White Collar Crime

White Collar Crime

The Legal Information Institute (2009) indicates that white collar crime encompasses a range of crimes that are committed by some government and business personalities who are socially well-placed. They therefore can mastermind a white collar crime based on their understanding of organizational and functionalities of different departments in organizations; these crimes are not accidental but intentionally done (Schechter, 2009). The crime has been spiraling negative effects on individuals, corporate organizations and the government as well. The nature and magnitude in financial losses in some of the white collar frauds committed by the white collar criminals have the potential to spiral and affect so many people who are not associated with fraudulent acts by a few individuals. The Legal Information Institute (2009) also noted that white collar crimes have continually evolved both in practice and the level of the criminal’s organizational complexities with commercial institutions recoding a comparatively higher rate of such crimes than other institutions. Legal approach to tackling the crime is often met with the complexity with which the white collar criminals accomplish their criminal activities. There are wide ranges of criminal acts that constitute white collar crimes. The Legal Information Institute (2009) has listed among others money laundering, fraud committed within corporate institution, healthcare and insurance fraud, mortgage or mass marketing scams as some of the white collar crimes.

The government has laws aimed at fighting the crime and stipulated penalties against those who are convicted of having committed a type or more of a white collar crime. The Legal Information Institute (2009) also indicated that the government can choose to sanction corporate organizations, make offenders pay fines, confer detentions of white collar offenders or let a convicted white collar criminal to offset prosecution expenses. In the United States, the federal government creates laws aimed at tackling white collar crimes and according to the Legal Information Institute (2009) it works in tandem with other federal agencies in enforcing such laws.

Latest Big White-Collar Crimes in America

Integrity Bank in Atlanta added to the statistics of banks that closed in 2008 just when the economic recession was beginning to take toll in the US. According to Brown (2010), Integrity Bank despite having a motto that says ‘In we God we Trust’, involved itself in financial fraud just like other banks that were caught in the real estate bug. The bank’s executives, Douglas Ballard and Joseph Todd Foster, were held responsible for selling loans to a hotel entrepreneur in order to get kick backs. The charges conferred to the two included bank fraud, conspiracy and corporate fraud which are all included under crimes that are all classified under white collar crime by the FBI. One developer who benefited from Integrity’s fraudulent loans is called Guy Mitchell who received up to $ 80 million according Brown (2010). It is imperative to note that a number of banks in the build up to the recession that began in 2008 were genuinely caught in the real estate lending whose value later took a nose dive after heavy lending of mortgages prior to 2008. However, Brown (2010) noted that Integrity Bank’s fraud took place solely because of the bank’s executives who decided to commit the crime to the detriment of the investors and customers of the bank. Apparently, the state of Georgia where Integrity Bank was established in the year 2000 has had a staggering statistics of failed banks, recording up to 38 banks failing in the year 2007 (Brown, 2010).

Angel Toy Corp

Angel Toy Corp in Los Angeles was caught in a complex financial fraud of money laundering that involved depositing drug money from Mexico and Colombia into the corporation’s bank accounts. According to the U.S. Immigration and Customs Enforcement (2010), Angel Toy Corp provided a means through which drug money was deposited through the corporation’s account in units of $ 10, 000 or less to avoid the pitfall of accounting to the currency reporting officers on any deposits that would exceed $ 10, 000. The corporation’s executives Huang and Yu channeled the money to China to buy stuffed toys which were exported to Colombia for sales. The Immigration and Customs Enforcement (2010) further indicated that Colombian drug traffickers got clean money in terms of Colombian pesos through reimbursements in the complex international trade facilitated by Angel Toy Corp. The company marketed itself as a toy company while it was ironically acting to accomplish money laundering of the drug profits. The executives, Cheng Huang, Ling Yu and Xiaoxin Ju, were liable to face a maximum of five years in prison if convicted of structuring money laundering (U.S. Immigration and Customs Enforcement, 2010).

Gray, Synder and Stephey (2011) reported that Kwame Kilpatrick, the former Detroit mayor, had an affair with Christine Beatty who was also serving in the city’s council, a sexual scandal that the two denied. The former pleaded guilty to accounts of charges against laying obstacles to the course of justice in 2008 leading to his four months sentencing in jail in 2008. The release of Kilpatrick from jail in early February came just in a short duration before the release of texts exchanged between the former mayor and his clandestine through the use of pagers that were given to them by the city. One irony in Kilpatrick’s sex scandal is that even the city’s top attorney Valerie Colbert-Osamuebe gave false statements to the Detroit City Council. According to Swickard (2012), Valerie never revealed the agreement between the mayor and his top aide that required everyone who knew of the affair to keep silent. The former mayor settled for outside court settlement of the allegation with accusers in which he paid them up to $ 8.4 million, an amount that was purely tax payers. In an important case as Kilpatrick’s, a top attorney decided to disregard important evidence in the chronology of communication between the ex-mayor and Christine. Swickard (2012) further added that the city’s long term financial woes had attracted the state’s interest to investigate the staggering debt that stood at $ 12 billion by 2008.

The Impacts of the Big White-Collar Crimes and Conditions That Favor White Collar Crime

It goes without saying that some of these white collar crimes have led to heavy financial losses to ordinary citizens, investors, states and the federal government. In the Integrity Bank’s case, Mr. Mitchell received a reported $ 80 million of which Brown (2010) noted that the beneficiary never returned but instead gave bribes to the bank’s executives who rewarded him with fraudulent loans. Angel Troy Corp shows how drug lords can engage in complex money laundering schemes and end up benefiting from the value of the dollar without paying taxes. Kilpatrick’s case shows how people in office can embezzle funds on issues that are not important to the public. With what audacity can a mayor afford to swindle $ 8.4 million while the city’s debt was devastatingly increasing? The reputation of the institution, as well as the individuals who engaged in the discussion of white collar crimes led to a destroyed reputation. Valerie’s attorney certificate was suspended, while Kilpatrick was forced to resign from his post. The executives of Angel Toy Corp were arraigned in court and fined as well as their company sanctioned. Integrity Bank collapsed after the fraud that was committed by a few people while the beneficiaries such as Mitchell expanded his hotel business through the fraudulent funds.

Furthermore, victims of credit card fraud are left in desperate situations and most of them are left in great debt that makes there lives a living hell (Schechter, 2007).

Overarching corporate greed in America led to the 99 percent versus the 1 percent who were being held responsible for the widening wealth gap between majority of Americans and the one percent who hold the largest part of the American wealth. Some of the grievances that were advanced by the Occupy Wall Street Movement included loss of jobs and housing as well as increasing America from 2008 when credit crunch was just beginning to take toll on the people. The Occupy Wall Street Movement passed a salient message across America that wealth gap and corporate demagoguery were far reaching with adverse effects than could be imagined. Occupy Wall Street Movement was also marked with an active participation of students from across America whose complaints included rising tuition fee but with dismal chances of getting jobs upon graduation. As a result of high inflation rates, college graduates in America have resorted to securing educational loans of which majority are not sure to repay within specified periods because of dismal chances of getting jobs upon graduation (Wagner-Pacifici, 2012).

            Some of the conditions that have made it possible for White Collar Crime to thrive in the US include what Schechter (2011) calls fortification of the place of the financial institutions within the US economy. The financial institutions in America have reinforced their control of the economy by becoming malicious and savvy in how they plot to commit financial fraud. The financial sectors have also established an intricate connection with lobbyist as well as by making political donations that are only schemes of ensuring that they are not caught. On the other hand, Schechter (2011) has argued that some of the industry innovations have only aided to accomplish nefarious plots from monitoring. The industry has also largely adopted operational theories that won the backing of economist without suspicion that a crisis would hit.

Prevention Mechanisms for What Collar Crimes

Regulation which according to Hedges (2010) remains one of the oldest mechanisms the society has control over itself. Unless a society is able to control people from abusing authority, enslaving the taxpayer as well preventing outcropping of greed, the powerful will legalize crime. The mode of operations by the financial institutions cannot be any different from that of a system that has legalized crime. As the economy that is driven on falsehood crumbles, its operatives loot the public coffers enriching themselves and those at the top to the detriment of the middle and the lower income groups.

If little is done by the by pressure groups and people from below then very little or no change at the top should be expected at the top just like Schechter (2011) argued that without concerted efforts by progressive communities people should expect a continuation of the very systems that led America into financial crisis. However, the single most important prevention mechanism to White Collar Crime is regulation of the financial institutions. Taibbi (2012) argued that Bank of America that is supposed to be the regulator is only but an institution where corruption and fraud thrive to the detriment of the taxpayers.

            The ruling in the Citizen United versus Federal Electoral Commission case that challenged the Bipartisan Campaign Reform Act that espoused limitations on independent corporations financing of political campaigns was largely ok. The Supreme Court of the US held that it was illegal for Citizen United to air the film that was meant to critique Hillary Clinton. Letting Citizen United to finance individuals’ campaigns would have opened another to strengthen the relationship between elected officials and fraudulent corporations.


White Collar Crime that has largely become entrenched in American and widely accepted means of amassing wealth by some corporate leaders and politicians can be fought effectively by ensuring stiff regulation. The federal government should create stiffer regulatory measures to avoid conditions that have largely created an atmosphere where corporate greed is the order of the day.



Brown, R. (2010). 2 at Faith-Based Bank Are Indicted Over Bribes. Accessed July 3, 2012 <http://www.nytimes.com/2010/05/08/business/08bank.html?_r=1>

Croall, H. (1992) White Collar Crime. Buckingham: Open University Press.

Gray, M., Snyder, J. & Stephey, M.J. (2011). Kwame Kilpatrick. Accessed July 3, 2012<http://www.time.com/time/specials/2007/article/0,28804,1721111_1721210_1721124,00.html>

Hedges, C. (2010). Plunder. Retrieved on July 20, 2010 from http://plunderthecrimeofourtime.com/reviews.htm

Immigration and Customs Enforcement. (2010). L.A. Toy Company accused in scheme to launder foreign drug proceeds: Millions of dollars in ‘structured’ deposits in U.S. allegedly went to clients in Mexico and Colombia. Accessed July 3, 2012 < http://www.ice.gov/news/releases/1007/100702losangeles.htm>

Legal Information Institute. (2009). White-Collar Crime: An overview. Accessed July 3, 2012 <http://www.law.cornell.edu/wex/White-collar_crime>

Rosenfeld, S.F & Messner, R. (2007). Crime and the American dream. Belmont, CA: Thomson/Wadsworth.

Schechter, D. (2011). The 10 Reasons the Banksters Get Away With It. Retrieved on July 20, 2010 from


Schechter, D. (Director). (2009). Plunder: The Crime of Our Time. [Motion picture]. United States: Paramount Pictures.

Schechter, D. (Director). (2007). In Debt We Trust. [Motion picture]. United States: Paramount Pictures.

Swickard, J. (2012). Detroit city attorney suspended in Kwame Kilpatrick scandal, 2012. Accessed July 3, 2012<http://www.usatoday.com/news/nation/story/2012-04-06/detroit-city-attorney-suspended/54079704/1>

Taibbi, M. (2012). Bank of America: Too Crooked to Fail. Retrieved on July 20, 2012 from


Wagner-Pacifici, R. (2012). Occupy Wall Street: The Return of the Repressed. Law, Culture and the Humanities, 8(2): 190–194. Retrieved July 11, 2012 from DOI: 10.1177/1743872111435962.


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