White collar criminal investigations now typically involve evidence recovered from computers or from devices that store digital information. Often the value of this evidence is overstated by federal agents who may not have thorough understanding of computer forensics. Therefore, in all cases involving digital evidence, it is our practice to consult with a respectable computer expert to fully appreciate the real value of the “evidence,” which is often times exaggerated. Allowing this kind of evidence to go before a jury uncontested can be devastating and extremely prejudicial.
The Financial Crimes Section of the FBI focuses its financial crimes investigations on corporate fraud, securities and commodities fraud, mass marketing fraud, health care fraud, mortgage fraud, financial institution fraud, and money laundering.
The FBI has also prioritized investigating what it calls “high tech crimes,” which includes cyber-based terrorism, espionage, computer intrusions, and cyber fraud. The agency gathers and shares some of the information with both the public and private sector. These are the new priorities in FBI criminal investigations, although the agency continues to take the lead in bank robbery, kidnapping, and child pornography investigations.
White collar crime is a broad generic term for crimes dealing with commercial fraud, consumer cheating and swindling, insider trading, embezzlement and other crimes committed by business and professional people. The term was coined in 1939 by Edwin H. Sutherland, a sociologist of the symbolic interactionist school, in a speech to the American Sociological Association. In 1949, he defined the term as “approximately a crime committed by a person of respectability and high social status in the course of his occupation.”
Traditionally these crimes were committed through paperwork. Today they are overwhelmingly committed with a computer, typically involving the Internet. This has spawned what is generally referred to as “computer crimes” which is criminal activity associated with information technology’s infrastructure, including illegal access (unauthorized access), illegal data interception or interference (unauthorized damaging, deletion, deterioration, alteration or suppression of computer data), systems interference (interfering with the functioning of a computer system), misuse of devices, forgery (ID theft), and electronic fraud.
In brief, computer crimes involve activity in which the computer or network is the source, tool, target, or place of a crime—activity such as hacking, copyright infringement, child pornography and child solicitation.
White collar and computer crimes (or what has become known as “cybercrime”) are usually indicted and prosecuted at the Federal level because of the interstate nature of these offenses. Possible penalties for these offenses can include incarceration for a specific number of years to life imprisonment, generally determined by the U.S. Sentencing Guidelines. There are also fines for restitution, court costs, and damages suffered by the victims of these offenses.
In addition to the criminal sanctions, a defendant convicted of these can face potential civil litigation from private businesses or corporate entities trying to recover their economic loss; and even the death penalty where the computer is used to facilitate national security or treason activities.
In June 2010, the United States Supreme Court in Skilling v. United States vacated the “white collar crime” conviction of famed Enron defendant Jeffery Skilling because his federal indictment relied, in part, on what the Court called “an improper construction of the ‘honest services’ component of the federal ban on mail [and wire] fraud.” The Supreme Court said that the Federal fraud statute, Section 1346 of Title 18, United States Code, criminalizes just those schemes to defraud that involve bribes or kickbacks.
The two most common statutes used by Federal prosecutors in white collar corruption cases against state or local officials are the Hobbs Act and honest services wire fraud. The Supreme Court has held that extortion under the Hobbs Act by a state or local official is akin to bribery. That’s why the Court has limited the scope of honest services fraud, which in pre-Skilling days was applied to a broad array of fraudulent activities, to bribery or kickbacks. In effect, both the Hobbs Act and honest services fraud are “bribery by another name” in Federal corruption prosecutions of state or local officials. These statutes are utilized by Federal prosecutors because state or local officials do not qualify as Federal public officials under Section 201 of Title 18, United States Code.
The law is forever changing with respect to white collar and cybercrimes. These kinds of offenses frequently require criminal defense attorneys to use “forensic experts” and experienced investigators to fight the charges. Forensic experts are able to examine a defendant’s computer hard drive, and after careful analysis, can offer possible defenses. Investigators, including skilled CPAs, are able to research the volumes of paperwork and documents associated with these cases to determine the validity of what the Government is charging.
Corruption charges against state or local officials, on the other hand, often involve videotaped surveillance of charged criminal transactions, electronic intercepts, GPS tracking, cellphone pinging, volumes of incriminating documents, banking statements, and eyewitness testimony. Federal prosecutors will often dump huge amounts of discovery documents and information upon defense attorney in corruption cases to force them into cumbersome review, investigations, and the hiring of skilled experts to examine the maze of documentary evidence.
The United States’ estimated GDP in 2014 was $17.555 trillion. That’s inviting to many white collar and cyber criminals. In the Fiscal Year 2011, the FBI investigated 242 corporate fraud cases alone, resulting in 241 convictions. The agency secured $2.4 billion in restitution orders and another $16.1 million in fines in these cases. The figures sound impressive, but beneath them lie a host of innocent defendants ensnared in wholesale investigations.