Updated: Dec 16, 2019
You’ve probably heard the term “white-collar crime” mentioned in the news and used as a plot point in movies and TV shows. But what exactly does this type of crime entail? More importantly, how can you avoid accidentally getting involved in unlawful business dealings or becoming a victim of financial crime?
What Is White-Collar Crime?
The term was coined by sociologist Edwin Sutherland in 1939. He described it as “a crime committed by a person of respectability and high social status in the course of his occupation.”
According to the Federal Bureau of Investigation, these crimes are motivated by finances. Specifically, the goal is “to obtain or avoid losing money, property, or services or to secure a personal or business advantage” through deceit and concealment instead of the threat of physical force or violence.
Types of Crimes
White-collar crimes can include corporate fraud such as accounting schemes, insider trading and tax fraud. These crimes don’t always involve big business, however. They can also be perpetrated by and on individuals with email scams, pyramid schemes and identity theft.
How to Protect Yourself
If you’re a small-business owner, never allow just one person to be in charge of all your company’s finances. Implement policies such as two signatures on every check and have an independent accountant perform regular audits.
You should also educate yourself. The National White Collar Crime Center offers training on identifying many types of financial fraud, including cyber fraud. Research any individual or business you plan to work with. Ask for references and check with the Better Business Bureau to see if there are any complaints against them.
Have questions? Reach out today.