White Collar Crime: Who These Criminals Are Really Hurting

There’s no doubt white collar crime in the US is out of control. The number of white collar criminals have increased in proportion to the growth of industry itself, and the 2013 FBI report on white collar crime showed a decrease in the number of white collar criminals prosecuted. Perhaps, the decrease in prosecution is evidence that white collar criminals are far more sophisticated and less visible to legal authorities. But who are they really hurting and what’s being done to mitigate the effects of these kinds of crimes?

White Collar Crimes by Description
Since most white collar crime is usually related to fraud, white collar criminals often spend most of the money stolen before they are brought to court. One example of this is the largest fraud committed by a white collar criminal in US history, Bernard Madoff. Over a 17-year period, Madoff bilked his clients in a quasi Ponzi scheme of more than $67 billion, most of which was related to retirement funds. Most white collar fraud is not dissimilar to the famous fraud committed by Charles Ponzi in 1882. The template for white collar fraud is to defraud a business or its clients of a specific amount of money until the crime becomes obvious.

When Enron collapsed as a result of ongoing fraud, thousands of Enron employees lost their jobs and retirement savings tied to Enron stock. The cost of unemployment is borne by taxpayers who pay federal and state unemployment taxes as show by this law infographic.

There others types of white collar crime related to the use of hi-tech equipment like identity theft, theft of proprietary business information, insider trading and theft of governmental classified information. Most of these crimes are committed by computer hackers.

White Collar Crime Who These Criminals Are Really Hurting

Source: Pexels.com

Reckless Banking Crimes
Whenever a business goes into bankruptcy, the cost is borne by taxpayers. This is what occurred during the Savings & Loan crises of the 1980s and 1990s. In September of 2008, a massive financial meltdown occurred as a result of fraudulent mortgage banking practices that forced taxpayers to fund Trouble Assets Relief Program (TARP) and The American Recovery and Reinvestment Act of 2009 (ARRA). It required an army of legal advisers with online LLM degrees in law to represent victims of mortgage banking fraud.

When it comes to huge losses from crimes committed by white collar criminals, investors, employees, consumers, and taxpayers all hurt the most. Ivan Boesky, Michael Milkin, Andrew Fastow, and more recently Ira Rennert, were investigated, convicted and fined for defrauding clients or investors of billions of dollars. Hopefully we can move toward a future where these kinds of criminals can be properly prosecuted.

Brooke ChaplanBrooke Chaplan is a freelance writer and blogger. She lives and works out of her home in Los Lunas, New Mexico. She loves the outdoors and spends most her time hiking, biking and gardening. For more information contact Brooke via Twitter @BrookeChaplan.