White collar crime has grown over the decades since the term was first coined more than 60 years ago. Almost everyone has heard of or become familiar with the phrase and what it means. These crimes are mostly committed by business professionals or government employees and are based on deceit, hidden actions, or violations of authority or trust. Their motivation is generally to get monetary gain or to avoid losing it or obtain an advantage for one’s business or personal interests.
On the federal level, these crimes are generally investigated by the FBI and their investigations are lengthy, complex, and intensive. These investigations can be regional, national, or even international in their coverage and can take up to years to complete in search of enough evidence to convince a jury in federal prosecution.
According to the FBI, one the most common white collar crimes is corporate fraud. This is a crime that can cause substantial monetary losses to the public and can bring extreme damage to our economy as witness the Wall Street fiasco that engendered the 2008 recession. The FBI reports that the most of the corporate fraud cases that it investigates involve falsified accounting schemes or fraud, obstruction of justice, self-dealing by insiders, and the misrepresentation of services.
The activities used in such schemes can include but are not limited to:
- Fake accounting records leading to a deceitful picture of one’s financial state
- Hiding losses or inflating profits through the use of fraudulent trades
- Illegal transactions
- Insider trading
- Hiding flaws or defects of products through misrepresentation
As an example, a company may falsify its financial records in order to make it appear to have an abundance of profitability which it does not really have. This may be done for a number of reasons, to conceal losses or large expenses, to make the company look better to investors, or to protect its stock.
Examples of Corporate Fraud
When employees at Wells Fargo Bank were given ridiculously high sales quotas, to meet them they began to open bogus accounts under the names and information of existing customers. For example, a customer with a checking account would then have a savings account or a credit card opened by an employee without the customer knowing it. These resulted in more than two million false accounts being opened leading to short-term success for the bank. Once this scam was discovered by the Department of Justice and the SEC, the bank was required to pay $three billion in fines and lost public trust in a scandal that was widely publicized.
Another famous example of corporate fraud included Volkswagen. The German carmaker was found to have created a type of software that it put into approximately 11 million of its diesel cars that could falsify the results of emission tests. This was done to save money for the company but, when it was discovered, cost the company enormous sums. In the U.S., more than 480,000 cars had to be recalled and Volkswagen wound up owing approximately $25 billion in fines. The CEO eventually resigned and this scandal was also a blow to the company’s otherwise positive reputation.
Accused of Corporate Fraud?
As you can see, corporate fraud committed by the directors or employees of businesses can result in serious consequences. Ensuring that you have legal representation that can match the intensity of federal law enforcement agencies and prosecutors is vital in these situations. That is why we highly recommend that you turn to Martin G. Weinberg Attorney at Law in Boston. Our federal defense lawyer has decades of intensive experience that can be used on your behalf to defend against any accusations of corporate wrongdoing.
Contact our firm at (617) 227-3700 to arrange for a consultation with our distinguished attorney today.