Unlike the majority of supposed blue-collar crime, crime committed against property or person, where violence is usually employed against a victim or a victim’s property, white-collar crime is usually non-violent. While many who commit blue-collar crime come from disparate backgrounds and socio-economic standing, with a wealth of motivations to commit their crimes, white-collar crime has come to be defined by criminologists as “a crime committed by a person of respectability and high social status in the course of his occupation.”
White-collar crimes always involve money, and employ embezzlement, fraud, and various other schemes that make the perpetrator wealthy through their victims’ financial loss. Though there is white-collar crime affecting the financial well being and livelihoods of millions each and every day, here are some of the most notorious high profile cases of white-collar crime in the past century.
10. Aviv Mizrahi
A relatively wealthy electronics wholesaler, Aviv Mizrahi had a purported net worth of a few million dollars, making him and his business a prime candidate to secure loans from various banks. The problem was that Mizrahi had in fact falsified much of his financial portfolio, exaggerating some numbers and completely lying about others. By the time the banks that had loaned him money got wise to him, Mizrahi had already defrauded them of $33 million. The FBI issued a warrant for Mizrahi’s arrest on charges of bank fraud in 2012, but he is believed to have fled to Israel and remains at large from U.S. authorities.
9. Jerome Kerviel
In three years, French banker Jerome Kerviel lost nearly $7 billion in investors’ money. During 2007, Kerviel traded in anticipation of falling market prices, and then began concealing his trading by creating losing trades on purpose in order to offset gains. Though the bank Kerviel worked for, the Société Générale, claims they had no knowledge of the banker’s activities, it has been reported that his trading made the bank an estimated profit of nearly $2 billion. Add to the fact that Kerviel didn’t profit himself from his deeds and those claiming he is merely a scapegoat for the bank may not be far off the mark.
8. Martin Frankel
When your investment banker uses astrology to inform his trading decisions, you may have a problem on your hands. Though Martin Frankel had been barred from stock trading numerous times and had to eventually change his name to David Rosse and set up a Catholic foundation in an attempt to discredit the accusations against him, these and the SEC’s suspicions didn’t stop Martin Frankel from succeeding in defrauding and embezzling more than $200 million from numerous state insurance companies. After fleeing the U.S. for a few years, eventually Frankel was caught in Germany, and in 2002 plead guilty to 24 counts of financial crime.
7. John Rigas
Founded by World War II veteran John Rigas in 1951, at one point Adelphia Communications was one of the largest cable companies in the United States boasting 5.6 million customers in over 30 states. The problem with Rigas’ Adelphia Communications was that the company was not reporting its debts and falsified profits of nearly $2.3 billion. Furthermore, Rigas and his sons also failed to report over $3 billion in investments they had received. It was also discovered that Rigas and his sons used millions of dollars in corporate funds for personal use. John Rigas was sentenced to 15 years in prison in 2005.
6. Charles Ponzi
Anyone with even a passing interest in the news has heard of the “Ponzi scheme”, but they may not have heard of Charles Ponzi, the infamous white-collar criminal for which the investment fraud is named after. In the 1920s Charles Ponzi procured a large number of investments to buy discounted postage coupons, and then went ahead and amassed larger investments from even more investors. Instead of the initial investor’s money being paid back on returns from the sale of the postage coupons, it was instead paid back by money from the second wave of investors, all while Ponzi pocketed $20 million dollars for himself. Charles Ponzi was eventually found out and spent years in jail before dying penniless.
5. Jack Abramoff
A white-collar criminal and political lobbyist, Jack Abramoff was not only the architect of his own ruin; he also managed to send an Ohio Congressman to jail and force the U.S. government to create an entire joint governmental task force to investigate his misdeeds. Though the wealth of legal information and speculation of all of Abramoff’s misdeeds are more fitting of a novel than this list, ultimately Abramoff was convicted of defrauding Native American tribes, who were his own clients, of millions of dollars as well as bribing government officials, most notably Ohio Republican Bob Ney. For his crimes Abramoff received six years in prison and was ordered to pay $25 million in restitution.
4. Tyco International
Tyco, the international corporation known for manufacturing a vast array of goods, was a solid stock investment for years until the company found itself at the center of a massive stock scandal in 2002. The top executives of the company had been stealing shareholders money from the company for years, selling unauthorized Tyco stock to the tune of $450 million, and then claiming them as bonuses, in order to fund their extravagant lifestyles. The executives’ crimes eventually came to light in 2002 and Tyco’s stock fell roughly 80% in a month and a half. While it took two trials to finally convict those behind the Tyco stock scandal, each received up to 25 years in prison, all the while maintaining their innocence.
3. Bernard Ebbers
Before there was Bernie Madoff there was Canadian businessman Bernie Ebbers, the former title holder and architect of the biggest financial scandal in U.S. history. Considered the tenth most corrupt CEO in American history, Ebbers was the CEO of WorldCom, a telecommunications company that essentially looked to be on the right track to wealth and success. Though Ebbers received many accolades for WorldCom’s acquisition of another telecom company, MCI in the late 1990s, trouble began soon after. In 2000, as WorldCom stocks began to decline, so did Ebbers’ fortune, as much of what he owned was purchased with loans that used his stock in WorldCom as collateral. Ebbers also borrowed a further $400 million from WorldCom in order to buoy his other failing business ventures. Ultimately, through negligence or callousness, Ebbers was accused of defrauding WorldCom of $11 billion and sentenced to 25 years in prison.
2. Bernie Madoff
If nothing else, Charles Ponzi left a legacy and template for future white-collar criminals, perhaps none more famous than Bernie Madoff. Madoff used the Ponzi scheme for so long and to such an astonishing effect that, all told, he bilked investors of nearly $800 million. Beginning in the 1970s, Madoff would acquire money from investors with promises of massive returns on future investments, but in reality, instead of investing the cash, he would put it into a bank account of his own. When one of his investors wanted some of the money they had invested in Madoff, he would draw on his wealth of fraudulent capital and give them pieces of their investments. Once the money began to thin out in the earlier 2000s and Madoff was unable to repay his investors, authorities began to investigate his business practices, resulting in a total of 11 charges against him and 150 years in jail.
The name Enron has become ubiquitous with white-collar crime. At one point in time, the Houston, Texas-based energy company was the seventh largest company in the United States. The method by which Enron achieved that distinction however, was less than honest. By using shell corporations to fabricate profits and deceptive accounting practices, Enron kept millions of dollars worth of debt hidden from investors and the market as a whole. For a time Enron remained undiscovered, but by 2001, the company’s complex system of lies unravelled and Enron found itself in debt by the billions. Enron stock plummeted from $90 a share to less than 70 cents, but not before company executives could steal millions of dollars while subsequently bankrupting Enron’s shareholders and investors. In the aftermath, several high level employees of Enron served prison time, but the founder, former owner and Enron architect died before serving his 45-year prison term.