylor was found guilty and got a 200-year-to-life sentence mainly because he had prior charges.

12. Art Forgery

Forged artwork is a crime that involves the creation and selling of art that doesn’t belong to the credited owner. Art forgery is such a common occurrence that experts estimate 50% of all work on the market is fake.

Real-Life Example of Art Forgery: John Myatt is the person who people called Picasso in prison. He is the man behind the largest art fraud case of the 20th century. He faked a ton of artwork done by artists like Henri Matisse and Marc Chagali. Myatt fooled experts and collectors and auctioned his pieces for a fortune.

13. Wine Fraud

Any false claims about the quality or pedigree of wine is called wine fraud. An example is counterfeiting a cheaper and inferior wine and passing it off as a more expensive brand to make more money from it.

Real-Life Example of Wine Fraud: Rudy Kurniawan made a fortune in the rare wines business. The problem is, he bottled the wine himself. The wine was cheap, but the money kept pouring in. In 2014 he was charged with a 10-year prison sentence for wine fraud.

14. Match Fixing

In organized sports, fixing matches involves determining the outcome of a match to get the desired result. This is often committed by violating the rules, blackmail, or any other way to obtain monetary gain. Usually a referee or player needs to be a participant in the match fixing scheme.

Real-Life Example of Match Fixing: Soccer is without a doubt famous for its match-fixing scandals. One such scandal involved Juventus being accused of rigging games. They allegedly choose their preferred referees.

FAQ

What are The Three characteristics of white-collar crime?

White-collar crime is present in all types of occupations, professions, industries, and companies. It varies based on styles and forms. But, they also have their own characteristics. These three characteristics are very important.

  1. The first characteristic is that the person who commits the white-collar crime has legitimate access to their victim/target since they are already employed in that company or firm.
  2. The second is that the offender is separated from their target.
  3. The third is that the actions of the offender create a superficial appearance of legality.

What is the difference between white-collar and blue-collar crime?

Here’s the difference:

  • Blue-collar crimes are crimes fuelled by emotions and passion. They are calculated and are meant to injure or damage property or people.
  • White-collar crimes are predominantly non-violent and are often called “paper crimes.” They include embezzlement, forgery, fraud, etc.

Another main noticeable difference between white and blue-collar crimes is social status (which is where the types of crimes got their names).

Blue-collar crimes are often committed by individuals who live in poverty-stricken areas.  White-collar crimes, on the other hand, are often done by someone in the higher social class and are well-paid.

Of course, that doesn’t always have to be the case. Someone from a higher social status can still commit a hit and run, for example.

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Conclusion

White-collar crime encompasses the use of criminal activity to get monetary gain. Often happening among the upper societal class, this crime can be difficult to detect. But, it is still punishable with adequate prison time and fines. The examples here can give you a general perspective of the most common white-collar cases.

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