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Kelsch Law Firm Legal Blog

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The 3 Infamous White Collar Crimes

People may get the term "white collar crime" confused by involving corporations, such as when BP had to settle. However it's roots are in crooked individuals. In 1939, Edwin Sutherland defined “white collar crime” as a "crime committed by a person of respectability and high social status in the course of his occupation." Today, usually white collar crimes are acts against humanity that are a financially motivated, nonviolent crime committed for illegal monetary gain.

We have all heard of Martha Stewart, Tom Petters, and Bernie Madoff, but most people only know that they were involved in a huge scandal for monetary gain, unknowing of the consequences that the crimes committed have on our economy. In this blog we will discuss the three most committed white collar crimes in America, some standout cases, and the impact they have on American society as a whole.

Martha Stewart Heading to JailMartha Stewart
Martha Stewart has become a figure of success by building her brand of Martha Stewart Home Living Omnimedia through hard work and creativity. She may have upheld her reputation, but she also represents a corrupt financial system. In 2002 Martha was invited to join the NYSE’s 27 member board of directors. In 2004, she became entangled in the ImClone insider trading affair when her friend Sam Waksal informed her that his company ImClone’s cancer drug was rejected by the FDA. She had her broker sell her 4,000 shares before the news hit and later found guilty of insider trading. This bombshell could have easily spiraled downward to the point where she could have been on a list like 4 bankruptcies you didn't see coming. When you have a corrupt board member participating in illegal activity, it puts a lack of faith in the open exchange market. It ruins the implicit trust between a company and its investors. It’s just not good biz.

Tom Petters MugshotTom Petters
Among the assets of Petters Group Worldwide were Sun Country Airlines, Polaroid, Petters Warehouse Direct, 3,200 employees and over 150 companies in investments or full ownership. He was a smooth talking salesman who coerced and deceived religious charities to international hedge fund managers. Petters sold promissory notes to investors around the world offering a 15 to 20 percent return. Petters forged documents and product orders to produce a front, resulting in the exposure of a $3.65 billion Ponzi scheme. Investigators are still weeding out the clean money from the bad to determine the full effects of this abomination, one thing is for certain, and he will most likely spend the rest of his life behind bars.

Bernie Madoff

Bernie with the marshallsWith a grand total of $64.8 billion, Bernie Madoff admitted to committing 11 counts of fraud and other federal crimes in the largest Ponzi scheme in history. Bernie Madoff’s investment group has been under scrutiny from the Securities and Exchange Commission since 1999, but nothing materialized due to its top 10 market makers on Wall Street. Over $50 billion in losses to retirees, non-profits, and society types has caused a ripple effect forcing many companies to shut down, at least temporarily.

What do these cases prove?

These white collar crimes expose a flashlight on the ocean of corruptness on Wall Street. There are obviously schemes and crimes committed like this every day, and probably at this very moment. A false economic system is not likely to last forever and in definite need of repair in light of recent events. Unfortunately, there isn't a lot that our legal system can do except tighten the loopholes that currently exist. The penalties are already steep too, which points out the root of this problem is in fact not the legal system, but greed itself. If you are or know someone who is involved in white collar crime, you'll need to contact your attorney. If you reside near Minneapolis, MN you can contact one experienced in white collar crime, such as FSSK.

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