Recently, the National White Collar Crime Center has taken the initiative to train New York law enforcement personnel in fighting white collar crime. The officers will receive training in combating felonies such as bankruptcy fraud, identity theft, and insurance fraud. The increased training is in response to a reported increase in the occurrence of white collar crimes, with over 60,000 cases reported last year. The organization is training 36 officials from all over New York State. The organization is starting to branch its training locations out from the metropolitan areas into less-populated areas like Utica.
Recently, the Connecticut-based hedge fund company SAC Capital Advisors pled not guilty to fraud in federal court in Manhattan, despite the prosecution's assertion that it had a large amount of incriminating evidence in its possession. Prosecutors alleged that they had things such as instant messages, electronic messages, court-ordered wiretaps, and recordings made consensually in their possession, which led to them charging the hedge fund with the felony of fraud. Specifically, the company is accused of wire and securities fraud, otherwise known as insider trading. The company is accused of creating an atmosphere that encouraged this kind of criminal activity. The company has announced that it will continue normal operations, and denied the charges against it.
Recently, it has been noted by attorneys specializing in white collar crime that offenders in New York and elsewhere are becoming savvier in using technology, making these offenses more difficult to uncover. In many white collar crime cases, a massive amount of electronic evidence is uncovered and law enforcement officials often simply do not have the resources to process it all. Also, many white collar offenders are using text messages or Skype rather than cell phones or e-mail to conduct the offense, thus evading phone wiretaps or traceable email messages.
Recently, a trend has been noted of corporations that are able to pay gigantic fines in order to avoid criminal prosecution. Many executives of these companies pay settlements to the Securities Exchange Commission (SEC) in order to avoid prosecution for white collar felonies. For example, Ralph Lauren, the U.S. fashion company, paid $1.6 million in fines to avoid prosecution for allegations that it bribed Argentinian officials to avoid customs inspections of its products entering into that country. Prosecutors in white collar crimes have used two main tools to pursue alleged offenders: non prosecution agreements (NPAs) and deferred prosecution agreements (DPAs). Both of these involve a statement of facts agreed to by both parties, a cash fine, and the appointment of a probation officer to prevent further criminal conduct in the future. Also, SEC Enforcement Division lawyers grant "consent decrees," which allow corporations to neither admit to nor deny wrongdoing. Critics allege that these tools allow corporations to buy their way out of criminal prosecutions.
Recently, a New York socialite known for her charitable activities was sentenced by a U.S. District Court to 19 months in prison for allegedly bilking several companies out of millions of dollars. The woman was charged with the felony of conspiracy to commit wire fraud. The charges came out of a scam carried out over the course of a decade, where the woman went to several companies and claimed to be able to get them access to new markets and business opportunities in exchange for money. The woman then used the money to support a lavish lifestyle. She was indicted for fraud in 2008, and turned her life around during this time period, opening her New York home to the poor and volunteering with a non-profit group that helps former inmates rebuild their lives. She introduced several letters of support detailing her lifestyle turnaround at trial. Despite her good deeds, however, she was still given a jail sentence, in addition to an imposition of $7 million in restitution to be paid to the victims.
Recently, a federal appeals court reversed a lower court's lenient sentence for conspiracy and money laundering of a chief executive of an Ohio technology firm that collapsed in 2003 due to alleged fraud. This sentence is evidence that defendants convicted of white collar felonies may receive more lenient treatment in the legal system than those convicted of other crimes. The judge in the case received letters of support from those who knew the defendant, and imposed a mere seven-day sentence for the crime of fraud, despite the fact that sentencing guidelines mandate an 8-10 year sentence based on the $18 million loss to the company's shareholders due to the fraud. The appeals court struck down the sentence, stating that the judge abused her discretion by taking into account factors that were not allowed in imposing sentences.
Recently, the attorney general for the State of New York filed a lawsuit against Credit Suisse, a prominent bank, for allegedly defrauding investors as to the quality of mortgage loans that the bank placed into mortgage-backed securities.
Recently, the New York District Attorneys Association formed a task force dedicated to reforming the state's laws against white collar crime. The task force will be comprised of 23 people, with both prosecutors and defense attorneys represented. The task force will recommend new legislation to close loopholes in laws against white collar crime, and to increase sentences for fraud, corruption and other felonies. Federal law is generally considered to be tougher on white collar crime than the laws of the states, and the task force convened by the DA's association is an attempt to remedy this. The ultimate aim of the task force is to modernize New York's laws and to bring them more in line with federal law.
Recently, a disgruntled former employee of the luxury designer brand Gucci was sentenced to up to six years in prison by the Manhattan Supreme Court for allegedly hacking into the company's computers and causing over $200,000 worth of damage. The felony charge carries a minimum of two years and a maximum of six years imprisonment. A computer engineer, the Gucci employee - allegedly using an electronic profile that he created for himself, erased computer files tampered with the computer servers, and crashed the company's e-mail system. The employee had been fired from Gucci for racking up over $105,000 in employee discounts, but was never accused of fencing merchandise.
The recent economic downturn has made investment fraud a hot topic these days in New York. It seems that every couple of weeks someone in the city is being charged with a high-profile white collar crime, and now four former employees of an investment firm based in Long Island are facing criminal charges of operating a Ponzi scheme. The criminal complaint alleges that over 4,000 investors lost $179 million as a result of what federal prosecutors say were misleading business practices.