White-Collar Crime
Summary
A white-collar crime is a non-violent criminal activity involving various victims. According to recent studies, it has been known to include crimes such as tax evasion, identity theft, bribery, embezzlement, and insider trading. As such, as evidenced above, the main objective of the crimes is usually to benefit financially. The crimes usually feature deceit, concealment, and violation of trust. Based on these cunning and complex strategies being involved to undertake the crimes, the crimes are mostly executed by the rich and also the educated people in society. Although several cases of such crimes exist, the most recent and common example is the Well Fargo accounts fraud case that took place over a prolonged period (FBI). Wells Fargo is one of the biggest financial institutions in the U.S. The scandal was revealed in 2016, although it had been happening for a long period, having begun in 2002. The process began after the executives of the bank prioritized rank-and-file of banking personnel. The aggressive approach led to cross-selling to increase the revenue of the bank. Deception emerged after bank staff created millions of saving and check accounts for clients without their acknowledgement. The staff used the pin that they set to a default of ‘0000’ to allow them to control the accounts remotely. Customers realized the extra unauthorized charges they were being charged and raised an alarm that led to unveiling the scandal.
In the happening of this scandal, was Gerald who was primarily engaged in securities together with insider trading fraud. Apart from this, the scandal encompassed the hiding of losses that were revealed through the fraudulent stock reports that were being filed. Alongside this, other directors were not left behind as they used their authority within the organization to push the stock values to potential buyers while knowing they were of no value. All these actions show that Gerald together with other directors used their power, knowledge, and cunningness to manipulate both the market and people (buyers and investors) for personal gain. Eventually Gerald through his actions, he lost the trust of both his friends and family as a result. Since the unveiling of the scandal, the bank has dealt with civil and criminal lawsuits that have resulted in a $3 billion settlement of criminal charges (Flitter). The amount points to the big loss the bank is undergoing besides ruining its reputation.
Crime Assessment
The Wells Fargo case is a typical example of a white-collar crime involving the low-level employees of the bank and the depositors (customers). The crime is similar to other white-collar crimes since the motives are the same. For instance, Bernard Madoff established a Ponzi scheme that collected money from unsuspecting individuals for his financial gains. The scandal happened through one of the Wall-Street companies (Legal Information Institute). He is currently serving his 150-years’ jail term. A similar scandal is that of Enron and WorldCom. In the Enron scandal, the company that had initially reported profits successfully over the years started to fabricate profits through fraud schemes. The company used off-balance-sheet special purpose vehicles to hide the growing debt and toxic assets obtained from creditors as well as investors. The fraud did not last for long after the company filed for bankruptcy and the stock price drastically fell to $0.67 from $90.
White-collar crimes such as that of Wells Fargo are associated with educated and affluent individuals. Respectable people with a high social status commit the crime. In the cases, the victims falsified financial information to deceive investors or employers. Employees at Wells Fargo engaged in self-dealing in which they acted in their best interests rather than the interests of their customers to show their executives that they were meeting their targets to earn a commission on top of their salaries. In essence, the crime proved to be costly to the company, which has to pay damages to affected parties as well as deal with a ruined reputation.
Works Cited
FBI. “What We Investigate: White-Collar Crime.” 2020. https://www.fbi.gov/investigate/white-collar-crime. Accessed 24 May 2020.
Flitter, Emily. “The Price of Wells Fargo’s Fake Account Scandal Grows by $3 Billion.” The New York Times, 21 Feb. 2020. https://www.nytimes.com/2020/02/21/business/wells-fargo-settlement.html. Accessed 24 May 2020.
Legal Information Institute. “White-Collar Crime.” 2020. https://www.law.cornell.edu/wex/white-collar_crime. Accessed 24 May 2020.