• How They Do It: Insight into White Collar Crimes

    Author : July 1, 2018

    The New York Times recently released a ‘White Collar Crime Cheat Sheet’, which can be found reproduced in full here. Using the advice of Frank Abagnale, the protagonist in ‘Catch Me If You Can,” it offers up some of the most common schemes that white collar criminals undertake to defraud individuals and businesses alike, often only a few hundred dollars at a time. Below is a summation of some of the incredible plots white collar scammers have used to make a buck (or thousands).

    Check Fraud

    Thanks to computer technology, it is easier than ever to create fake checks and use them to steal a little bit of money at a time. Corporate logos are available everywhere. It is easy to photoshop images of the company’s headquarters and its logo into an official-looking check. A phone call to their accounting department will get you the bank account and routing numbers to put at the bottom of the check, and you can find press releases with the CEO’s signature. Hey, presto – there it goes at the bottom of the check. If you keep the amounts small – under $2,000.00 – it will go through a machine scanner instead of being looked at by a human. This will net a few thousand dollars a time, and probably won’t be discovered for months – maybe even years.

    Pump and Dump

    This technique has been used before in the stock market and is now highly regulated. But it has now moved onto the digital frontier, with cryptocurrency. Scammers buy large sums in cryptocurrency and then, using social media, spread rumors (and lies) about who is buying in (think Warren Buffett). Then, once the trading hits a high, they dump their holdings for a massive profit, which then crashes the value of the currency.

    Money Laundering

    If you’ve seen Breaking Bad, then you know how important a good money laundering scheme can be to ensure the success of a lucrative criminal enterprise. Lately, some of these schemes have been using prepaid debit cards or gift cards – purchasing dozens at a time that can be resold or transferred more easily. Doing purchases this way is harder to trace than paying money into an account. Another easy way to launder money is to physically move out of the country into another place with much more lenient banking laws. Then you can just deposit money more easily into those accounts, and transfer as necessary to local accounts when needed – or just purchase items with the foreign currency.

    Offshore Tax Havens

    Much of the world’s wealth is stored in tax havens, including Switzerland, Singapore, Hong Kong, Panama and small areas of Europe. Usually, someone will set up a shell corporation which looks like a legitimate business but will send fake invoices, which will be paid through various bank accounts to the shell company. The paper trail makes everything seem legitimate, even when it’s not, which makes it very difficult for law enforcement to determine whether or not these transactions are illegal. Some estimates claim that 8 percent of the world’s wealth is stored in these offshore accounts – in the neighborhood of $8.6 trillion. And thanks to technology and digitized banking systems, it is easier than ever to move and access money in different countries from the comfort of your own home.

    White collar crimes take savvy, confidence and know-how, and often it is individuals who already possess power and wealth to capitalize on the system and turn an illegal profit for themselves. Tracking and prosecuting white collar crimes is difficult, but law enforcement and the federal government have recently invested money and time into pursuing the worst white-collar criminal offenders in the country.

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