What is White Collar Crime?

White-collar crime is not a new term. Edwin Sutherland, a North American criminologist, coined the term in 1949 to describe crimes committed by an individual, or groups of individuals, against a company or business.

There have been calls for heavier penalties and longer terms of imprisonment to punish offenders who commit white collar crimes. Indeed, Greg Medcraft, former chairman of the Australian Securities and Investment Commission, has urged governments to make Australia “a hellhole for white-collar crime.”

The Australian Government has now shown a commitment to adopt many of the recommendations made by the Senate Inquiry into white collar crime and, with the release of the Royal Commission into Banking, Superannuation and Financial Services Industry’s interim report in September 2018, it is anticipated that there will be increased legislative and policy reform in this area. This makes it essential to know about white collar crime and how it can affect you.

What types of offences fall under the scope of white collar crime?

Offences that categorised as white collar crimes include:

• bribery
• copyright infringement
• cybercrime
• fraud (such as Centrelink fraud)
• identity theft
• tax invasion
• insider trading
• money laundering

An example of white collar crime reported in the media is the recent $165 million fraud committed against the Australian Taxation Office.

Not a victimless crime

There is often a misconception that white collar has no victims and such crimes have traditionally been ignored. This is because white collar crime is different from conventional property and violent crimes that we are used to hearing about in the media. However, the impact of white collar crime is significant and can have severe consequences on you and your business.

Such crimes also have a big impact on the community. White collar crimes can lead to the increased prices of goods and services and an increase in interest rates. While the true prevalence of white collar crime are unknown, estimates show that such crimes have an enormous impact on the Australian economy. As noted previously, it has been reported that more than half of Australian organisations have been victims of white collar crime in the past two years and a third of these organisations lost more than $1 million. It is estimated that corporate crimes cost the Australian economy more than $8.5 billion a year and account for 40 per cent of the total cost of crime in Australia. Others, however, suggest that these figures are a gross underestimate of the true prevalence of such crimes.

Despite its prevalence, there is the public generally believe that white collar crime is less devastating than more conventional offences such as burglary and shop-stealing, which the figures show is not the case. Indeed, white collar crimes are much more common than you might think.

Who are the main regulatory bodies?

There are several regulatory bodies in Australia responsible for investigating and prosecuting corporate misconduct. ASIC (Australian Securities and Investments Commission) is Australia’s main corporate regulator that has broad wide investigation powers. For example, ASIC has the power to compel a company to provide documents and information, attend an examination, and have powers to conduct a search of a business’s premises with a search warrant. Make sure you keep a copy of documents that you provide to the regulatory body.

ASIC’s authority is set out in legislation, most notably the Australian Securities and Investments Act 2001 and the Corporations Act 2001. The powers of ASIC are predicted to expand given the Australian Government’s intention to improve public confidence in combating corporate crime.

Other regulatory bodies, many of which ASIC works in conjunction with, include the ACCC (Australian Competition and Consumer Commission), the AFSA (Australian Financial Security Authority), and the ATO (Australian Taxation Office).

What happens if I am being investigated for a white collar crime?

Being under investigation by ASIC or other regulatory body can be extremely distressing. Because non-compliance can be a criminal offence, it is imperative that you do not ignore a notice from the authorities and be compliant.

If you do not have sufficient time to comply with a request, you should contact the regulatory body immediately. Your lawyer can do this on your behalf.

Do not assume that the investigation has ended just because you do not receive a response. There may be long delays between your compliance and a response.

How can I be sure that the person contacting me if from an official regulatory body?

Unfortunately, there are many scammers out there who may contact you pretending to be from a regulatory body such as ASIC. If someone contacts you claiming to be from an officer from a regulatory body, they should have with them an authorisation card. The officer should provide you with adequate information about the reason for their contact and tell you what the matter is about. If you have doubts, also ask the officer for a copy of their business card or ask to speak to their manager.

What happens if I do not comply?

Failure to comply with ASIC or other regulatory body can lead to serious fines and/or imprisonment. For example, under section 63 of the Australian Securities and Investments Act 2001, you can be fined up to $21,000 and/or imprisoned up to two years if you intentionally or recklessly fail to comply with a notice issued by ASIC.

ASIC may also obtain a warrant giving them permission to search your premises and seize any documents. if they are not found on your premises, they can demand you to give details of where the documents are being held.

Under section 19, ASIC also has the power to compel any person to attend an interview (referred to as an “examination”) if they suspect that they have information that is relevant to the investigation. This can include employees of a business but also lawyers, accountants, and even family members. You must truthfully answer all the questions asked during the interview unless the information is protected by legal professional privilege. Your lawyer, who can be present during the interview, can help you identify what communications may be privileged and explain why.

Failure to attend an examination without a reasonable excuse is a criminal offence, and the regulatory body may ask a court to order compliance. Contact the regulatory body or speak your lawyer immediately if you cannot attend an interview.

Should I see a criminal defence lawyer?

If you are under investigation or have been charged with any white collar crime, it is essential you seek legal advice from an experienced criminal defence lawyer with expertise in the field.

A specialist lawyer will be able to advise you about your rights and your legal position, guide you through the process, and work to ensure you achieve the best possible outcome.