Articles on South Carolina Law

Overview of White Collar Crime Charges in SC

by | Apr 12, 2018 | Criminal Defense, Federal Crimes in SC

If you have ever seen the movie Wolf of Wall Street, you have seen one of many versions of white collar crime.

The term “white collar crime” gets its name from the type of people who generally are business professionals that wear shirts with white collars. I am envisioning freshly ironed, dry cleaned, crisp, starched white dress shirts under an expensive business suit… but that isn’t always the case.

Plenty of people are engaging in white collar crime from the comfort of their homes by hacking into people’s banking, online investment and hedge fund accounts on their laptops. In short, the people committing white collar crime are usually professionals with some amount of social status. These crimes can be committed by administrative staff, paralegals, secretaries, receptionist, and third parties. It’s not just the folks who wear white-collared shirts.

And the crimes are not victimless. The victims can range from stockholders, banking institutions, corporations, churches, and nonprofit organizations.

The Basics of White Collar Crime

White collar crime is motivated by money and financial gains. The person who commits a white collar crime is usually someone of high social status– someone who is regarded as trustworthy, and commonly can even be elected officials or public servants.

People who commit white collar crimes frequently do so while they are doing their job. They may be trusted with certain information, breach that trust, and the breach is for their own personal gain.

White Collar Crime: What is it?

White Collar Crime, according to Black’s Law Dictionary, is “the non-violent crime usually involving cheating or dishonesty in commercial matters.” The person accused of this crime is highly motivated to make money by making money for themselves and in the process breaches the trust of his/her clients.

The reasons for making the money in a dishonest manner is not a defense. For example, if the father/husband in a family is facing losing his home and steals money from the company he works for so that he doesn’t have to lose his home, the court does not recognize this as a defense to a white collar crime.

White collar crimes are non-violent. They don’t involve assault and battery, weapons, or guns. White collar crimes take place usually over a period of time. It can be days, months or years of careful scheming, secret shady deals, hiding profits from the government or regulatory agencies (such as the Securities and Exchange Commission) and fraudulent planning.

White Collar Crime & Federal Court

White collar crimes have a history of being associated with leniency in punishment, but this is a misconception. White collar crimes are very serious crimes, and depending on the specific crime, the case can even go from being a state case to a federal case. In fact, white collar crime is so rampant in the United States that the Federal Bureau of Investigation (FBI) has its own specialized unit to handle these types of crimes. White collar criminal activity can sometimes overlap into Civil Court, but this does not mean the government can’t bring an action in state or federal criminal court.

Some Examples of White Collar Crime Are:

  • Corporate Fraud
  • Embezzlement
  • Money laundering
  • Securities fraud
  • Ponzi and Pyramid Schemes
  • Bank Fraud
  • False accounting entries
  • Insider trading, late trading, deceptive promises of gains on investments
  • Kickbacks
  • Individual tax violations/ tax fraud/ evading taxes
  • Money Laundering
  • Moving funds internationally to falsely make the funds look like they came from a legitimate source
  • Health care fraud
  • Loaning institution fraud
  • Virtual currency
  • Human trafficking
  • Voter/ election fraud
  • Mail fraud
  • Racketeering/ RICO violations

Taking a Closer Look: Financial Identity Fraud

Financial Identity Fraud is a type of fraud in SC that can be related to debit or credit cards. There are similar statutes on check fraud. The penalties for check fraud vary, depending on the amount of money wrongfully taken.

When someone intentionally, without the authorization or permission of the victim:

  1. Appropriates the use of financial resources of the other individual to that person’s own use or the use of a third party;
  2. Devises a scheme to defraud; or
  3. Obtains property, money or services by false pretences, representations, or promises

To help explain Financial Identity Fraud in plain language and to cut through all the legal jargon found in the SC Code 16-13-510, we’ll use the names Erica and Ray.

In this example, let’s say Ray gives Erica his debit card and PIN number to pay his Verizon cell phone bill online. Erica is facing hard times and she immediately sees this opportunity to pay off some outstanding medical bills online. She pays the Verizon bill as Ray authorized her to do, but Erica commits Financial Identity Fraud when she goes online and pays her medical bills using Ray’s debit card and PIN number. Erica was authorized and entrusted to pay the Verizon bill, but was not authorized to pay her medical bills. Erica will be facing criminal charges, but what exactly would she be facing if she was convicted of Financial Identity Fraud?

Someone who is convicted of Financial Identity Fraud is facing the possibility of up to ten years in prison and a fine in the discretion of the Judge. Financial Transaction Fraud is a felony in SC. The Judge can also order the wrong doer to pay back all the money that is owed to the victim (this is known as restitution).

Going back to our example, if Erica was convicted, she would be a convicted felon and lose certain civil rights associated with being a convicted felon. If the Judge ordered restitution, she would have to pay Ray back the amount of Erica’s medical bills. The Judge could additionally order a fine and/or jail time in his/her discretion.

Taking a Closer Look: Securities Fraud

Basically, it’s against the law to scheme or devise a plan to defraud someone. It’s against the law to do something by an act or in the course of business that would fraudulently be deceptive to another person. These are quite broad definitions. If someone gets some kind of financial gain or compensation for advising someone else in investing, purchasing, or selling securities that is fraudulent, there can be criminal consequences.

Securities Fraud in SC can be either federal or state criminal charges. Whether it is a state or federal charge largely depends on what government agency wishes to prosecute.

If the case is federal, the US Attorney’s Office will be the prosecuting along with law enforcement regulatory agencies such as the Securities and Exchange Commision (SEC), IRS, FBI, Commodity Futures Trading Commision (CFTC), US Postal Service, US and International Banks, or other agencies. If the case is a state case, it may be prosecuted by the Solicitor’s Office or the Attorney General’s office and state and local law enforcement agencies.

For example, in the movie Wolf of Wall Street, the stock brokers are engaged in high pressure sales tactics to solicit potential buyers of penny stocks to invest. The unrealistic, false promise of guaranteed high return on the investments is illegal.

The brokers’ tactics were designed to intentionally deceive potential investors solely for the reason of the personal financial gain of the brokers. A broker’s fraudulent trades designed to inflate profits or hide losses and dishonest activities to evade the government’s regulatory oversight is illegal. It is against the law for brokers to drive the price of stocks up by using high pressure sales tactics to unsuspecting buyers when the brokers have their own shares in that stock. Then, once the price of the stock is inflated, the brokers sell their shares at a large profit– for themselves. The buyers lose their money, not knowing this was all an illegal scheme that their trusted broker came up with to deceive them.

The exact consequences of this type of crime varies, depending on the amount of money stolen or wrongfully taken from the victim as a result of this fraudulent scheme or dishonesty (See chart below). In addition to the possible jail time, there may be fines and restitution that may be ordered to be paid.

Amount of money lost by the victim Felony or Misdemeanor? Possible jail time
$1000 or less Misdemeanor 0-3 years
$1,000 to $20,000 Felony 0-5years
More than $20,000 Felony 0-10 years

Need help with your SC white collar crime charge?

White collar crime has serious consequences. Your freedom is at stake, your family, your professional reputation, and your livelihood. You could be ordered to pay thousands of dollars back that you don’t have. What happens if you can’t pay back the money owed?

White collar crimes are particularly difficult to deal with when you are a professional, you have never been in trouble and you risk losing everything.

An attorney who has experience in white collar crime can walk you through the steps. You cannot change the decisions you have already made, but a white collar crime defense attorney can advise you on your options.

You can contact me today to discuss your case. Call 843-607-9800 now to speak to me about your case.

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