By: Faiza Chappell
White-Collar Crime is a catch-all phrase used to describe a type of crime that is committed by people in the corporate world. Such crimes include tax evasion, insider trading, insurance fraud, bribery, embezzlement, and money laundering. Most white-collar crimes are investigated and prosecuted by the government. The leading federal agency that investigates these crimes is the Federal Bureau of Investigation (FBI). Other leading agencies include the Secret Service, Internal Revenue Service (IRS), and the Postal Service. A recent report from Syracuse University’s Transactional Records Access Clearinghouse, found that white-collar criminal prosecutions have decreased about 50% in the last eight years. White-collar criminal prosecution is trending in a direction that is estimated to reach the lowest level since 1986.
There is no clear explanation as to why white-collar crimes are being prosecuted less. However, other prosecutorial trends and recent Congressional acts may play a role. For example, (1) post-September 11th, resources have been diverted from white-collar crime investigations to investigating terrorism, (2) there has been a decrease in the IRS budget for IRS-referred criminal prosecutions, and (3) the Department of Justice (DOJ) has become more risk-averse when dealing with white-collar crime, making federal attorneys more inclined to settle.
Furthermore, on October 8, 2019, the DOJ made major changes related to the enforcement of white-collar crime through the creation of new guidelines. Assistant Attorney General Brian Benczkowski introduced the guidelines, and an accompanying questionnaire, with the intention of “promoting transparency in the DOJ, allowing prosecutors to utilize a more uniform set of considerations and give companies looking to resolve matters greater insight into prosecutors’ thinking.” The guidelines include: (1) new guidance on how prosecutors should evaluate requests by corporate defendants for a reduction in fines and penalties based on a stated inability to pay; and (2) the restructuring of DOJ’s Securities and Financial Fraud Unit as the Market Integrity and Major Frauds Unit.
These guidelines positively serve businesses by encouraging prosecutors to assess “fair and sensible” penalties and punishments for corporate defendants. Through this new system, prosecutors are urged to consider the collateral consequences of fines that may be beyond the means of a corporate defendant, such as the impact on pensions, employee jobs at a company and product shortages that may cause disruption to the larger market. Prosecutors are also urged to consider whether a proposed fine will impair the organization’s ability to provide restitution to any victims.
There are two arguments on opposite sides of the spectrum. On the one hand, many are taking the side of the corporations and offenders in a rather criminal “defense friendly” way. They see the prosecution of white-collar criminals to be no different than prosecuting indigent populations. The decrease in prosecuting white-collar criminals is a step towards decreasing the incarceration rate in the U.S. This perspective underscores that such crimes will not stop being committed if those individuals are being prosecuted in the flawed criminal justice system, thus alternative forms to incarceration are being considered. However, it is important to note that there are differences in socio-economic backgrounds and other relevant facts that add to the prosecution of incarcerated individuals. Conversely, many are arguing that white-collar crimes are still being committed at a very high rate, but are not being investigated if they “don’t happen to intersect with a special counsel investigation”.
of the main reasons it has become incredibly difficult to prosecute such crimes
is because responsibility is often impossible to pinpoint in corporate
settings. Former Deputy Attorney General Sally Yates stated, “In modern corporations, where responsibility is often
diffuse, it can be extremely difficult to identify the single person or group
of people who possessed the knowledge or criminal intent necessary to establish
proof beyond a reasonable doubt.”
It will be interesting to see if pinpointing corporate responsibility could
increase the rate of white-collar prosecutions in the future.
 White Collar Crime, Georgetown Law, https://www.law.georgetown.edu/your-life-career/career-exploration-professional-development/for-jd-students/explore-legal-careers/practice-areas/white-collar-crime/
 See White Collar Prosecutions Fall to Lowest in 20 Years, TRAC Reports, (May 24, 2018) https://trac.syr.edu/tracreports/crim/514/
 Catherine Rampell, We’re About to Hit a New Record Low for White-Collar Prosecutions, Wash. Post, (Sept. 27, 2019) https://www.washingtonpost.com/opinions/2019/09/27/were-about-hit-new-record-low-white-collar-prosecutions/; see also White Collar Prosecutions Fall to Lowest in 20 Years, TRAC Reports, (May 24, 2018) https://trac.syr.edu/tracreports/crim/514/
 Catherine Rampell, We’re About to Hit a New Record Low for White-Collar Prosecutions, Wash. Post, (Sept. 27, 2019) https://www.washingtonpost.com/opinions/2019/09/27/were-about-hit-new-record-low-white-collar-prosecutions/.
 DOJ Announces Changes in White-Collar Criminal Enforcement in the Interest of Transparency, JDSupra, (Oct. 14, 2019) https://www.jdsupra.com/legalnews/doj-announces-changes-in-white-collar-37465/.
 Brian F. McEvoy, Brian Rafferty & Michael M. Besser, DOJ Announces New Guidelines to Assist Prosecutors in Assessing Fair and Sensible Corporate Penalties in White Collar Cases, Nat. L. Rev., (Oct. 11, 2019) https://www.natlawreview.com/article/doj-announces-new-guidelines-to-assist-prosecutors-assessing-fair-and-sensible.
 Shane Ferro, America’s Problem is Not Too Few White-Collar Prosecutions, Above the Law, (Aug. 23, 2018) https://abovethelaw.com/2018/08/americas-problem-is-not-too-few-white-collar-prosecutions/.
 Sally Yates, Deputy Attorney General Sally Quillian Yates Delivers Remarks at New York University Law School Announcing New Policy on Individual Liablirty in Matters of Corporate Wrongdoing, U.S. Dept. of Just., Sept. 20, 2015, Remarks as prepared for delivery.