Financial crimes can be tough to defend against because of the nuances related to intent and authority to act. Nonetheless, knowing the elements of a white collar crime can help you to better understand and fight any charge against you. In today’s blog, we will go over 5 common white collar crimes in Washington – credit card fraud, identity theft, tax fraud, money laundering, and embezzlement – that you should be aware of.
5 Common White Collar Crimes
Credit Card Fraud
Credit card fraud law establishes criminal penalties for the deceptive or unauthorized use of another person’s credit card account in an attempt to steal money, goods, or services. Washington categorizes these crimes under two classifications – whether the credit card is physically present or not present, and the alleged victim’s credit card number is used without their consent.
“Card present” crimes are situations in which the defendant has stolen another’s physical credit card. This could include schemes to apply for new credit cards in the alleged victim’s name or to change the address on the victim’s account and then request replacement cards.
“Card not present” crimes do not require the criminal to have the alleged victim’s physical card, just the credit card number. The fraud is usually accomplished by recording the credit card number and other identifying information so it can be used online, over the phone, or in some other way that does not require the card to be swiped at the point of sale. These types of crimes are typically prosecuted along with identity theft, and the court may award the victim costs of the identity theft, including the costs of clearing the victim’s credit history, court costs, and attorneys’ fees.
The act of obtaining and/or using another individual's personally identifying information -- such as Social Security numbers and birth dates -- is identity theft. Those guilty of identity theft typically use such personal information to fraudulently open credit card accounts or commit crimes in another's name. Washington charges identity theft as a felony, with sentences of up to 10 years in prison and fines of up to $20,000 for the most serious offenses.
Note that the identity theft statute does not apply to:
- efforts by financial institutions to test security procedures or to maintain confidentiality of customer information;
- investigations of employee misconduct or negligence; or
- efforts to recover personal information of the financial institution obtained by another person in any manner described above.
If the loss resulting from identity theft is less than $1,500 (second degree identity theft), the crime is charged as a Class C felony. If the loss is greater than $1,500 (first degree identity theft), the crime is a Class B felony. The convicted person is liable for the greater of $500 or actual damages, and for reasonable attorney fees.
Tax fraud is another serious white collar crime in the state. Acts of tax fraud may involve claiming deductions that don't apply or not reporting income with the intent to avoid paying taxes. For example, it is illegal to inaccurately declare all of a person’s income, deliberately overstate expenses or deductions, or knowingly fail to file tax returns when they have taxable income in an attempt to avoid detection. Associated crimes often include embezzlement, forgery, fraud, falsifying business records, and grand theft.
Common actions that signify tax fraud are:
- underreporting income;
- overestimating expenses or deductions;
- failing to collect employment taxes;
- making false statements to investigators;
- violating employer withholding requirements;
- not filing a yearly tax return.
Tax fraud is punishable by both civil and criminal penalties, and in addition to state law penalties, individuals committing tax fraud can also be investigated by the Internal Revenue Service (IRS).
It is illegal in Washington for a person to conduct (or attempt to conduct) a financial transaction that involves the proceeds of an unlawful activity and knows that:
- the property is the result of specified unlawful activity;
- the transaction is designed to conceal or disguise the nature, source, ownership, or control of the proceeds and acts recklessly as to whether the property is the result of specified unlawful activity; or
- the transaction is designed to avoid a transaction reporting requirement under federal law.
Note that the statute defines a financial transaction as any sale, purchase, gift, transfer, loan, trade, deposit, withdrawal, extension of credit, or other acquisition or disposition of property. The specified unlawful activity that falls under a money laundering case is generally an offense classified as a Class A or B felony in Washington, an offense listed as "criminal profiteering," or an offense in another state or federal jurisdiction that's punishable by more than 1 year in prison.
Violation of Washington money laundering laws will result in a civil penalty for twice the value of the proceeds involved in the financial transaction as well as the costs of the suit, and guilty individuals will be charged with a Class B felony punishable by up to 10 years in jail and/or up to $20,000 in fines.
Embezzlement is a form of theft where the embezzler acquires possession of a property due to their position, role, or relationship with the owner. In most embezzlement cases, the person will take or use the property for their own personal advantage. Embezzlers can be employees, trustees, friends and relatives, or public officials. Note that embezzlement cases where a public official is the perpetrator will likely face stricter laws than a case involving a standard employee.
The actual penalties for embezzlement will depend on the specific facts of the case. In general, embezzlers are punished based on the value of the property involved:
- Less than $750 – up to 1 year in jail and/or a fine up to $5,000
- $750-$5,000 – up to 5 years in jail and/or a fine up to $10,000
- More than $5,000 – up to 10 years in jail and/or a fine up to $20,000
Seek Legal Representation Today
If you have been accused of committing a white collar crime, whether credit card fraud or, on a larger scale, embezzlement, speak with an attorney immediately for legal representation. The team at Hester Law Group can examine your situation and craft a defense against the specific accusations against you.
Schedule a free consultation with our firm today!