Columns White Collar Crime: Do The Harsh Sentences Fit The Crime?

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  1. In the age of hacking, information and identity theft and a host of other internet crimes, you don’t have to be a seasoned and hardened criminal to find yourself facing prison time. The term for cybercrime and similar non-violent charges is “white collar” which refers to criminal charges that can range from internet fraud, possession and distribution of copyright materials.

    For white collar crimes, the motivation is almost always financial or political. Hackers who have boasted about accessing top secret government and military information have found themselves sentenced to more time in prison than some murderers or drug traffickers. Sentences for white collar crime are calculated based on loss in terms of revenue. Therefore, if a hacker is responsible for jeopardizing the safety of military personnel or sharing digital collateral that is valued at millions of dollars, the sentence can quickly amount to fifty years or more in prison.

    In recent years defense lawyers and various organizations have been evaluating the sentencing procedure for white collar crimes and have debated the fairness of the typically harsh legal consequences for Americans who are in most cases, first time offenders.

    What is a White Collar Crime?


    The term “white collar crime” was first used in 1939 by a sociologist named Edwin Sutherland who defined it as “a crime committed by a person of respectability and high social status in the course of his/her occupation.” Today the term is used for charges of fraud or bribery, insider trading, cybercrime, copyright infringement, laundering, forgery or information and identity theft.

    Offenses that are classified as white collar crimes include:
    • Bankruptcy Fraud
    • Mortgage Fraud
    • Mass Marketing Fraud
    • Antitrust or Price Fixing
    • Money Laundering
    • Social Security Card Fraud
    • Identity Theft
    • Insurance Fraud
    • Piracy and Intellectual Property Theft
    • Healthcare Fraud
    • Securities and Commodities Fraud
    • Corporate Fraud
    • Bribery
    • Tax Evasion
    The reporting of white collar crimes is often sensationalized in the media as the accused can be high ranking officials, wealthy business owners, political figures and even celebrities. Since many examples of criminal activity are motivated by a lack of financial resources or poverty, white collar crime continues to fascinate the public as some of the wealthiest and most affluent people in the world are charged with criminal activities for financial gain.

    Headline Worthy White Collar Criminal Cases


    What do Martha Stewart, the Executives at Enron, and CEOs Timothy and John Rigas (Adelphia) have in common? They were all successful business capitalists who were prosecuted for illegal stock trading and investment fund embezzlement and were forced to serve time for their white collar crimes.

    The most recent headline grabbing charge of white collar crime was reported for H. Ty Warner, the billionaire owner and creator of the Beanie Baby franchise. Warner was found guilty of tax evasion and was forced to make restitution that summed $53.6 million dollars, which greatly exceeded the tax loss figure. Ty Warner faced a 46 to 57 month prison sentence and an additional $100,000 fine for proceedings. He receive a two year probation and community service order, given the fact that his civil restitution was ten times the amount of the federal and state tax loss.

    The light sentencing (albeit severe financial restitution) handed to H. Ty Warner was unprecedented as white collar crimes tend to carry significant prison sentences in addition to financial restitution. The court defended the sentence given the extraneous history of philanthropy and charitable works that Warner contributed to for decades prior to his first conviction. Critics claimed he “bought his way” out of prison whereas white collar crime reform parties felt the court leniency was appropriate given the unique circumstances of the case.

    Comparatively the sentencing for the Detroit area “Evil Doctor” (as the media has dubbed him) Dr. Farid Fata will not be as lenient. The doctor has been charged with fraud and other crimes after he provided fraudulent cancer treatment services and extorted money from medical insurance companies.

    The fifty year old doctor is facing fraud, money laundering and conspiracy charges which he pleaded guilty to in 2014. The prosecution for the case is seeking a 175 year prison sentence after Fata was accused of performing 9,000 unnecessary infusions and injections of a powerful drug to over 553 patients. Four insurance companies were also named for loss sustained as a result of Dr. Farid Fata’s fraudulent practice and billing for cancer treatment.

    The drug Rituximab is an aggressive pharmacological treatment for lymphoma but can dramatically impact the immune system, and is required to be used in limited doses of less than eight treatments. Fata is charged with giving patients the drug up to 96 times, and charging the insurance company for the excessive (and dangerous) course of treatment. Defense is asking for a moderated maximum sentence of twenty five years in prison.

    The Problem with White Collar Crime Sentencing


    How do you put a value on the cost of lost information? In cases where a criminal has stolen a set amount of money (for instance in theft or robbery) sentencing can be based partially on the monetary value of what was stolen.

    Criminal cases involving theft, prison sentencing follows a set guideline with light punishment for Class A misdemeanors and petty theft (typically less than $1,000) all way to grand theft which if accused as a first-degree felony offence, can carry a term of up to thirty (30) years in prison and a $10,000 fine. Restitution is often ordered with petty and grand theft cases including community service. Read “The Elusive Middle Ground for White Collar Criminals” by Peter J. Henning for The New York Times.

    How do you measure the value of stolen information or copyright? According to a private organization for sentence reform called Families Against Mandatory Minimums (FAMM) the sentence should fit the crime. Criminal defense attorneys agree that in most cases, the calculation of loss is obscure when determining appropriate sentencing.

    The American Bar Association published a report in 2013 dubbed the “ABA White Collar Report” that defines criteria that would more accurately and fairly determine appropriate sentencing. The calculation of financial loss (according to the report) should be combined with a measurement of culpability (the extent to which the accused is independently responsible) and an evaluation of the impact of the crime on victims.

    All these intricate factors can become too complex for the layman to understand. Hence, should you ever get involved in a criminal case, it would be best to hire an experienced criminal defense attorney from the state you reside in. If you’re a resident of Chicago, for instance, ask for references or look online for criminal defense attorney Chicago to know your options.

    In the meantime, you can expect some reform or amendment to the judicial sentencing guidelines for white collar crimes in the near future, and one that is based less on a formula of loss and more on cause and intent.

    (Image Source - 1)
    Legal Practice:
    Crime - White Collar Crime
    Jurisdiction:
    • US Federal
    • Other

    Robert Kerr

    Robert Kerr
    Robert J. Kerr is a top Chicago-based criminal defense attorney at Law Office of Robert Kerr, LLC. He concentrates not only in criminal defense but also in DUI defense, drug crimes, sex crimes and civil rights. His aggressive approach helps his clients protect their rights and he is always ready to provide timely information and accurate advice to them.

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