White Collar Crime

The short version

White collar crime refers to certain types of financial crimes, often committed by people in business or government. These crimes typically involve deception and are not violent. Understanding these laws helps you recognize potentially illegal activities and protect yourself and your business.

The law this is built on

Every point below comes from the authority named next to it. Verify the current text before relying on it.

18 U.S.C. § 1341 (Mail Fraud)
This law makes it a crime to use the U.S. mail or any private or commercial interstate carrier for any scheme or artifice to defraud, or for obtaining money or property by false or fraudulent pretenses, representations, or promises.
Why it matters: It means you can be prosecuted for using the mail system to commit fraud, even if the scheme is complex.
18 U.S.C. § 1343 (Wire Fraud)
This law makes it a crime to use wire, radio, or television communication in interstate or foreign commerce (like phone calls or emails) for any scheme or artifice to defraud, or for obtaining money or property by false or fraudulent pretenses, representations, or promises.
Why it matters: It means you can be prosecuted for using electronic communication systems to commit fraud across state lines or internationally.

Words you need to know

White Collar Crime: Non-violent crimes committed for financial gain, often involving deception and carried out in a business or professional setting.
Fraud: Intentionally deceiving someone for personal gain or to cause loss to another. This often involves false statements or promises.
Scheme or Artifice to Defraud: A plan or course of action intended to deceive others to get their money or property. Both mail and wire fraud laws punish engaging in such schemes (18 U.S.C. § 1341, 18 U.S.C. § 1343).
Mail Fraud: Using the postal service or other interstate mail carriers to carry out a scheme to defraud someone of money or property (18 U.S.C. § 1341).
Wire Fraud: Using electronic communications like phone, internet, or television, in interstate or foreign commerce, to carry out a scheme to defraud someone of money or property (18 U.S.C. § 1343).
Intent to Defraud: The deliberate purpose or aim to deceive someone to cause them financial loss or to gain something valuable unfairly. This is a key element for proving fraud crimes.

Your rights

✓You have the right to remain silent if questioned by law enforcement.
✓You have the right to an attorney if you are accused of a crime.
✓You are presumed innocent until proven guilty beyond a reasonable doubt.
✓You have the right to a fair trial.
✓You have the right to confront your accusers.

How the process actually works

1
Scheme Devised
Before any communication occurs.
Someone plans a fraudulent activity to get money or property through deceit. This is the 'scheme or artifice to defraud.'
2
Communication Used
During the execution of the fraud.
The person uses the mail (for mail fraud) or electronic communication (for wire fraud) to carry out or advance the scheme. This use must be across state lines or internationally for federal wire fraud.
3
Victim Suffers Loss
As a result of the fraudulent communication.
The victim is deceived by the scheme and loses money or property. The fraud does not have to be successful for a crime to have occurred, as long as the intent and actions are present.
4
Investigation
After the alleged crime is reported or discovered.
Law enforcement agencies like the FBI or Secret Service investigate the alleged fraud, gathering evidence such as emails, phone records, and financial documents.
5
Prosecution
After investigation, varies by case.
If enough evidence is found, federal prosecutors may bring charges against the individual(s) involved. This could lead to a trial or a plea agreement.

Deadlines that can end your case

Statute of Limitations (Federal Fraud)
Generally 5 years for most federal crimes; some fraud offenses may be 7 or 10 years.
This is the time limit for the government to file charges after the crime occurred. It can be extended if the crime was concealed or involved financial institutions.

Costly mistakes

✕Ignoring unusual financial requests or emails, which could be signs of fraud.
✕Failing to implement strong internal controls in a business, making it easier for employees to commit fraud.
✕Discussing alleged fraudulent activities with others without legal counsel, potentially incriminating yourself.
✕Deleting emails or documents that could be evidence, which might be seen as obstruction of justice.
✕Not seeking legal advice immediately if you are contacted by law enforcement regarding a white collar crime investigation.

Your checklist

Understand the key elements of mail and wire fraud (scheme to defraud, use of mail/wires).
Educate employees and yourself about common fraud schemes like phishing or imposter scams.
Implement and regularly review financial controls and reporting mechanisms in your business.
Keep thorough and accurate records of all financial transactions and communications.
Consult with a lawyer if you suspect you or your business is involved in a fraudulent activity, either as a victim or a target of investigation.

Common questions

What is the main difference between mail fraud and wire fraud?

The main difference is the method of communication used to carry out the fraud. Mail fraud involves the U.S. mail or private/commercial interstate carriers (18 U.S.C. § 1341), while wire fraud involves electronic communications like phone calls, emails, or internet transmissions (18 U.S.C. § 1343).

Can someone be charged with fraud if no one lost money?

Yes, for federal mail and wire fraud, the prosecution primarily needs to prove that there was a scheme to defraud and that the mail or wires were used to advance that scheme. While actual loss often occurs, the crime focuses on the intent to defraud and the use of the communication method, not necessarily the success of the fraud.

What kind of evidence is used in white collar crime cases?

Evidence typically includes financial records, bank statements, emails, phone records, business documents, contracts, and witness testimony. Digital evidence is particularly common in wire fraud cases.

Are there state-level white collar crime laws?

Yes, most states have their own laws against fraud, embezzlement, and other financial crimes. Federal laws like mail and wire fraud often apply when the scheme crosses state lines or involves federal services, but states also prosecute crimes within their borders.

How this changes by state

While federal laws like mail and wire fraud apply across all states, each state also has its own specific laws regarding various forms of white collar crime, including fraud, embezzlement, and theft. The definitions, penalties, and enforcement mechanisms can vary significantly from state to state. For example, the monetary threshold for a crime to be considered a felony versus a misdemeanor can differ. To find your state's specific laws, you would typically look at your state's criminal code, often available online through your state's legislative website or by consulting a legal professional in your state.

When you need a lawyer

You should seek legal counsel immediately if you are contacted by law enforcement, subpoenaed for documents, or accused of a white collar crime. If you suspect your business or personal finances are being targeted by a fraud scheme, a lawyer can also advise you on how to protect your interests. Do not make statements or provide documents to investigators without legal advice.

Do this today

→Review your personal and business financial statements regularly for unusual activity.
→Learn to identify common fraud indicators, such as unsolicited requests for personal information or urgent demands for money.
→Secure your digital communications and financial accounts with strong passwords and multi-factor authentication.
→If you encounter a potential scam, report it to the appropriate authorities (e.g., FBI, FTC) and your bank or credit card company.
→Consult with a legal professional if you have specific questions about white collar crime or believe you are involved in a situation that might warrant legal guidance.

This lesson is legal information for educational purposes only, based on 18 U.S.C. § 1343 (wire fraud); 18 U.S.C. § 1341. It is not legal advice and does not create an attorney-client relationship.