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3 types of white-collar crime

On Behalf of | Mar 19, 2022 | Criminal Defense

White-collar crime refers to a broad range of illegal and non-violent actions taken for financial gain. These crimes are often undertaken by individuals acting on behalf of a business or in the commercial realm.

There are many types of fraud and other criminal activities that fall under the scope of white-collar crime. Here are three such crimes.

1. Insider trading

Insider trading occurs when people make stock and security trades based on information that is not available to the public. For example, an executive in a corporation may know the company will announce it is laying off a large number of employees in the next quarter. If this executive sells off stock in the company prior to the announcement in order to prevent a loss, he or she could face allegations of insider trading.

2. Ponzi schemes

A Ponzi scheme is a scam that relies on attracting new investors to pay off initial investors. Such a scheme offers very high returns but falls apart once it can no longer attract new investors.

3. Tax evasion

While an inability to pay taxes is not a criminal offense, purposely misrepresenting finances in order to pay lower taxes is. Activities that fall under tax evasion include:

  • Lying on tax forms
  • Hiding assets or income
  • Falsifying records

Various other types of white-collar crime include embezzlement, identify theft, money laundering, forgery, wage theft and bribery. Many of these activities are felonies prosecuted by federal authorities. People who commit white-collar crimes often face significant penalties, including fines and jail time.