The term “White-collar crime” encompasses a range of non-violent crimes committed by individuals, usually within their professional capacity, for financial gain. These crimes are characterised by deceit, concealment, and violation of trust rather than the use of physical force or violence. This term was first introduced by sociologist Edwin Sutherland in 1939, who defined it as crimes “committed by a person of respectability and high social status in the course of their occupation.”
White-collar crimes are distinct from other types of crimes in that they typically occur in business and government settings. The perpetrators are often individuals in positions of authority or trust, such as executives, managers, and public officials. These crimes can have far-reaching consequences, affecting not only the direct victims but also the economy and society at large.
White-collar crime encompasses a broad range of illegal activities committed for financial gain. Understanding the various types of white-collar crimes is essential for recognising the methods used and the impact these crimes have on society and businesses
Fraud
Fraud is a deliberate deception intended to secure an unfair or unlawful gain. It is one of the most prevalent types of white-collar crime, involving various forms such as securities fraud, insurance fraud, and mortgage fraud.
Securities Fraud
Securities fraud, also known as stock fraud or investment fraud, occurs when individuals or companies deceive investors or manipulate financial markets. This can include insider trading, where individuals with non-public information about a company trade its stocks, and Ponzi schemes, where returns are paid to earlier investors using the capital of newer investors rather than from profit earned.
Insurance Fraud
Insurance fraud involves providing false information to an insurance company to receive compensation or benefits. This can be exaggerated or fabricated claims, falsified applications, or staged accidents. According to the Association of British Insurers (ABI), insurance fraud costs the UK insurance industry over £1.3 billion annually.
Mortgage Fraud
Mortgage fraud occurs when individuals misrepresent or omit information on mortgage applications to obtain loans they would not otherwise qualify for. This can include inflating property values, lying about income, or using false identities.
Embezzlement
Embezzlement involves the misappropriation of funds or property entrusted to someone’s care. This is typically committed by employees or executives who have access to company finances.
Corporate Fraud
Corporate fraud encompasses illegal activities undertaken by an individual or company to deceive stakeholders. This includes accounting fraud, where financial statements are manipulated to present a false picture of a company’s financial health, as seen in the Enron scandal.
Insider Trading
Insider trading involves trading stocks or other securities based on confidential, non-public information. This practice is illegal as it undermines investor confidence in the fairness and integrity of the securities markets.
Money Laundering
Money laundering is the process by which individuals or entities disguise the origins of illegally obtained money, typically through a complex sequence of banking transfers or commercial transactions. The end goal is to make the illicit funds appear legitimate. The process of money laundering generally involves three stages: Placement, Layering and Integration.
Tax Evasion
Tax evasion involves deliberately underreporting or failing to report income to avoid paying taxes. This illegal activity deprives governments of the revenue needed for public services and infrastructure. The Panama Papers scandal exposed numerous instances of tax evasion by wealthy individuals and corporations.
Bribery and Corruption
Bribery and corruption involve offering, giving, receiving, or soliciting something of value to influence the actions of an official or other person in a position of authority. This can occur in both public and private sectors and undermines trust in institutions.
Cybercrime
Cybercrime refers to criminal activities carried out using computers or the internet. This includes hacking, identity theft, and phishing scams. With the increasing reliance on digital technology, cybercrime has become a significant concern for businesses and individuals alike. The 2017 Equifax data breach, which exposed the personal information of 147 million people, highlights the severe impact of cybercrime.
