White collar crime definition
/What is White Collar Crime?
White collar crime refers to several types of fraud that are committed by business professionals. These crimes are not violent; instead, perpetrators rely upon deceit and concealment to divert funds and other assets for their personal gain, or to avoid the loss of assets. White collar crime can result in much higher losses than from other types of crime.
Examples of White Collar Crime
There are many types of white collar crime, including embezzlement, forgery, and insider trading. Examples of white collar crimes are noted below.
Embezzlement
Embezzlement involves the theft of assets that have been entrusted to a person. For example, someone responsible for the inventory stored in a warehouse could be selling it out the back door of the warehouse.
Forgery
Forgery involves the creation of a fake legal document or the alteration of an existing one. For example, an accounting clerk could alter the pay-to name on a check so that she can deposit it into her own account.
Insider Trading
Insider trading occurs when a person has information not available to the general public and uses it to make advantageous securities trades. For example, a company controller could sell his company’s stock short because he knows it will report a loss in its next financial statements.
Insurance Fraud
Insurance fraud involves the use of deception to gain a payment from an insurance provider.
Intentional Misstatement of Financial Statements
The intentional misstatement of financial statements involves alterations to present an image of the financial results or position of a business that is incorrect.
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Money Laundering
Money laundering is the process of obscuring the origins of cash, so that it appears to be legitimate.
Nigerian Scam
A Nigerian scam occurs when emails are sent that request assistance in transferring a substantial amount of money.
Ponzi Scheme
A Ponzi scheme is a deception in which early investors are paid off from funds invested by later investors, rather than from actual investment returns.
Securities Fraud
Securities fraud occurs when there is a purchase or sale of securities that is based on the issuance of false information or the withholding of material information.
The "white-collar crime" name comes from the types of individuals who usually engage in it - executives, managers, staff employees (such as accountants), and so forth.