Crime Pays if your Collar is White

Not all crimes are the same. Some crimes, such as murder attract higher penalties while others, such as picking a piece of candy from a store and not paying for it, are misdemeanor crimes. It would hardly get you any jail time at all. Some crimes like robbing a bank focus on getting rich quickly, but the risks are also high, and if you get caught, you are most certainly going to face some jail time.

Money laundering is another crime that certainly gets people in jail. However, some other crimes may be tied to money laundering and fraud, which will allow the perpetrators to go free or serve a minimum sentence more often than not. This is the anatomy of white collar crime. A good example is the fraud case against Paul Manafort, the former campaign chairman for President Donald Trump.

Manifort was found guilty of numerous fraud charges brought against him. He received a 47-month prison sentence from a U.S District Judge. The ruling raised a lot of eyebrows considering that Manifort reportedly cost the IRS millions of dollars.

Another even more extreme example of white collar crime, not getting the full extent of justice is HSBC’s fraud and money laundering activities. HSBC is one of the biggest banks globally. In 2012, it was found to have facilitated money laundering for drug cartels in Mexico, facilitated the transfer of funds to accounts linked to al-qaeda, and even violated various states' international sanctions. The bank was only fined profits that it can generate in a month, and the bank's CEO was let off after apologizing and vowing that it would not happen again.

Why it is easier to get away with white collar crime?

You would expect fraud and money laundering cases to end in huge sentences similar to those that bank robbers get, but that is not the case. For example, prosecutors recommended that Manafort’s sentence should be between 19 to 24 years. However, he received a significantly lower sentence, a situation that led to a lot of outrage.

It is not just Manifort’s case characterized by a more lenient sentence than expected. Many other judicial rulings have resulted in lower than expected sentences or lenient judgments, and there is a reason for it. The judicial system strives to be as consistent as possible, and so the judges often go by similar judgments made in other cases rather than going by the recommended sentence. A study conducted on the judicial system to demonstrate the need for reform shows that many judges deliver below the recommended range by fraud guidelines.

The disparity might also depend on the situation. For example, in the HSBC money laundering case, there were many participants involved in the process. Drug cartels may have approached some of the bankers and perhaps even threatened them with harm if they refused to provide banking services that would break the money laundering guidelines. It is easier in such a situation to punish the bank since the drug cartels are difficult to track.

Are white collar crimes considered less of an offense than other types of crime?

Interestingly, a person whose fraudulent activities can be sentenced to 47 months in prison despite causing the loss of millions of dollars. Meanwhile, many other people serve longer sentences for less serious crimes. A Brooklyn lawyer called Scott Hechinger pointed the judicial system's imbalances after one of his clients was sentenced to 3 to 6 years in prison for stealing coins worth $100 from a laundry room.

https://twitter.com/ScottHech/status/1103809139900407808

Heichinger highlights other cases he has dealt with where his clients seem to get the short straw, and they end up doing outrageous sentences for minor crimes. These issues highlight some of the injustices and inefficiencies that exist in the judicial system. Minority groups, especially black, often face higher sentences, and so race does play a role.

Interestingly, the majority of the offenders involved in money laundering and other financial crimes happen to be white. A U.S Sentencing Commission report revealed a higher likelihood that a judge will deliver a more lenient sentence if the offender is white. Most of the white collar crimes are also conducted by people in positions that allow them to perform such.

White collar jobs are usually conducted by well-off people who know a particular system well enough to exploit it illegally. This is why it is most of the people sentenced for white collar crime are usually white. In other words, white privilege is also a factor that comes into play. Even when they are sentenced, the white collar crime offenders usually serve their time in minimum-security prisons.

The wrong perception of white collar crime

The lack of seriousness in the judicial sentences for individuals involved in white collar crimes might make one believe that the offenses are not as serious. The lack of serious direct consequences is arguably one reason why it subconsciously thought that white collar crimes are not that serious. However, a deeper evaluation reveals that it can be quite dangerous.

The danger usually lies in the huge costs that may result from white collar crime, and these costs may not be immediately apparent. To put it in perspective, when an individual or company evades taxes, they rob the country of tax dollars that could be used to improve infrastructure and public services. The U.S economy loses roughly $300 billion annually through white collar crime, according to the FBI. This means that they end up losing more money than the amount lost through other crimes such as bank robberies.

One of the worst white collar crimes ever experienced was the malpractices conducted by banks, causing the 2008 financial crisis, which affected millions of people and entire economies. It led to jobs, and the funny thing is that the government bailed out the big banks, and the perpetrators went free. So, white collar crime certainly has a significant impact despite opposing views.

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