What qualifies as white collar crimes?

The term covers non-violent offenses committed for financial gain through deception or breach of trust. In San Diego, the same conduct can be charged in Superior Court under the Penal Code or in federal court under Title 18, depending on the victim, the money involved and whether mail, wires, banks or federal programs were used; federal district courts have jurisdiction over “all offenses against the laws of the United States” (18 U.S.C. § 3231). Our white collar defense page covers representation; this page explains the categories. Health care billing cases are covered on our healthcare fraud defense page.

Embezzlement and theft by employees

California defines it in one sentence: “Embezzlement is the fraudulent appropriation of property by a person to whom it has been intrusted” (Penal Code § 503). Value decides the level. Grand theft includes property “of a value exceeding nine hundred fifty dollars ($950)” (Penal Code § 487(a)), and an employee who takes from an employer commits grand theft when the takings “aggregates nine hundred fifty dollars ($950) or more in any 12 consecutive month period” (§ 487(b)(3)). Separate acts can also be added together “if the acts are motivated by one intention, one general impulse, and one plan” (§ 487(e)).

Fraud by mail, wire and bank

• Mail fraud. Up to 20 years (18 U.S.C. § 1341).
• Wire fraud. Up to 20 years, and up to “$1,000,000” or “30 years” when it affects a financial institution or involves disaster or emergency benefits (18 U.S.C. § 1343).
• Bank fraud. Up to “$1,000,000” or “30 years” (18 U.S.C. § 1344).

These statutes are the federal government’s main fraud tools because nearly every modern transaction uses a wire or a bank. Identity theft and credit card schemes are often charged under them alongside aggravated identity theft, which adds a mandatory two years (18 U.S.C. § 1028A(a)(1)).

Money laundering

Conducting a financial transaction with proceeds of “specified unlawful activity,” knowing they are criminal proceeds and intending to promote the crime or conceal the source, carries “a fine of not more than $500,000 or twice the value of the property involved in the transaction, whichever is greater, or imprisonment for not more than twenty years” (18 U.S.C. § 1956(a)(1)). Spending more than $10,000 of criminal proceeds in one transaction is a separate offense under 18 U.S.C. § 1957.

Securities fraud and insider trading

Willful violations of the Securities Exchange Act, including trading on material nonpublic information in violation of SEC rules, are punishable by a fine of “not more than $5,000,000, or imprisoned not more than 20 years, or both” for an individual (15 U.S.C. § 78ff(a)). The same conduct also carries civil SEC enforcement exposure.

Bribery and public corruption

Corruptly giving or receiving anything of value to influence a federal official act is punishable by a fine of up to “three times the monetary equivalent of the thing of value” or “not more than fifteen years,” and the official “may be disqualified from holding any office of honor, trust, or profit” (18 U.S.C. § 201(b)).

Theft of trade secrets

Taking a trade secret “with intent to convert” it “to the economic benefit of anyone other than the owner” is a federal felony punishable by up to 10 years (18 U.S.C. § 1832(a)). These cases usually start with a former employer’s civil complaint and a referral to the FBI.

Government program fraud

False claims to federal agencies are charged under 18 U.S.C. § 287 (up to five years) and false statements under 18 U.S.C. § 1001. Health care billing fraud carries up to 10 years (18 U.S.C. § 1347). Civilly, the False Claims Act imposes liability on anyone who “knowingly presents, or causes to be presented, a false or fraudulent claim” (31 U.S.C. § 3729(a)(1)(A)).

California’s aggravated white collar crime enhancement

When a person is convicted of “two or more related felonies, a material element of which is fraud or embezzlement,” involving “a pattern of related felony conduct” and losses over $100,000, California adds a consecutive prison term called “the aggravated white collar crime enhancement” (Penal Code § 186.11(a)(1)). Above $500,000, the added term is “two, three, or five years” (§ 186.11(a)(2)). The enhancement carries a fine up to “five hundred thousand dollars ($500,000) or double the value of the taking, whichever is greater” (§ 186.11(c)), and prosecutors may ask the court to freeze assets before trial (§ 186.11(d)(2)). It “shall not be imposed unless the facts … are charged in the accusatory pleading and admitted or found to be true” (§ 186.11(b)(1)).

How federal sentences are calculated

Most federal fraud sentences start from guideline §2B1.1, where the dollar loss drives the offense level. The Sentencing Commission explains that “the definition of “loss” is based on reasonably foreseeable pecuniary harm, including intended loss” (U.S. Sentencing Commission, Loss Calculation primer). The court then weighs the factors in 18 U.S.C. § 3553(a). Restitution is mandatory for “an offense against property under this title … including any offense committed by fraud or deceit” (18 U.S.C. § 3663A(c)(1)(A)(ii)), so the loss figure matters twice.

Civil and administrative consequences

A white collar case often has a civil twin. The False Claims Act adds “3 times the amount of damages” plus per-claim penalties (31 U.S.C. § 3729(a)(1)), and a conviction or civil judgment for fraud in obtaining a public transaction is a cause for debarment from federal contracts and programs (2 C.F.R. § 180.800(a)(1)). Professional licensing boards and immigration authorities may also act on the same facts.

Statute of limitations by category

• Most federal crimes: five years (18 U.S.C. § 3282(a)).
• Bank fraud, § 1014 loan fraud, and mail or wire fraud affecting a financial institution: “within 10 years after the commission of the offense” (18 U.S.C. § 3293).
• Federal tax crimes: generally three years, but six years for most fraud offenses (26 U.S.C. § 6531).
• California fraud and embezzlement felonies: “within four years after discovery of the commission of the offense, or within four years after the completion of the offense, whichever is later” (Penal Code § 801.5).

Common defenses

• No intent to defraud. Embezzlement requires a “fraudulent” appropriation (§ 503), and the federal fraud statutes require a scheme to defraud; good-faith business decisions, honest accounting errors and disputed contracts are not crimes.
• Value. The grand theft threshold in § 487 and the $100,000 and $500,000 tiers in § 186.11 make valuation evidence central.
• Time limits. Most federal offenses must be charged within five years (18 U.S.C. § 3282(a)); California fraud and embezzlement felonies generally run four years from discovery (Penal Code § 801.5).
• Unlawful searches. Records seized in violation of the Fourth Amendment can be suppressed.

Talk with the office about a white collar investigation

If you are under investigation or charged with a fraud, embezzlement or other financial crime in San Diego County, contact the office to talk with Vikas Bajaj, or call (619) 525-7005.

This page is attorney advertising and general information, not legal advice. Every case turns on its own facts.

Related guides: White collar defense · Federal crimes defense · Healthcare fraud defense · Theft crimes defense