FRAUD: One of the more common criminal white-collar violations is fraud in its various forms. F.S. Chapter 817 includes provisions relating to merchants, banking, corporate records, securities (see also F.S. 517.301–517.302), notes and mortgages, credit cards, insurance, franchises and distributorships, and false advertising.
EMBEZZLEMENT: A second fairly common crime is embezzlement, i.e., “the fraudulent appropriation of another’s property by a person to whom it has been entrusted or into whose hands it has lawfully come. 29A C.J.S. Embezzlement § 1 (1965).” State v. Mischler, 488 So.2d 523, 526 (Fla. 1986); see also In re Jacobs, 243 B.R. 836 (Bankr. M.D. Fla. 2000); F.S. 772.11. In a civil lawsuit for breach of fiduciary duty and/or conversion, the business litigator may find that a corporate agent has committed such acts with criminal intent for the gain of the corporation.
The Florida embezzlement statutes (originally found in F.S. 812.01–812.09 and 812.11) were repealed in 1972. The 1972 Committee Note stated that the crime of embezzlement is included in the consolidated crime of larceny. See Casso v. State, 182 So.2d 252 (Fla. 2d DCA 1966). The remaining embezzlement provisions of F.S. Chapter 812, as well as the larceny statute (former F.S. Chapter 811), were repealed in 1974 and are now prosecuted under F.S. Chapter 812, “Theft, Robbery, and Related Crimes.” The crime of embezzlement is prosecuted under F.S. 812.014.
THEFT: Another common white-collar crime is theft or conversion, i.e., obtaining property by fraud or false pretenses. The elements of various crimes of “theft” are contained in F.S. 812.014 et seq. The penalties for various forms of theft depend on the value of the property taken, as delineated in F.S. 812.014(2)–(3).
F.S. 812.035 provides civil remedies for violations of several of the theft statutes and can be a great tool for the commercial litigator. One should be aware of the civil remedies available, including injunction, dissolution, and seizure of property, under that statute.
CHECKS AND DRAFTS: Criminal violations involving checks and drafts can be found in F.S. Chapter 832. However, rather than send a worthless check to the state attorney for collection, a victim may institute a civil proceeding under F.S. 68.065. Under that statute, in addition to the amount owing on the check, the maker or drawer of the check is liable to the payee for damages of triple the amount owing, as well as for any court costs, reasonable attorneys’ fees, and service charges.
Two of the most crimes involving the issuance of checks are stopping payment with intent to defraud (F.S. 832.042), giving worthless checks,drafts, and (notably in this electronic age) debit card orders (F.S. 832.05). The ligtigator should pay close attention to F.S. 832.07, Prima facie evidence of intent; identity”, as it contains (1) the required form of the notice to be sent to the maker of the check necessary to prove a prima facie showing of intent to defraud, and (2) the necessary information to be recorded on the face of the check necessary to prove a prima facie case of identity of the maker.
RICO/RACKETEERING: F.S. 895.01–895.06 are known as the “Florida RICO (Racketeer Influenced and Corrupt Organization) Act.” (See also §§5.23, 18.81, and 20.51 of this manual.) Corporations and partnerships are particularly susceptible to scrutiny by prosecutors and investigators under this Act because they are “organizations.” Under F.S. 895.02(1), “racketeering activity” means “to commit, to attempt to commit, to conspire to commit, or to solicit, coerce, or intimidate another person to commit . . . [a]ny crime which is chargeable by indictment or information under” specified portions of Florida Statutes listed there.
Among the provisions the statute goes on to note are F.S. 403.727(3)(b) (environmental control); 409.920 or 409.9201 (Medicaid fraud); 440.105 or 440.106 (workers’ compensation); part IV of Chapter 501 (telemarketing); Chapter 517 (sale of securities and investor protection); 624.401 (transacting insurance without a certificate of authority); 624.437(4)(c)1 (operating an unauthorized multiple employer welfare arrangement); 626.902(1)(b) (representing or aiding an unauthorized insurer); 655.50 (reports of currency transactions, when such violation is punishable as a felony); Chapter 687 (interest and usurious practices); Chapter 812 (theft, robbery, and related crimes); Chapter 815 (computer related crimes); Chapter 817 (fraudulent practices, false pretenses, fraud generally, and credit card crimes); Chapter 831 (forgery and counterfeiting); Chapter 832 (issuance of worthless checks and drafts); Chapter 838 (bribery and misuse of public office); Chapter 896 (offenses related to financial transactions); and “[a]ny conduct defined as ‘racketeering activity’ under 18 U.S.C. s. 1961(1)” (F.S. 895.02(1)(b)).Criminal penalties and alternative fines are found in F.S. 895.04, and civil remedies are in F.S. 895.05.
OTHER CRIMES: Also fairly common among the criminal offenses charged in Florida courts are bribery and extortion/threats, F.S. 838.015; computer crimes, F.S. Chapter 815; conspiracy, F.S. 777.04(3); forgery/counterfeiting, F.S. 831.01; violations of the Florida Communications Fraud Act, F.S. 817.034; criminal usury/loansharking/shylocking, F.S. 687.071; and theft of trade secrets (often called “economic espionage”), F.S. 812.081(2).
WHITE COLLAR CRIME VICTIM PROTECTION ACT: F.S. 775.0844, the “White Collar Crime Victim Protection Act” (WCCVPA), enhances the penalties that are generally imposed for common white-collar crimes. Under the WCCVPA, white-collar crime is broadly defined to include virtually every nonviolent, nondrug crime in Florida, referring to specific Florida statutes as well as giving broad descriptions of crimes, likely included as a “catch all” provision.
The WCCVPA defines “aggravated white collar crime” as “engaging in at least two white collar crimes that have the same or similar intents, results, accomplices, victims, or methods of commission, or that are otherwise interrelated by distinguishing characteristics and are not isolated incidents, provided that at least one of such crimes occurred after the effective date of this act.” F.S. 775.0844(4).
The legislative intent of the WCCVPA is found in F.S. 775.0844(2): “[I]t is the intent of the Legislature to enhance the sanctions imposed for nonviolent frauds and swindles, protect the public’s property, and assist in prosecuting white collar criminals.” Indeed, the sanctions for committing an “aggravated white collar crime” are severe:
Any person who commits an aggravated white collar crime as defined in this section and in so doing either:
(a) Victimizes 10 or more elderly persons, as defined in s. 825.101(5);
(b) Victimizes 20 or more persons, as defined in s. 1.01; or
(c) Victimizes the State of Florida, any state agency, any of the state’s political subdivisions, or any agency of the state’s political subdivisions, and thereby obtains or attempts to obtain $50,000 or more, commits a felony of the first degree, punishable as provided in s. 775.082, s. 775.083, or s. 775.084. F.S. 775.0844(5).
Under subsection (6), an aggravated white-collar crime is mandatorily “ranked within the offense severity ranking chart at offense severity level 9.” This results in a score of 92 “primary offense” points on a Sentencing Guideline Scoresheet, which, even without any other crimes or computation of any criminal history, means that the offender could serve a minimum of 48 months in a Florida prison. See F.S. 921.0024; Fla.R.Crim.P. 3.701 et seq., Rule 3.988.
In addition to the prison sentence, under F.S. 775.0844(7), a person convicted of an aggravated white-collar crime “may pay a fine of $500,000 or double the value of the pecuniary gain or loss, whichever is greater.” Restitution must also be ordered to “each victim of the crime, regardless of whether the victim is named in the information or indictment.” F.S. 775.084(8). Any restitution ordered must be made a condition of any probation, and the court can order continued probation for up to 10 years for restitution to be paid, under paragraph (8)(a). Paragraph (8)(b) allows the court to retain jurisdiction over the matter to oversee and enforce the repayment of restitution, including violation of probation and contempt of court.
COMMON FEDERAL WHITE-COLLAR CRIMES
In addition to violations of the Florida statutes mentioned above, Chapter 47 of the United States Code contains many fraud-related crimes. Among many others, federal law prohibits the following common white-collar crimes:
Antitrust violations: Price fixing, monopolies, and other infractions of the Sherman Act (15 U.S.C. §§1 et seq.) and the Clayton Act (codified as 15 U.S.C. §§12–27).
Bank fraud: Fraud against a federally insured banking institution, including embezzlement, check fraud, commercial loan fraud, and check kiting. See generally 18 U.S.C.§§215 et seq., 656–657,1005–1006, 1344.
Bankruptcy fraud: Individuals or corporations who lie or defraud creditors or bankruptcy officials about assets or debts. See 18 U.S.C. §§152 et seq.
Counterfeiting: Copying goods (such as designer merchandise) or money and passing the copies off as genuine. See 18 U.S.C. §2320.
Computer crime: fraud though protected computers, intentionally or recklessly causing damage through a computer transmission or unauthorized access, trafficking in passwords, and other crimes prosecuted under the Computer Fraud and Abuse Act (18 U.S.C. §1030).
Economic espionage: Theft of proprietary information or trade secrets. See 18 U.S.C. §§1831 et seq. (the Economic Espionage Act of 1996).
Environmental crime: crimes related to hazardous waste (prohibited under the Resource Conservation Recovery Act, 42 U.S.C. §§6901-87, and the Comprehensive Environmental Response, Compensation, and Liability Act, 42 U.S.C. §§9601-75), water pollution (prohibited by the Clean Water Act, 33 U.S.C. §§1251-1387, and the Refuse Act, 33 U.S.C. §§407, 411), and air pollution (prohibited by the Clean Air Act, 42 U.S.C. §§7401-71).
Insurance fraud: Defrauding insurance companies by exaggerating or fabricating claims. See federal RICO (18 U.S.C. §§1961 et seq.), mail fraud (18 U.S.C. §§1341 et seq.), or wire fraud (18 U.S.C. §1346) statutes. §22.8
Mail and wire fraud: Using mail, telephone, or electronic communication to execute a scheme to defraud. See 18 U.S.C.§§1341, 1343.
Money laundering: Running illegally obtained money through a legitimate business. See 18 U.S.C. §§1956–1957.
Mortgage fraud: Falsely overvaluing land, property, or security in order to influence a lender to loan money. See 18 U.S.C. §1014. Notably, this crime carries up to 30 years in prison and up to a $1 millon fine.
Securities fraud: Insider trading and theft through market manipulation. See 18 U.S.C. §1348.
Tax evasion: Filing inaccurate IRS returns, not reporting income on tax returns, or not filing tax returns. See generally IRC §§7201 et seq.
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