White-collar crime soars, but prosecutions plummet

| Mar 3, 2021 | White Collar Crimes |

White-collar crime is fairly common in New York and around the country, but not many people are actually prosecuted for committing offenses like embezzlement, bribery or fraud. U.S. attorneys prosecuted just 37 executives from companies with more than 50 employees for committing white-collar offenses in 2018, but they sent almost 19,000 people to prison for committing narcotics offenses that same year. Seizures and penalties are also declining. The Department of Justice has gone from levying $3.6 billion in penalties each year to collecting just $110 million, and the amount of illegal profits seized by the Securities and Exchange Commission has fallen by about 50%.

Changing priorities

U.S. attorneys are not prosecuting white-collar crimes because federal agents are not making arrests. In the years following the Sept. 11 terrorist attacks, the FBI reassigned about a third of the agents it had tasked with investigating corruption and fraud on Wall Street. The amount of money the IRS is allocated to deal with tax evasion has fallen by 23% during the last 10 years, and a squad set up to investigate the wealthiest Americans only has enough agents to conduct about 18 audits each year.

Low-hanging fruit

This lack of money and personnel has led federal agencies like the FBI, IRS and SEC to focus on crimes that are easy to investigate and prosecute. They pursue low-level offenders who leave easy-to-follow paper trials instead of wealthy individuals who are suspected of tax fraud and embezzlement by sending their money to offshore tax havens and using shell companies to conceal their activities.

Plea negotiations

When an individual is arrested for committing a white-collar crime, prosecutors might work toward a negotiated settlement to avoid the costs of a trial. During plea negotiations, experienced criminal defense attorneys may ask for significant concessions in return for a guilty plea and swift resolution. A defendant’s attorney may also mention mitigating factors like remorse and a willingness to make restitution.

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