Financial crimes can sometimes be viewed as minor offenses, where perpetrators receive nothing more than a slap on the wrist. On the contrary, these can carry serious consequences and should be treated accordingly. White-collar crime lawyers are specialists in financial law and how it applies to cases that involve criminal accusations. Here are some of the most serious financial crimes.
Ask White-Collar Crime Lawyers: What Are the Most Serious Financial Crimes?
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Money Laundering
Money laundering is typically committed by criminals who have a large amount of cash that they obtained illegally, and need some way to “wash” it so it can be used. Criminals may do this themselves, or they may enlist the help of financial professionals to assist in committing the crime. It is done by funneling cash through multiple accounts or legitimate businesses, where it mixes with legitimate cash and avoids being tagged as coming from illegal activities.
While it may seem fairly innocent, this lets criminals collect and hide lots of money, evade taxes, avoid capture, and finance other criminal activities that may be larger and perhaps more dangerous. Multiple activities may be classed as money laundering according to white-collar crime laws, but the easiest way to understand it is basically anything that helps turn illegally obtained or “dirty” money into legal “clean” money that can easily be used without detection.
Embezzlement
Embezzlement refers to a situation where a person or entity misuses or misappropriates assets that were entrusted to them by another person or entity. In these cases, the embezzler typically has a legal right to the funds but uses them for some purpose other than what they were intended. A simple example would be a company accountant or financial executive transferring company funds to his or her own personal bank account.
This is a serious financial crime, and anyone accused of this should immediately seek counsel from experienced embezzlement defense lawyers in Houston. While it often conjures images of wealthy executives funneling millions of dollars to invisible offshore accounts using complex computer codes, it can also apply to something as someone using money from one business account they own to pay for something at a different business they own, perhaps even inadvertently or without understanding the legal issues involved.
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Fraud
Somewhat of an umbrella term, fraud refers to schemes that are purposely intended to defraud people of their money. This is achieved in many ways, including deceiving investors with false information or providing financial analysts with incorrect data. Companies and their executives may manipulate things like income, balance sheets, share prices, and other financial data to misrepresent their corporation’s financial standing.
One example of fraud is self-dealing, where a financial representative acts in his or her own best interest as opposed to that of their client. There are also “pump-and-dump” schemes, where brokers use dishonest tactics to increase the price of a stock and then sell that inflated stock to their customers. The brokers then sell their own shares for large profits, leaving their clients to absorb the losses when the stock price plummets.
Insider Trading
Insider trading occurs when a broker or other financial professional possesses and uses material, non-public information that gives him or her an advantage in making financial market transactions. Most commonly, the financial crime occurs when a broker uses this privileged information to buy or sell a stock or other publicly-traded security in violation of fiduciary duty or other relationship of trust or confidence.
Using a simple case to illustrate, a works at a brokerage firm and obtains non-public information that a company plans to announce news that will significantly boost its stock value. The executive immediately buys stock in the company based on non-public information with the intention of gaining personal profit once the company announces its news to the public. By definition, this would be considered insider trading, a serious financial crime.
Terrorist Financing
Terrorist organizations represent a major threat to global peace and security. Like any criminal organization, they need financial support to build their infrastructure, fund various schemes, and achieve their objectives. They may obtain this financing through illegal activities or fundraising from members and sympathetic parties. Increasingly, they also obtain funds with the help of financial professionals such as bankers, accountants, and lawyers.
These financial professionals aid terrorists by helping them acquire and hide assets to fund their existence and activities. This serious crime is known as terrorist financing and can include everything from moving money between jurisdictions to funneling it through charities or legitimate businesses to hide its source or intent.
These are some of the most serious financial crimes, and each carries significant penalties up to and including long prison terms. While some may be obvious in their objectives, others may be committed without clear criminal intent. Anyone accused of any of these would be well advised to seek professional counsel from an experienced white-collar attorney as soon as possible.