White-collar crime, a term that encompasses a wide range of California state and federal statutes, is distinct in its non-violent nature. Perpetrators of these crimes act dishonestly in a commercial setting, typically for financial gain, without resorting to physical force or violence.
Put simply, white-collar offenses are illegal acts involving deceit rather than the use of any physical force, violence, or threats of force.
Most defendants arrested and charged with a white-collar crime are accused of theft or fraud involving a victim losing money or property using technical and complex acts.
Many defendants are highly educated and affluent business professionals or management, which separates them from others. As noted, these types of fraud crimes can be handled by the state or the federal government, which has become more common.
The federal government has extensive powers and almost limitless resources to investigate and prosecute white-collar crimes.
Our Los Angeles criminal lawyers are reviewing the laws below for more information.
What Are the Common Types of White Collar Offenses?
Fraud occurs in many forms but is generally described as intentional deception to secure unfair or unlawful gain. Whether state or federal authorities prosecute a white-collar crime depends on the factors discussed below. Typically, a lot of money is lost by a particular entity or individual, which causes law enforcement authorities to get involved.
This could involve state or federal authorities. The most common white-collar crimes include the following:
- Penal Code 503 PC – embezzlement,
- Penal Code 518 PC – extortion,
- Penal Code 67 PC – bribery,
- Penal Code 470 PC – forgery,
- Penal Code 118 PC – perjury,
- Penal Code 186.10 PC – money laundering,
- Penal Code 550 PC – health care fraud,
- Penal Code 484e PC – credit card fraud,
- Penal Code 530.5 PC – identity theft,
- Penal Code 532 PC – theft by pretense,
- 18 U.S.C. § 1033 – insurance fraud,
- 18 U.S.C. § 1344 – bank fraud,
- 18 U.S.C. § 1348 – securities fraud,
- 18 U.S.C. § 1343 – wire fraud,
- 18 U.S.C. § 1341 – mail fraud,
- 18 U.S.C. § 1347 – health care fraud,
- 18 U.S.C. § 472 – counterfeiting,
- 18 U.S.C. § 873 – blackmail and extortion,
- 18 U.S.C. § 157 – bankruptcy fraud,
Who Investigates White Collar Crimes?
White-collar offenses, often characterized by their high level of sophistication and complexity, necessitate thorough and lengthy investigations for successful prosecution.
The Federal Bureau of Investigation (FBI), Securities and Exchange Commission (SEC), United States Department of Justice (DOJ), and the Internal Revenue Service all investigate federal white-collar crimes.
The California state and local law enforcement agencies also investigate these fraud offenses that impact local citizens.
It's not uncommon for a suspect to be under a criminal investigation for a week or months by one of these agencies before they become aware they are a target, which makes these lengthy investigations unique.
What are the Common Penalties for a Conviction?
The penalties for a white-collar conviction can be severe and always vary from one case to the next. Courts consider the case details and the harm caused when sentencing someone convicted of a white-collar offense, underscoring the gravity of the situation.
In California, most are “wobblers,” meaning the prosecutor can file the case as either a misdemeanor or felony. The penalties include the following:
- county jail or state prison jail sentence,
- fines and asset forfeiture,
- summary or formal probation,
- house arrest or electronic monitoring,
- victim restitution.
There are also aggravated penalties if a suspect is charged with two or more felonies of fraud or embezzlement of more than $100,000, for example.
Penalties in the federal court system are always more severe than in state court.
What Determines Whether Someone is Prosecuted at the State or Federal Level?
White-collar crimes are very prevalent right now and very serious, and, if you're charged at the federal level, it's much more severe than the state. You're looking at more time in federal custody in a higher percentage of the time.
So, many people, when they get arrested for a white-collar offense or are being investigated for it, want to know whether they will be prosecuted federally or at the state level.
Some people think that all white-collar crimes are federal, which, of course, is not valid. The state government prosecutes a lot of white-collar crimes.
Most white-collar crimes are prosecuted at the state level. The feds are typically only going to deal with:
- high-dollar,
- high-impact to society,
- highly-complex white collar schemes.
The bigger the dollar, the more likely the feds will get involved. For example, when it is complex or involves multi-jurisdictions, the feds are better equipped to deal with these types of cases.
They can go from state to state. They're all connected federally, and they can work together in various states. In contrast, state officials, police departments, really don't have that type of manpower and don't have those type of resources, and they're going to pass that type of white collar offense off to the feds.
Also, I see the feds getting involved when there's sophistication going on and a significant impact on society.
Some giant pyramid schemes involve multiple banks, which the feds love to control and will likely put the feds on the trail versus the state government.
State Government vs. Federal Authorities
The state government usually gets involved when it involves a single defendant; there are not large dollar amounts.
But, some cases fall in the middle, where there are dollar amounts, but the person is not a big player, and those cases can go either way.
Sometimes, it depends on who investigates it, whether it's the feds or the state government.
But, when you talk about white-collar crime, this is the type of offense that gets prosecutors angry, get the best prosecutors on the case, so that's why you've got to have the best criminal defense attorney defending you because you're going to have to have somebody that can at least match the prosecutors.
Hopefully, most of the time, your criminal defense attorney is better than the prosecutors — he knows how to investigate the case, how to attack the witness's credibility, if necessary, and how to win a jury trial in the right circumstances.
Defending White Collar Offenses
When it comes to white-collar crime, whether it's prosecuted at the state or federal level, the need for a skilled negotiator becomes paramount. The ability to negotiate effectively can significantly impact the outcome of a white-collar case.
This is because, in many cases, the feds or the state government have the evidence to prove the case, and we need to mitigate the circumstances. We need to:
- put you in the best position;
- we need to keep you out of jail,
- try to protect your record, and
- your reputation.
All of this takes experience. It takes know-how and a good strategy, and that's why what I do is put my 30 years of courtroom experience to work for you.
We sit down. We design our plan. We decide if we're going to fight the case or whether we're going to negotiate it, and then we come up with a plan for exactly how we can put you in the best possible position.
We're going to do that in the privacy of my office. We're going to lay out everything, and then we're going to put together what it's going to take to get you out of the criminal justice system as fast as possible.
Some of the most legal defenses against state or federal white-collar offenses include:
- lack of criminal intent,
- insufficient evidence,
- statements were not fraudulent,
- entrapment by law enforcement,
- illegal search and seizure,
- false accusation.
We might be able to negotiate with the prosecutor to reduce or dismiss the charges. Further, we might be able to avoid the formal filing of criminal charges through prefiling intervention.
If you or a loved one is charged with a white-collar offense at the state or federal level and are trying to figure out whether it will be state or federal, you've come to the right place.
I defend people in both jurisdictions. Pick up the phone. Ask for a meeting with Ron Hedding. We must first closely examine all the case details to determine an appropriate strategy.