Not all crimes are violent in nature.
While financial gain is a common motivator for all types of crime, there is a particular classification of crime in which financial gain is sought illegally in a non-violent manner under the guise of business. This is referred to as white-collar crime.
While white-collar crimes are non-violent in nature, this does not make them victimless crimes. A 2015 study estimated that white-collar crimes accounted for between $300 and $600 billion dollars of lost revenue annually, while a 2022 PwC survey found that 46% of surveyed organisations reported fraud, corruption, or economic crimes within their business over the last two years. A white-collar criminal can be anyone from a small-time tax accountant skimming a few hundred dollars each quarter, to more brazen criminals such as the recent case of a high school business manager who stole more than $350,000 of the school’s funds.
Anyone with the audacity and the know-how can be involved in white-collar crime, but it is typically perpetrated by a person in a position of authority and trust who is provided access to the inner workings of a business or organisation and chooses to take advantage of it.
Learn more about types of white collar crime and corporate crime, including laws and penalties:
- Cartel Conduct
- Bid Rigging
- Market Manipulation
- Anti Competitive Behaviour and ACCC Criminal Proceedings
- Vicarious Liability of Employers
What is White Collar Crime?
White-collar crime refers to a non-violent crime and corporate misconduct committed by people with a high social status in order to gain a financial advantage. This can include tax evasion, mortgage fraud, and securities fraud.
The “white collar” reference was coined by sociologist Edwin Sutherland who defined it as “a crime committed by a person of respectability and high social status in the course of their occupation”. Traditionally, the uniform of respectable, high-status workers has been a suit, tie, and white collared shirt, hence the name white-collar crime. White-collar criminals are normally well-off, educated, in the corporate world, and financially motivated.
Conversely, crimes committed by lower social classes that generally involve violence such as murder, are referred to as blue-collar crimes. Blue-collar crimes are generally judged by the public as more serious because the violent actions involved simplify public opinion. On the other hand, white-collar crimes are often trivialised by the media and the public due to them generally revolving around businesses such as administration, investing, or banking, which sound dull to the average person.
When people think of crime, they think of knives and guns, but financial crimes such as embezzlement, fraud, and money laundering can be performed using computers, spreadsheets, and bookkeeping software.
White Collar Crime vs Corporate Crime: What is the Difference?
White Collar Crime is committed by an individual for personal financial gain. White Collar Crimes are prosecuted against the individual themselves, rather than the company they work for. White Collar Crime is typically viewed as an individual against an individual, for example, a banker with access to an individual’s trustee funds, misappropriating these funds.
Corporate crime is a subcategory of white collar crime, where individuals within the organisation use their position (including the ability to obtain confidential knowledge) to engage in criminal activity for corporate advantage. Corporate advantage means anything gaining any edge on the competition which will be a business advantage and beneficial for the company as a whole, rather than particularly individually focused.
Common corporate crimes include insider trading, commodities fraud, accounting schemes, falsifying information, manipulating financial markets and conspiracy to launder money. Charges are brought against the company as a whole, which is different from most White Collar Crimes where prosecution is against the individual.
An example of Corporate Crime could be an ASIC employee leaking confidential information to another area of business for overall advantage.
Types of White Collar Crime
There are many types of White Collar Crimes included in the Crimes Act 1900:
- Embezzlement: Theft or misappropriation of funds.
- Cybercrime: Crimes committed through computers.
- Wage theft: Failing to pay employees, including employee benefits.
- Fraud: Criminal deception for financial or personal gain.
- Bribery: Corruption to influence the actions of another person in favour of your interests.
- Money laundering: Disguising the origin of illegally obtained money, or valuable goods.
- Identify theft: Stealing the identity or fraudulently claiming to be someone who is not yourself.
- Ponzi schemes: Fraudulent investment schemes for often fake businesses.
- Forgery: False making or alteration of a legal or official document.
- Insider trading: Trading of confidential information within a company that would not be available to the public.
- Labour racketeering: Acquiring a business through illegal means.
- Copyright infringement: Breaching copyright law.
Examples of White Collar Crimes
- False invoicing
- Diverting sales to personal accounts
- Money laundering and tax fraud against the Commonwealth by ATO employees and co-conspirators
- Cartel conduct with agreements between competitors in the shipping industry
- Manufacturing fraudulent CTP insurance claims
- Bribery for favours, information, and other benefits
White Collar Crime Statistics in Australia
The Commonwealth Director of Public Prosecutions (CDPP) prosecutes serious financial and white collar crimes, under their Commercial, Financial and Corruption Practice Group.
This involves large-scale tax fraud, criminal cartel conduct, money laundering, bribery, and corruption of Commonwealth officials.
Their latest statistics for 2020 to 2021 include a continuing focus on foreign bribery, especially with COVID-19 and lockdowns impacting traditional white-collar crime operations.
However, insider trading remains an issue of concern as the pandemic has not impacted this greatly.
White Collar Crime Penalties and Punishments
White-collar crimes that directly impact an individual rather than a large organisation are often viewed with harsher penalties and punishments compared to corporate crime. Whether it be a lone wolf or a table of corporate executives, this kind of criminal behaviour entails monetary penalties, and civil penalties.
The Australian Federal Police hold the primary law enforcement responsibility for serious white-collar crimes such as fraud but may work in tandem with local and state authorities also. Whether it is money laundering offences or corporate fraud, white-collar crime is viewed as serious criminal conduct and such corporate crimes can involve hefty maximum penalties.
Punishments for white-collar crime include:
- Forfeiture of assets
- Restitution (victims paid back the funds stolen)
- Company dismantlement
Depending on the exact nature of the crime, generally, the convicted individual or organisation will be banned from their duties. As white-collar crime cases occur when there has been a breach of fiduciary duty, the convicted criminal will be stripped of their qualifications.
For example, a lawyer would be disbarred, or an accountant or doctor banned from practice.
White-Collar and Corporate Crime Lawyer
White collar crime is often complex and multi-faceted. If you have been charged with such a crime it is imperative that you seek legal advice from an expert lawyer who is experienced in white-collar crime and corporate crime.
LY Lawyers offer services for all kinds of criminal matters, including white-collar crimes such as fraud, embezzlement, bribery and more. We are Sydney’s most trusted criminal lawyers and have offices throughout NSW. Call LY Lawyers on 1300 595 299 or contact us online to book your free consultation today.