White-collar crime is a term that is used to cover a wide range of offences. There are similarities between some of these offences and they may be investigated by the same authorities. But they are far from identical. This article explains what white-collar crime is and details some of the main offences.
White-collar crime is the range of crimes that are committed by professionals who are either in business or government. It is a term that refers to crimes that involve deceit, concealment or some abuse of trust rather than the use or threat of physical violence.
The aim of those committing white-collar crime (commonly referred to as white-collar criminals) is to either gain (or avoid losing) assets such as money, property (also known as real estate) or services or to obtain some sort of personal advantage. The main examples of white-collar crime are contained in the list below. Money laundering, bribery and tax evasion, to name a few, are some examples of white-collar crime.
Sociologist Edwin Sutherland came up with the term white-collar crime in 1939. He said it meant "a crime committed by a person of respectability and high social status in the course of their occupation".[1]
Some interpret the definition of white-collar crime as only applying to offences committed by an individual. But others, including the FBI, also consider white-collar crime to cover large-scale fraud carried out by a number of people in a company or government organisation.
White-collar crime that is part of an organised effort to boost a company is known as corporate crime. The FBI sees tackling corporate crime as one of its most important issues, due to the losses it can cause investors and the damage it can do to the US economy. Financial crimes such as manipulating financial data, the share price or other factors to deceive investors, auditors or analysts about the true financial position and viability of a company is a common corporate fraud practice.
Various types of white-collar crime have developed over the decades, as new opportunities have presented themselves. As a high-profile example, and before Sutherland had ever introduced the term white-collar crime, the early 1920s saw Charles Ponzi running investment fraud schemes that led to the term “Ponzi scheme’’ still being used a century later.[2]
At present, developments in the digital business world have made cryptocurrency a popular means of carrying out white-collar fraud, whereas in previous years it was more likely to have been mail fraud or wire fraud. Similarly, the way the world’s financial markets are now closer to each other than in previous years has produced more opportunities for people to invest worldwide.
But this has also made it increasingly possible for people to commit investment fraud (also known as securities fraud), where they make gains by using false information to convince another person to buy or sell on the financial markets. Recent years have also seen developments in finance and technology that have prompted white-collar crime such as computer-based cybercrime, healthcare fraud and intellectual property crime, which relates to issues such as copyrights, patents and trade secrets.
Here are some of the types of white-collar crimes that have been around for many years.
White-collar crime cases can be lengthy, complex and involve a number of countries. Those suspected of such crime can be investigated by law enforcement agencies. They may also be the subject of legal action (litigation) brought by people who say they have suffered losses as a result of such crimes.
Responding to either of these situations requires legal representation from those with extensive experience and expertise in this area. Those who do face the possibility of such action need to be seeking legal advice from specialist white collar crime lawyers who have a track record in representing major national and international companies and the senior figures within them.
Representation in white-collar crime cases must be conducted by those who have in-depth knowledge of the law, how an investigation or legal action may develop and the possible financial and reputational effects.
Legal advice can also be of immense proactive value regarding white-collar crime. Individuals, companies and organisations can be advised on introducing preventative measures to make it impossible to commit such offences and on compliance programmes to make sure they are meeting all their legal obligations. Such measures can reduce the possibility of them facing criminal or civil action in the future.
When a white-collar crime is suspected, it will be investigated by one or more law enforcement agencies.
In the UK, for example, the Serious Fraud Office (SFO), Financial Conduct Authority (FCA) and HM Revenue and Customs (HMRC) are among those that commence regulatory or criminal investigations into white-collar crime. Financial and business crimes such as fraud committed within the City of London financial districts may be investigated by The City of London Police. The City of London Police is the smallest territorial police force in England and Wales, responsible for law enforcement within the City of London, including the Middle and Inner Temples.[3]
In the US, it is investigated by the FBI, the Securities and Exchange Commission (SEC), Commodity Futures Trading Commission (CFTC), Financial Industry Regulatory Authority, Internal Revenue Service, Department of Labor, Federal Energy Regulatory Commission, the U.S. Postal Inspection Service and other regulatory and/or law enforcement agencies.
Professional organisations and bodies that regulate the particular sector where white-collar crime is suspected may also carry out investigations into companies or particular individuals.
While any white-collar crime that has been committed can be investigated, this will only happen if it is known.
There may be situations where the company has noticed a white-collar crime committed “under its roof’’ but does not notify the authorities. A company may decide not to report what has happened for a variety of reasons. It may, rightly or wrongly, believe it can deal with the matter internally.
The company may also be concerned about the damage to its standing in the marketplace if it became known that a crime had been committed. It may also fear the cost of having to pay financial penalties after any investigation.
But such a course of action can be dangerous. Not reporting a crime can create legal problems for the company if and when the authorities do eventually become aware of the wrongdoing. A company takes what can be a huge (and very costly) gamble by not reporting the crime.
Customer complaints, whistleblowers and other – sometimes completely unrelated – issues can lead to the authorities scrutinising the workings of a company. If they then detect the white-collar crime that the company had tried to hide, the repercussions could be serious.
While white-collar crime cases can be lengthy and complicated, the statistics indicate a willingness by law enforcement agencies to open investigations.
In the year 2020-21, the SFO opened 60 new cases. It also completed two DPAs – where a company admits wrongdoing and agrees to meet certain conditions to avoid prosecution – that saw the companies involved paying a total of £47.4M in penalties and costs.[4] In the same year, the FCA imposed financial penalties totalling £189.8M and opened 134 new cases.[5] At the end of this period, the FCA had 593 cases ongoing.[6]
It would, therefore, be better for companies to be proactive in preventing white-collar crime rather than reacting to it when it happens. Such crimes involve an individual or a number of individuals taking advantage of a situation for their own benefit.
The scope for doing this can be greatly reduced if companies assess how they work and identify the potential for this to be exploited by either a staff member, representative, customer or third party. By then devising appropriate procedures to reduce (or ideally, remove) this potential, the risk of offences being committed is drastically reduced.
The value of such preventative measures can be huge, even if it may not always be obvious. Taking action that prevents a company, to give two examples, becoming embroiled in huge, cross-border bribery and corruption probe or, finding its employees under investigation for large-scale securities fraud, can save it huge amounts of money (that would otherwise have been used to pay fines) and preserve its reputation. No company wants to pay massive financial penalties and become known as an organisation that allowed white-collar crime to flourish.
Rahman Ravelli is a top white-collar crime law firm operating internationally from their London based offices. The firm has a reputation that is built on defending clients around the world. They are adept at advising clients and managing cases in one or a number of countries in matters of criminal defence, international investigations and proactive preventative legal advice. They are a top-ranking UK law firm in both the Legal 500[7] and Chambers UK[8].
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If you would like to speak to us about these types of matters, for advice, prevention, help to conduct an internal investigation or self-reporting or, if you have been subject to an external investigation by an agency in the UK or overseas, then please feel free to contact us via our London switchboard on +44 (0)203 947 1539, send us a message online or send an email to: enquiries@rahmanravelli.co.uk.
[1] Wikipedia - White Collar Crime: https://en.wikipedia.org/wiki/White-collar_crime
[2] Wikipedia - Charles Ponzi: https://en.wikipedia.org/wiki/Charles_Ponzi
[3] Wikipedia - City of London Police: https://en.wikipedia.org/wiki/City_of_London_Police
[4] Serious Fraud Office - Annual Report and Accounts 2020-2021: https://www.sfo.gov.uk/download/annual-report-and-accounts-2020-2021/
[5][6] Financial Conduct Authority - Enforcement Data Annual Report 2020-21: https://www.fca.org.uk/data/enforcement-data-annual-report-2020-21
[7] The Legal 500 - https://www.legal500.com/firms/3482-rahman-ravelli/4990-halifax-england/
[8] Chambers UK - https://chambers.com/law-firm/rahman-ravelli-solicitors-uk-1:7917
Rahman Ravelli has helped clients navigate the complex legal landscape not only in the UK but also in the EU, US and Internationally. Some of our case work, listed below demonstrates our expertise and experience.
White collar crime is a broad term for financially motivated, non-violent offences committed by individuals or businesses in professional or commercial settings. It encompasses fraud, bribery and corruption, money laundering, tax evasion, insider dealing, market manipulation, embezzlement, identity theft, cybercrime, and a wide range of regulatory offences. The term was coined by sociologist Edwin Sutherland in 1939 to describe crime committed by persons of high social status and respectability.
Among the most serious white collar crime offences prosecuted in the UK are: fraud by false representation under the Fraud Act 2006 (maximum 10 years); conspiracy to defraud at common law (maximum 10 years); bribery under the Bribery Act 2010 (maximum 10 years); insider dealing under the Criminal Justice Act 1993 (maximum 7 years); money laundering under POCA 2002 (maximum 14 years); cheating the public revenue (maximum life imprisonment); and market manipulation under the Financial Services Act 2012 (maximum 7 years).
White collar crime is investigated by a range of UK agencies including the Serious Fraud Office (SFO), National Crime Agency (NCA), HMRC, the Financial Conduct Authority (FCA), the Competition and Markets Authority (CMA), and specialist police units including the City of London Police's Economic Crime Directorate and Regional Organised Crime Units (ROCUs). In significant cases, UK agencies will work alongside overseas counterparts including the US Department of Justice, the SEC, and the CFTC.
The Economic Crime and Corporate Transparency Act 2023 introduced a significant expansion of corporate criminal liability. It includes a new corporate offence of 'failure to prevent fraud', under which a large organisation commits an offence if a person associated with it commits a specified fraud offence intending to benefit the organisation or its clients. Large organisations are defined by reference to employee numbers and turnover thresholds. The only defence is to demonstrate that the organisation had reasonable fraud prevention procedures in place. The Act also expanded the identification doctrine for attributing criminal liability to senior managers.
The consequences of a white collar crime conviction are wide-ranging and severe. They include a criminal record, imprisonment, confiscation of assets and proceeds of crime under POCA, Serious Crime Prevention Orders, director disqualification, loss of professional authorisation, regulatory prohibition, travel restrictions, reputational damage, civil claims by victims, and in many cases financial ruin. Even in cases where imprisonment is avoided, the ancillary consequences of conviction are often devastating and long-lasting.
A Serious Crime Prevention Order (SCPO) is an order made by the Crown Court under the Serious Crime Act 2007 against a person who has been convicted of a serious offence, or against a person the High Court is satisfied has been involved in serious crime. SCPOs can impose wide-ranging restrictions on an individual's activities — including restricting their use of financial services, communications, travel, and business activities. Breach of an SCPO is itself a criminal offence carrying up to five years' imprisonment.
You should seek specialist legal advice immediately and before taking any steps in relation to the investigation — including answering questions from investigators, making voluntary disclosures, or taking any steps that could be characterised as destroying or concealing evidence. A specialist solicitor will advise on your legal position, manage engagement with the investigating authority, conduct or oversee any necessary internal review, and formulate the most effective strategic response from the earliest possible stage.
White collar crime cases are characterised by enormous complexity, high investigative and prosecutorial resource, and severe consequences for those convicted. Cases typically involve large volumes of documentary and electronic evidence, financial analysis, expert witnesses, and complex legal argument. The reputational, financial, and personal liberty stakes are among the highest in any area of law. Specialist defence solicitors bring deep case knowledge, forensic analytical capability, established relationships with leading counsel, and the strategic acuity needed to mount an effective defence at every stage.
