We regularly read and hear about “White-collar” crime, even though the term may not be used. So, what is “white-collar crime”? White-collar crime is any illegal act committed by a person in conjunction with his or her occupation. It’s not a legal term but it’s come into common use in the last 50 years. Most white-collar crime has one underlying purpose: it is a deliberate attempt to increase personal or corporate profits, even if it means breaking the law. White-collar crime puts profits or greed ahead of doing the right thing.
The FBI has identified these white-collar problem areas as national priorities:
– Antitrust Violations such as price fixing, bid rigging, and market or customer allocation.
– Bankruptcy Fraud including schemes such as concealment of assets, multiple filings, false statements, trustee or attorney fraud, forged filings, embezzlement, and credit card fraud.
– Cyber Crime ranging from computer hacking and theft of technology to on-line investment fraud schemes.
– Environmental Crimes such as illegal disposal of hazardous waste or toxic emissions.
– Financial Institution Fraud including fraudulent checks, money orders, currency, and debit/credit cards.
– Government Fraud involving the federal government’s procurement and contracting process.Health Care Fraud involving equipment suppliers, laboratories, home health agencies, and medical transport companies. This fraud costs private and government-sponsored insurance agencies $100 billion a year, according to government estimates.
– Insurance Fraud including frauds perpetrated by third parties and insiders, amounting to approximately $28 billion annually.
– Intellectual Property Rights, a valuable commodity that is often targeted by unscrupulous criminal organizations throughout the world.
– Money Laundering, the investment or transfer of money generated from criminal activity, to make it look as if funds were generated through some legitimate means.
– Public Corruption where a public official abuses his/her position of trust within a governmental entity in violation of federal law.
– Securities Fraud including penny stock frauds, insider trading, market manipulations, unregistered securities frauds, and broker embezzlement schemes.
– Telemarketing Fraud victimizing millions of people, particularly the elderly, and costing approximately $40 billion annually.
White-Collar Crime in Your Job
At first glance, we might assume that this kind of crime does not directly impact our work lives. Take a closer look.
Do you use a computer or smartphone, access the internet or use social media? Almost all of us do and that can put our personal and work information at risk to hackers and criminals. That data ranges from personal bank and credit card information to our corporate strategies, customers’ financial records and employees’ health data.
Do you handle checks or other negotiable instruments in the course of your job? In the past couple of years, financial institutions have reported total losses of more than $3 billion because of fraud and other financial crimes.
Do you have access to creative, technical, and intellectual property? This kind of information could be of value to an unscrupulous person.
Do you have access to information about BBNC and the companies we deal with that could put you at risk for securities fraud or insider trading violations?
Do you report or record financial data or expenses? Fraud schemes that involve false filing of information or fabricated sales or profit reports cost billions annually. Financial information is compiled from data reported by individuals in the company. If its integrity is compromised at any level, you may be contributing to a crime.
In the past, the punishment for white-collar criminals involved loss of reputation, loss of job and perhaps fines. Today, global enforcement agencies are joining forces to detect and prosecute white collar crime. US agencies such as the Department of Justice and the Securities and Exchange Commission have made white collar an enforcement priority. Criminal and civil charges are being brought against companies, their officers and employees who participated in the illegal activities.
In white-collar crime situations, individual employees may unwittingly contribute to the wrongdoing. However unwitting or innocent your contribution may seem, in the end you will be held responsible for your individual actions.
Controls and Prevention
– Our company has many controls and procedures in place to prevent exposure to fraud or other crimes. Each of us has an obligation to support these procedures. In short:
– Be sure you fully understand the safeguards, audits, and procedures that relate to your job. If you have questions or concerns, speak to your supervisor, HR or Legal.
– Apply the rules and procedures to all employees and transactions, regardless of their source. Don’t assume that someone with authority or more experience is “always right.”Provide a truthful and accurate record of all transactions.
– Safeguard access to information such as computers, documents, or authorization codes.
If you see or suspect any behavior that indicates the possibility or opportunity for white-collar crime, report it immediately to management or your Helpline.
White-collar crime has a very high economic and human cost. Unchecked, it can have a devastating effect on our public welfare and economic well being. We have an obligation to understand, prevent, and report incidents or possibilities of white-collar crime.
One of my co-workers isn’t very careful about securing the personal information on her desk. She says nobody could ever figure it out anyway. Some of it is customer information, including billing details. What should I do?
If your co-worker isn’t following company procedures in recording and securing this information, you should speak to your supervisor about the situation. Actions like your co-worker’s could compromise BBNC financial information and leave us open to fraud.
One of our subcontractors submitted an invoice for the full price of the goods we purchased. This seemed fine because it was the price we had agreed on. Later, I called that subcontractor’s accounts payable department to check on the company’s tax ID number. I was told that their paperwork reflected “our usual” 10% discount. What is going on?
This may be a simple clerical error or a fraudulent situation that you have uncovered. Contact our auditing department so that this situation and our past dealings with the subcontractor can be reviewed.
One of our subcontractors consistently has cash entries for the purchase of large capital goods. He says that the purchases are made by “good customers” and that I shouldn’t question the entries. Is there anything to be concerned about here?
Large capital purchases made by cash are indications of money laundering. If our company is participating in any way, even as an innocent vendor of goods, we will be held accountable. Contact BBNC’s Legal Department right away. Do not alert the dealer. This matter must be investigated.