Insider trading is illegal, even for members of Congress. Existing white collar crime laws likely already included members of Congress, but the Senate acted to make that clear this week by passing the Stop Trading on Congressional Knowledge (STOCK) Act. The act passed after a 96 to 3 vote, making it almost a sure thing to get through the U.S. House of Representatives. If passed, it will ensure that the same rules that prevent private citizens from acting on insider information apply to members of Congress and the executive branch.
With efforts to stop Medicare fraud, mortgage fraud and securities fraud drawing national headlines, the Federal Bureau of Investigation has reaffirmed its goal to target all forms of white collar fraud, including insurance fraud. In a recent press release, the FBI specifically mentioned several forms of white collar fraud that are common to the insurance industry. The FBI works with state and local agencies and regulatory bodies to investigate and prosecute people suspected of insurance fraud.
Efforts by federal prosecutors led to the indictment of seven individuals last week. The white collar criminal case surrounds the actions of a stock analyst and several of his friends. The group obtained inside information about Dell and its financial results and used that information to obtain roughly $62 million in illegal gains on the stock market.
A man who is accused of more than $32 million of insider trading is expected to plead guilty this week. Terms of a plea agreement regarding the white collar criminal charges against him have not been released. Federal prosecutors had charged the man with gathering inside information from a corporate lawyer, through a middle man, and using that information to make millions. He allegedly obtained information regarding pending merger agreements that had not yet been announced. Those agreements included the purchase of Sun Microsystems by Oracle Corp., as well as the purchase of Omniture Inc. by Adobe System Inc. Each deal netted him millions of dollars, according to prosecutors.
A Florida investment professional is facing charges in the U.S. District Court of Manhattan. The white collar criminal complaint alleges that he collected money by promising his investors that he could get them early shares in big name IPOs for Facebook and Groupon. He then used that money on personal expenses and to pay off his personal IRS tax liability. If convicted, the man faces up to 65 years in federal prison.
The Federal Trade Commission received as many complaints of identity theft in the first six months of 2011 as they did in all of 2010. Many of the stolen identities were used to commit tax fraud by filing income tax returns and collecting the refund from the IRS. More than half of the reports regarding stolen Social Security numbers originated in South Florida. Investigators have termed the upward trend as "alarming" and are struggling deal with this form of white collar crime.
Criminal sentences have been growing steadily more severe in nonviolent cases. White collar crime sentences may be reaching a peak as anger over the economic downturn is focused on people charged with financial crimes. A prominent case involving a convicted hedge fund executive could lead to the longest sentence ever recorded if federal prosecutors get their way.
A yearlong investigation by local and federal law enforcement has resulted in 49 people being arrested and charged with stealing identities (social security numbers and date of birth) and using them to obtain fraudulent tax refunds.
A Florida man recently pleaded guilty to mail fraud in connection with a $30 million white collar crime.
As part of the fallout of Bernie Madoff's massive Ponzi scheme, the court-appointed trustee has been trying to recoup money from a number of mutual fund and hedge fund companies that made billions off of the Ponzi scheme in order to pay back Madoff's victims.