February 13, 2015 By Paul Wallin

You might think the term “white collar crime” sounds less serious than crimes like murder, assault, and armed robbery, but these crimes can cost thousands of people their jobs and their financial security.

Because of the high stakes involved with white collar crimes, those who are convicted of committing these types of offenses face severe consequences. Let’s take a look at five of the biggest white collar crimes in United States history, and what happened to the people who committed them.

Bernard Madoff

It is highly illegal to commit white collar crimes.
Madoff’s white collar crimes sent him to prison for 150 years.

Bernie Madoff operated the biggest Ponzi scheme in U.S. history. A Ponzi scheme is when you convince people to invest money by promising them a big profit in a short amount of time, and then you pay them profit dividends from new investors’ money. The scheme can start out as a legitimate business venture, but when the expected profits don’t materialize, money from new investments goes to pay previous investors.

Madoff defrauded investors out of more than $65 billion by the time he was arrested in 2011. Many people who trusted Madoff’s wealth management company, Madoff Investment Securities, LLC, were wiped out financially.

Madoff was convicted of securities fraud (18 U.S.C. 3301), investment advisor fraud (15 U.S.C. 80b–6), mail fraud (18 U.S.C. 1341), wire fraud (18 U.S.C. 1343), three counts of money laundering (18 U.S.C. 1956), false statements (18 U.S.C. 1001), perjury (18 U.S.C. 1621), false filings with the United States Securities and Exchange Commission (SEC), and theft from an employee benefit plan (18 U.S.C. 664). 1 He was sentenced to 150 years in prison and ordered to forfeit more than $170 million in assets.

Enron

This Houston-based corporation marketed electricity and natural gas, commodities, financial services, and risk management services to customers around the world. It achieved a ranking as the sixth largest energy company in the world.

The company faked energy shortages in California in order to drive up the price of electricity. 2 Enron committed accounting fraud and lied about profits and corporate assets in order to keep the price of stock high.

In December 2001, the company filed for Chapter 11 bankruptcy, two months after the SEC opened an investigation into its accounting practices. In January 2002, the U.S. Department of Justice opened a criminal investigation into Enron’s collapse. The investigations led to indictments of Enron’s top executives.

Kenneth Lay, the chairman and CEO, was convicted of six counts of fraud and conspiracy, and four counts of bank fraud. He could have faced life in prison, but he died of a heart attack three months before he was scheduled for sentencing. 3

Jeffrey Skilling, who resigned as CEO in 2001, received the harshest sentence. Skilling was convicted of one count of conspiracy, one count of insider trading, five counts of making false statements to auditors, and 12 counts of securities fraud. His original sentence, 24 years in prison, was reduced to 14 years in 2013 as part of a deal with federal prosecutors to end his appeals. 4 As part of the deal, Skilling will pay more than $40 million back to investors who were harmed by Enron’s collapse.

WorldCom

worldcom
Former CEO of WorldCom, Bernard Evers, was convicted and sentenced to 25 years behind bars.

WorldCom was a telecommunications company that started out as a small long-distance company and, through the aggressive acquisition of 65 companies, became one of the largest long-distance and Internet businesses in the world.

Its downfall came through questionable accounting practices and misstating profits. Executives misstated more than $11 billion in profits and its stockholders bore the losses after it filed for bankruptcy.

Bernard Evers, CEO of WorldCom, was convicted of one count of conspiracy, one count of securities fraud, and seven counts of filing false statements with securities regulators. He was sentenced to 25 years in prison. 5

Tyco

Tyco manufactures electronic components, healthcare and security equipment. In 2002, former Tyco CEO Dennis Kozlowski and CFO Mark Schwartz were charged with grand larceny, conspiracy and falsifying business records. They reportedly took out millions of dollars in loans and gave themselves huge bonuses without stockholder approval, and over-reported profits while they privately sold off millions of dollars in stocks.

Kozlowski and Schwartz were convicted of 22 counts of grand larceny and conspiracy, falsifying business records and violating general business law. They were each sentenced to 25 years in prison. 6

Jack Abramoff

This former Republican lobbyist charged Native American tribes more than $20 million in fees in exchange for lobbying congress for gambling casino rights. In some instances, he secretly worked to shut down Native American casinos in order to create a situation where the tribes would need to pay him to lobby Congress to reopen them.

Evidence against him included electronic records of emails in which he called his Native American clients “troglodytes,” “morons,” and “monkeys.” At one point, he worked for the apartheid government of South Africa through an organization he started, the International Freedom Foundation. 8

Abramoff pled guilty to fraud, tax evasion, and conspiracy to bribe public officials, and was sentenced to four years in prison in exchange for cooperating with federal prosecutors in investigating members of Congress whom he had previously bribed. 9

Wallin & Klarich Can Help

If you have been accused of a federal crime, you could face decades in prison and huge fines. You need to speak with an experienced federal attorney immediately. At Wallin & Klarich, our criminal defense attorneys have over 40 years of experience successfully defending our clients facing federal charges. We can help you get the very best outcome possible in your case.

We have offices located in Los Angeles, Sherman Oaks, Torrance, Orange County, San Diego, Riverside, San Bernardino, Ventura, West Covina and Victorville. No matter where you work or live, there is an experienced Wallin & Klarich federal defense attorney nearby to help.

Call us today at (877) 4-NO-JAIL or (877) 466-5425 for a free phone consultation. We will be there when you call.


1. [http://www.fbi.gov/newyork/press-releases/2009/nyfo062909.htm]
2. [http://www.theguardian.com/business/2005/feb/05/enron.usnews]
3. [http://www.nytimes.com/2006/07/05/business/05cnd-lay.html?_r=0]
4. [http://www.huffingtonpost.com/2013/06/21/jeffrey-skilling-prison-sentence-reduced_n_3480145.html]
5. [http://www.npr.org/2005/07/13/4752469/ebbers-sentenced-to-25-years-for-fraud]
6. [http://www.washingtonpost.com/wp-dyn/content/article/2005/06/17/AR2005061701003.html]
7. [http://www.washingtonpost.com/wp-dyn/content/article/2006/01/06/AR2006010601796.html]
8. [http://www.thenation.com/article/175172/meet-conservatives-who-campaigned-apartheid-south-africa#]
9. [http://www.washingtonpost.com/wp-dyn/contAent/custom/2005/12/28/CU2005122801176.html]

AUTHOR: Paul Wallin

Paul Wallin is one of the most highly respected attorneys in Southern California. His vast experience, zealous advocacy for his clients and extensive knowledge of many areas of the law make Mr. Wallin a premiere Southern California attorney. Mr. Wallin founded Wallin & Klarich in 1981. As the senior partner of Wallin & Klarich, Mr. Wallin has been successfully representing clients for more than 30 years. Clients come to him for help in matters involving assault and battery, drug crimes, juvenile crimes, theft, manslaughter, sex offenses, murder, violent crimes, misdemeanors and felonies. Mr. Wallin also helps clients with family law matters such as divorce and child custody.

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