When most people think of crime, they think of murder, stealing, and sexual assault among other offenses. But white-collar crime is actually more common than violent crime. One-quarter of American households have fallen victim to a white-collar crime compared to a 1.1% prevalence rate of violent crime.
The term white-collar crime was coined in 1939 and usually covers any type of crime that is non-violent in nature and done for financial gain. Fraud, money laundering, and embezzlement all fall under white-collar crime. They are usually committed by business people and government officials, and a white-collar criminal may even be someone you know or work with.
Here are four of the most common white-collar crimes that may surprise you.
1. Identity Theft
Nearly 14.5 million Americans were victims of identity theft in 2018. Although this number dropped compared to the previous year, identity theft remains a problem especially with mobile phone account takeovers on the rise. Identity thieves may steal another person’s identity to obtain a loan, medical services, driver’s license, or to simply make purchases using a stolen credit card.
These crimes can devastate a person financially if they cannot receive compensation for the fraudulent charges. They can also damage an individual’s credit score and make it difficult to obtain a mortgage or other type of loan. You can reduce your risk of identity theft by monitoring your credit card accounts, changing online passwords often, and creating passwords that are tough for a thief to guess.
Extortion has been in the news a lot lately thanks to high-profile college cases involving celebrities such as Lori Loughlin and Felicity Huffman, who tried to coerce colleges into accepting their children as students in exchange for money. But extortion can involve anyone who tries to obtain a benefit by giving another person money or gifts. It’s hard for a perpetrator to get out of this kind of legal hot water, even if they have the best white collar criminal defense attorney.
Blackmail is also a form of extortion, even though it may involve the threat of physical harm or violence to force action from someone.
3. Bankruptcy Fraud
There are actually a few forms of bankruptcy fraud. It may be committed by a debtor who is trying to conceal assets so that they don’t have to declare bankruptcy. Or it may involve a petition mill scam where the criminal tries to pass themselves off as a financial advisor claiming to help renters or homeowners avoid eviction, foreclosure, or property repossession.
Although bankruptcy fraud carries a fine of up to $250,000 in the U.S., perpetrators of this type of crime are rarely caught and prosecuted.
4. Money Laundering
The process of trying to make “dirty” money (money that came from criminal activity) legitimate is known as money laundering. Although banks are required to report transactions that involve large sums of cash, a criminal may use all sorts of tricks to try to help the cash pass as clean. They may use “mules” to smuggle cash across borders and deposit them in a foreign bank account or spread several cash deposits over several accounts to make them look less suspicious.
Money laundering is so common that it would be the world’s fifth largest economy if it were legitimate.
Be Aware of These Common White-Collar Crimes
Knowing more about white-collar crimes such as these four common ones can help prevent you from becoming a victim of one.
To learn more about different types of crime and how to prevent yourself from falling victim to them, visit our Legal archives.