The FBI’s crime-fighting occurs in various areas, including investigating serious crimes involving harm to the life and health of people, cybercrime, and white-collar crimes. The latter can be of several types, depending on the object of the crime and criminal schemes, but they all are aimed at making a profit. Punishments for white-collar crimes are usually less severe than for serious crimes, but this does not diminish their importance and the harm they bring to society. White-collar crimes cost the state billions of dollars annually, and their consequences are sometimes irreversible. Economic espionage and theft of patented products represent the greatest threat to human life, health, and national security and are, therefore, the most important to the FBI. This paper discusses two types of white-collar crimes and defines the concept.
Definition of White-Collar Crime
White-collar crime is a non-violent crime that involves deception or concealment to obtain or avoid the loss of money or property, personal or business gain. The FBI investigates white-collar crimes with colleagues from the Securities and Exchange Commission (SEC), the National Association of Securities Dealers (NASD), the Internal Revenue Service, the US Postal Inspection Service, and other government agencies. The FBI conducts regional, national, and international investigations (White-collar crime, 2022). To ensure success, the FBI uses intelligence and relies on its employees and proven work methods. FBI intelligence may include cooperation with specialized agencies, the presence of agents and informants in financial institutions, and surveillance of members of criminal groups and gangs.
The main distinguishing feature of white-collar crimes is that criminals have enough access and resources to implement complex fraudulent schemes to receive large amounts of money. One of these schemes may be creating complex investment vehicles, such as a Ponzi scheme. For example, a woman from Nevada could get about $ 7 million using this fraudulent scheme (U.S. Attorney’s Office. District of New Jersey, 2022). Anna Kline owned and operated several shell companies providing small business lending services. In this case, the number of loans often exceeded $ 100 million. According to a press release, “Kline required victim borrowers to pay up to 5 percent of the potential total loan amount as a ‘fee’ prior to the loan being funded” (U.S. Attorney’s Office. District of New Jersey, 2022, para. 3). This money was used to lend to previous clients of the companies, which is the main hallmark of the Ponzi scheme.
During the investigation, the FBI discovered six victims of Kline, who transferred a total of about $ 7 million to the criminal’s account. Fraud is punishable by “carry a maximum of 20 years in prison and a fine of $250,000” (U.S. Attorney’s Office. District of New Jersey, 2022, para. 11). In addition, Kline is accused of a number of other crimes, including money laundering, criminal proceedings, and obstruction.
Another widespread white-collar crime is money laundering. This crime is “turning ‘dirty’ money ‘clean’ by making it look like money from crimes came from legitimate sources” (White-collar crimes, 2022, para. 20). Moreover, money laundering schemes allow the criminal not only to accumulate wealth but also to avoid paying taxes on the money received. One of the possible options for money laundering is fraudulent schemes in the healthcare sector.
In connection with the pandemic, the Coronavirus Aid, Relief, and Economic Security Act was issued to financially secure small businesses facing difficulties due to the COVID-19 pandemic. Taking advantage of this ruling, Nevada resident Brandon Casutt filed “at least 11 fraudulent PPP and EIDL loan applications, intending to obtain more than $5.7 million, on behalf of two entities he controlled” (U.S. Attorney’s Office. District of Nevada, 2022, para. 4). Two of his applications were approved, and after receiving the loans, Casutt laundered the money by writing fake paychecks.
The investigation helped to establish fraudulent schemes through which the criminal received the money. In 2021, the COVID-19 Fraud Enforcement Task Force was created, which works within the Department of Justice to prevent pandemic-related fraud. Creating a specialized group to investigate and stop a specific type of white-collar crime is an effective preventive method that has significantly reduced the number of pandemic-related scams.
Frauds with Federal Program Funds
Fraud is a broad concept involving obtaining money in dishonest and deceptive ways. As already mentioned, white collars have significant resources for conducting financial fraud on an immense scale. One example is the case of Leonard Hart, who served as Principal and CEO of the Lincoln Charter School (LCS) in York, Pennsylvania. The school offers a program that partially compensates employees for further education.
Under the guise of earning a doctorate, Hart repeatedly applied for compensation for his tuition. With funding from the Federal program, Hart fabricated course records and forced people to bear false witness in his favor. Such a fraudulent scheme implies “10 years of imprisonment, a term of supervised release following imprisonment, and a fine” (U.S. Attorney’s Office. Middle District of Pennsylvania, 2022, para. 6). In addition, Hart is required to pay compensation for $55,311, which is equal to the funds he received.
Thus, white-collar crimes involve using complex fraudulent schemes to obtain funds in large volumes. Most often, this type of crime is committed by individuals with access to sufficient resources, and therefore the crime may be more challenging to detect. In addition, criminals often use money laundering to make it look like the money was obtained legally. The activity of the FBI in the investigation and neutralization of criminals is significant for the country as it ensures national security, financial stability, and the negative consequences of the sale of stolen patented products.
White-collar crime. (2022). FBI.
U.S. Attorney’s Office. District of Nevada (2022). Nevada man pleads guilty for COVID-19 relief fraud scheme and money laundering.
U.S. Attorney’s Office. District of New Jersey (2022). Nevada woman charged with $7 million advance fee Ponzi scheme and obstruction of justice.
U.S. Attorney’s Office. Middle District of Pennsylvania (2022). York county man pleads guilty to theft of Federal program funds.