south carolina supreme court columns white collar crime

White-Collar Crime: Famous Cases

White-Collar Crime is typically defined as a non-violent financially motivated crime caused by businesses or government officials through varied forms of deceit or fraud. Due to the methods of conducting the crime, through the complex levers of business or government, white-collar crime is many times difficult to prosecute or even discover. It can be done by individuals, a group of people, or whole governance structures within companies. Finding and prosecuting these crimes is usually done through complex investigations by government agencies like the FBI and others. These investigations can take many years to complete because the criminals are in high levels of society and the crimes have been concealed well.

Some forms of white-collar crime include bribery, embezzlement, fraud, identity theft, money laundering, tax evasion, and others. In this article, you can read about some of the most famous cases of white-collar crimes including one of South Carolina’s most famous political corruption scandals.

The Enron Case:

During the late ’90s and early 2000s, a market boom was occurring. Recently founded as well as established companies joined in on a market frenzy that saw their stock prices jump and keep jumping. This market boom was dubbed the “dot-com bubble” because analysts saw it as being driven by a spread in technology and the internet. A company named Enron emerged as a promising giant during this frenzy. This company, based in the energy sector, was named Fortune Magazine’s most innovative company for multiple years during the ’90s. But at the turn of the century, Enron filed for the largest bankruptcy case in US history at the time. Enron revealed itself as one of the biggest cases of white-collar crime ever. It brought down not only itself but also its accounting firm, Arthur Andersen.

How did this happen? Through large-scale accounting fraud. A mix of a corporate culture of greed and fraud led to large-scale phony accounting which led to billions being lost by investors as well as employers. Through this high-level accounting fraud, Enron reported billions of dollars of revenue that simply did not exist. It also hid billions of dollars of risky debt. A perfect combination for a catastrophic fall. 

Bernie Madoff:

As synonymous with fraud as Enron is the case of Bernie Maddoff. Maddoff held a position of high regard for a long time. He was well known in the financial industry. His hedge fund was at the time one of the biggest in the country. He reported year-end market returns that exceeded even conservative estimates. In a swift moment, it all came crashing down.

Behind the mirage, Madoff was in reality a fraudster, maybe the richest in history. As the 2008 financial collapse was occurring, investors with Madoff began to withdraw funds. The thing is, there were no funds to withdraw. Madoff spent his career telling his clients that their investments were paying off and growing, but in reality, as soon as someone deposited money with his firm, he would take it out and put it in his own bank account. This billion-dollar Ponzi scheme cost investors billions of dollars and landed Madoff life-in-prison. 

The Lost Trust Case:

South Carolina’s political arena was rocked by a series of scandals during the 90s. These scandals seemed straight out of a Hollywood movie. Drugs, bribes, and politics collided to form what is the biggest political scandal in the Palmetto State’s history. 17 politicians were tried and convicted by the federal and state government because they were involved in a variety of white-collar crimes. So what happened? In 1989 the FBI secured the cooperation of former politician and lobbyist Ron Cobb. This lobbyist turned drug dealer tried to buy a kilo of cocaine in a sting operation. The FBI used his cooperation to open an investigation into the illicit world of backroom political deals. What they uncovered changed the state forever. This case involved a 10-year operation that led to a series of consequences in the state’s political system. 

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