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Why Does White-Collar Crime Go Unreported?

The FBI defines white-collar crime as a “full range of frauds committed by business and government professionals. White-collar crime is generally nonviolent in nature and includes public corruption, health care fraud, mortgage fraud, securities fraud, and money laundering, to name a few. White collar scams can destroy a company, devastate families by wiping out their life savings or cost investors billions of dollars (and many times all three).”

White-collar crime is under-reported. There are several reasons why white-collar crimes go unreported. Sometimes victims do not know how to report it. Sometimes, they are afraid of retaliation if they do report it. Examples include the following:

  • They are hard to detect. Perpetrators are skilled at hiding their crimes. They are often in a position that puts them in charge of financial decisions and the control of funds. This makes it easy for them to divert funds and use them as their personal property without detection.
  • The victim is often a business, not an individual, which makes it difficult to trace.
  • The crime may benefit several other persons, limiting anyone’s incentive to report. An example of this has been in the news recently. A CFO of several organizations owned by one person was compensated with perks instead of funds paid directly to him as part of his salary. The boss paid the rent for a high-end condominium and paid tuition for the CFO’s grandchildren, along with other perks. The CFO did not claim the monetary value of the perks on his income taxes. His boss deducted the payments from his own corporate taxes. Win-win for both, so no reporting until the information turned up in an investigation of the CFO and the organizations who paid his “salary.”
  • They are difficult to investigate and are resource-intensive. The crime is hidden in financial bookkeeping and are undocumented.
  • Even when victims are aware they have been victimized, they prefer not to report the crime to save themselves embarrassment and to keep the public from knowing they were victims, thinking if the public discovers it, it will harm their own businesses.

If you have been accused of a white-collar crime or are a victim of a white-collar crime, Michael J. Wynne can discuss your situation with you and advise you as to your options. Email mwynne@gwafirm.com or call an experienced attorney today at 2(281) 450-7403.

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