Legal Matters In The News: High-profile White Collar Cases

White-collar crime is not a new phenomenon

White-collar crime is not a new phenomenon. However, because of several high-profile cases that have been scrutinized by the press over the past two decades, they have drawn more attention. During difficult economic times, cases involving high-profile figures such as Bernie Madoff, Sir Allen Stanford, Kenneth Lay, and Michael Milken seem to incite the publics anger. Even though white-collar crimes are generally not violent in nature, the idea that someone cheated another out of their hard-earned money does not sit well with the majority of Americans.

That is particularly true of Bernie Madoff, convicted of operating an elaborate multi-billion dollar Ponzi scheme. A Ponzi scheme is a type of financial investment fraud that offers an investment product and a too-good-to-be-true short-term return that similar legitimate products cannot guarantee in order to lure new investors. Unfortunately, those high returns are not real. Instead of seeing actual profits, investors are being paid from monies generated by new investors. It could go on forever, but the larger a Ponzi scheme grows, the more new money is needed in order to pay existing investors and it can become difficult to maintain. However, by some accounts Madoff may have been running his scam for well over 20 years.

Madoff was convicted on 11 felony counts of fraud, which resulted in the maximum sentence of 150 years. He was also ordered to pay restitution to his victims. The government seized and intends to sell the majority of his personal property, much purchased as a result of his illegal activity, and pay those who lost money. However, given that the total amount lost by investors exceeds $65 billion dollars, the likelihood that everyone will be compensated all monies lost are slim.

Not all white-collar crimes involve financial investments. Tax crimes such as tax evasion and fraud are another type of white-collar crime that has convicted many well-known individuals. Federal prosecutors were unsuccessful in prosecuting mobster Al Capone for the numerous murders attributed to him, but were able to send him to prison for tax evasion. More recently, actor Wesley Snipes received a three-year sentence for failure to file tax returns owing more than $15 million. In addition to the criminal trial, the Internal Revenue Service filed a civil suit seeking repayment of taxes and interest owed.

These are just a few examples of white-collar cases involving high-profile individuals that have fascinated the country. Statistics indicate that white-collar crimes are on the rise; therefore, the public is likely to see more of these types of stories in the news in the coming years.

by: Daniel Beasley

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