The term “white-collar crime” conjures up images of Enron, with executives in expensive suits furtively glancing at their smartphones while exhibiting questionable behavior toward investors. Enron even changed the American vernacular with phrases like “cooking the books.”
The actual definition of white-collar crime is essentially illegal acts that are non-violent and committed by employees performing their occupation. These can include the following:
- Ponzi schemes
- Insider trading
- Intellectual property theft
… and the list goes on. Those charged with white collar crimes are not in an enviable position and are often sentenced to prison after paying back huge sums of money. The cost to the American taxpayer is estimated at $500 billion dollars annually.
But stories of rich criminals behind oak desks capture the public imagination. The movie The Big Short, about the 2008 financial crisis and collapse of Wall Street, received numerous Oscar nominations. Let’s examine some of the more sensational cases that took the national stage.
This scandal deserves a second mention since millions of innocent people lost their life savings. Jeff Skilling and other company executives covered up enormous debt by creating shell companies. It appeared as if Enron was in great shape when in reality, debt climbed into billions of dollars. Skilling was sentenced to 14 years in prison and accounting company Arthur Andersen went out of business.
Madoff’s name has become synonymous with the Ponzi scheme. The former NASDAQ chairman had a questionable history, working odd jobs as a lifeguard and sprinkler installer. So why would people trust him with money? Good question.
Madoff built an investment firm worth billions of dollars by falsifying trading reports without getting assistance from derivatives firms that refused to trade with him.
He was suspected of fraud for years, but it wasn’t until 2008 when Madoff was finally arrested on securities fraud charges. He was sentenced to 150 years in prison and had to pay $170 billion dollars in restitution. Three people connected to the Ponzi scheme committed suicide, including Madoff’s own son, Mark.
Abramoff should arguably top this list. In this case, it was not a corporate bigwig, but rather a political lobbyist that made headlines for ripping off Native American Indian tribes that were seeking to establish casinos on reservations.
Implications involved other politicians and even the mafia. Former Ohio Republican legislator Bob Ney was imprisoned for accepting bribes.
Abramoff eventually pleaded guilty for fraud, tax evasion, and conspiracy to cheat the Indian gambling outfits of more than $85 million. Just a few months later, he was sentenced to another 70 months in prison for a fraudulent wire transfer to qualify for a $60 million loan to purchase yet another casino. The former casino owner was murdered.
As recently as 2020, Abramoff was back in the news again and is expected to be back behind bars after being charged with conspiracy to commit wire fraud involving the cryptocurrency, Bitcoin.
While not as high-profile as some cases, WorldCom imploded in 2002 and created the largest bankruptcy in U.S. history up until that time. Again cooking the books, CEO Bernard Ebbers underreported line costs and inflated revenues resulting in $3.8 billion in fraud. Ebbers was sentenced to 25 years in prison.
These criminals sound more like mob bosses than professionals. Unlawful behavior sometimes skirts the edges of what is legal, making these cases difficult to prosecute. However, occasionally, these scandals explode into public awareness, and individuals involved become famous for all the wrong reasons.