White Collar Crimes: Frequently Asked Questions

What are “white collar crimes”?

While the law does not technically recognize a category of crimes called “white collar crimes,” this is not to say that such a category does not exist. Some common features of “white collar crimes” include the use of deception or abuse of a position of trust, and the lack of physical violence in committing the crime.

The same law, depending on how it is violated, may or may not be a “white collar crime.”  For example, a dealer selling cocaine on a street corner and a physician prescribing painkillers to patients who want to get high are both violating the same federal law—21 U.S.C. § 841.  However, only the second example is a “white collar crime,” because it was committed by the physician through the abuse of a position of trust—namely, his status as a healthcare provider.

Practical differences also figure into the categorization of some crimes as “white collar.”  For example, the investigation, prosecution, and the defense of white collar criminal cases are different in important ways from that of “street crimes.” It is also easier for a defendant charged with a white collar crime to obtain pretrial release than a comparable defendant charged with a violent crime, because of differences in the nature of the crime and—usually—the backgrounds of the defendants. Finally, white collar crimes tend to be prosecuted by more senior attorneys in a prosecutor’s office, because these cases typically involve more complex and challenging issues. Therefore, the defense attorney needs to be more prepared and skilled as well.

If you have been charged with a white collar crime, the most important consideration for you should be whether your attorney has the expertise, commitment, and time to represent you effectively. Many of the same considerations we laid in our article “Finding the Best Attorney in a Federal Criminal Case” are also applicable here.

What are some examples of white collar crimes?

White collar crimes tend to cover a broad range of conduct. No two schemes are exactly alike. Below are just a few examples:

  • Fraud – A home buyer lies about his employment income on a mortgage application and gets a loan. In this case he has committed fraud.
  • Bribery and kickbacks – A company pays a government official to secure a contract; it has engaged in bribery. If the company, instead of paying the official, agrees to send a percentage of its profits on the contract to the official, it has engaged in kickback.
  • False statements – An individual who is interviewed by federal law enforcement agents intentionally makes a false statement to distance himself from the investigation. He has committed the crime of making false statements.

To see other examples of white collar crimes, please see our White Collar Crimes practice page.

What is the relationship between white collar crimes and federal courts?    

The vast majority of white collar crimes involve acts that violate both federal and state law, and thus can be prosecuted in federal or state court.  However, because federal agents and prosecutors have more resources and are usually better trained than their state counterparts, the more serious white collar crimes tend to be prosecuted in federal court.  This is the reason why many of the high-profile white collar prosecutions that appear in the news such as the prosecutions of Martha Stewart and Bernie Madoff, happen in federal court.

Can a person go to prison for committing a white collar crime? 

A few decades ago, white collar crimes were commonly punished with only a fine and probation.  That is no longer the case.  Today, white collar crimes are punished just like any other crime, and carry the potential for significant prison terms and fines.  Indeed, in some cases—such as when there is a large dollar figure involved—white collar criminal defendants can be punished just as harshly as defendants convicted of extremely serious violent crimes such as murder and rape.

What kinds of financial penalties are involved in a white collar criminal case?

In federal criminal cases, there are three types of financial penalties:

  • Criminal fine – A penalty with a maximum set by statute. For example, the fine for wire fraud is up to $1 million. In practice, courts will rarely impose the maximum fine.
  • Restitution – A penalty that is intended to “make the victim whole.” Restitution is calculated according to the victim’s loss, and is mandatory in the vast majority of cases.
  • Forfeiture – A penalty that is intended to prevent the defendant from “self-enrichment.” Forfeiture includes any financial gains by the defendant as a result of the crime, as well as any significant assets that were used in the course of committing the crime.

For ordinary street crimes, the financial penalties are usually not major considerations, and the client’s biggest concern is with the possibility of incarceration. In white collar criminal cases, however, restitution and forfeiture are important considerations.  A large forfeiture or restitution order can potentially ruin a defendant’s life, even if the defendant receives only a probationary sentence.  The government will commonly ask for the largest forfeiture and restitution orders that can be reasonably argued for.  However, a skilled white collar attorney can frequently find ways to reduce the amount of forfeiture and restitution owed.  Moreover, it is also not uncommon in white collar criminal cases for the defendant and the government to agree on a forfeiture and restitution amount in a plea agreement.

Do I need an attorney in a white collar criminal case? 

Sometimes, when our clients are under investigation, they have the idea that if they go speak to an agent or the prosecutor without an attorney, they can persuade the agent or prosecutor that they are innocent.  Other times, they are worried that if they hire an attorney, it will make them look “guilty.” They think that if they have nothing to hide, they should not hire an attorney. Nothing could be further from the truth.

Prosecutors and law enforcement agents, especially those in the federal criminal system, understand that it is perfectly normal for an individual to want to speak to an attorney when the individual has been notified that he or she is under investigation. Furthermore, we have not ever seen or heard of a case where the prosecutor has held it against the client for hiring an attorney.

When should I hire an attorney in a white collar criminal case?

As early as possible.

Hiring an attorney early on in the criminal process is helpful, especially if it is before any formal charges have been brought.  This is a particular important period, because prosecutors may not have made up their minds yet about a person’s guilt, and a skilled attorney may be able to persuade the prosecutor to not bring any charges, or bring less serious charges.