White-collar crime typically refers to fraud-related acts committed by business executives and government officials, though they are also prevalent in organized crime operations. These crimes may include embezzlement, forgery, extortion and fraud. The FBI characterizes white-collar crimes “by deceit, concealment or violation of trust and are not dependent on the application or threat of physical force or violence.” However, these are not victimless crimes and can be extremely destructive to individuals and businesses. Each state handles these crimes differently. Here’s how different white-collar crimes are processed in the state of California.
Fraud is a broad term that can be associated with various crimes and schemes. The California Bureau of Investigation along with the White-Collar Investigation Teams specialize in investigating fraud based acts such as:
- Money laundering.
- Intellectual theft or piracy.
- Mortgage fraud.
- Identify theft.
- Corporate fraud (insider trading, falsification of financial information).
- Security and commodities fraud (pyramid schemes, Ponzi schemes).
- Fraud against the U.S. government.
Depending on the type, fraudulent schemes can violate civil or criminal law, and punishments will vary for each state depending on the circumstances. In California, criminal fraud can be punishable by up to three to five years in prison depending on the value of the fraud. Civil law is similar and usually results in high fines and possible jail time. In some cases, fraud cases can be taken out of state jurisdiction and onto the federal level.
Embezzlement, also known as financial fraud, is one of the most widely committed white-collar crimes. It involves the withholding or theft of assets by the person or company entrusted with them. Embezzlers will typically take assets from their clients or investors little by little to avoid detection. Unfortunately, victims of embezzlement usually do not realize their money is being taken out until a large portion of it is missing. Many embezzling schemes can go on for years without detection of missing funds. This became a nationwide problem during the 2008 financial crisis, as advisors embezzled millions of dollars from their investors leaving them without a lot of their assets.
Embezzlement is a statutory offense meaning that it can be a violation of state or federal law depending on the specific circumstances. In California, embezzlement becomes a felony if the stolen asset value is over $950 and is punishable by up to three years in prison. If the stolen property is less than $950, it is considered a misdemeanor and carries up to a six-month jail sentence.
Forgery is defined as the unlawful alteration or false production of a legal document or instrument in order to defraud an individual or company. Counterfeiting money and other currency is also a type of forgery. In the U.S., punishment for forgery is different for every state. In California, sentencing for forgery depends on the amount of loss caused by the crime. Forgery under $950 is considered a misdemeanor and usually results in no jail time. Forgery over $950 becomes a felony and is punishable by up to eight years in prison depending on the amount forged.
Extortion refers to obtaining benefits or payments through coercion and is a common practice in organized crime. Blackmail is the most common type of extortion. However, in the U.S. it can happen without threatening the extorted victim with physical violence or a weapon. The key point to extortion is a threat to the victim if they do not comply with demands. Extortion can be a state or federal crime depending on the circumstances. For example, a person committing extortion through the internet or interstate mail would be charged with a federal crime. In California, extortion is a felony offense and is punishable by two to four years in jail with fines ranging up to $10,000. In some cases, felony probation can be granted.
These are just some examples of white-collar crimes and how they are processed by the state of California. Every case is different and punishments will vary based on the specific circumstances. Even though many white-collar crimes have shorter prison sentences compared to violent crimes, they can still cause a lot of damage. According to the FBI, fraudulent schemes are more sophisticated now than ever before. Any white-collar crime can be devastating to an individual or company by wiping out their savings or investment earnings. Luckily, the California Bureau of Investigation and the White-Collar Investigation Teams work with various state and federal government agencies to keep fraudulent schemes at bay and protect their citizens from being scammed.
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