Federal criminal defense attorney Benson Varghese discusses white collar crimes in this short video.
Video Transcript
What Is White Collar Crime? (And Why People Go to Prison for It)
Imagine you get a knock at the door. Perhaps it’s a uniformed agent showing up with a search warrant for your home or your business. Or someone shows up in civilian clothing, shows you their badge, and says, “We have some questions for you about your finances.” And just like that, your entire world stops.
In that moment, you very well may be staring down the barrel of a federal investigation — one that could cost you your career, your savings, your reputation, and your freedom. That’s often how people find out that they are the subject of a white collar crime investigation.
While most people think of violent crimes as being the ones that receive the greatest punishment, the reality is white collar crimes can result in years if not decades of sentences, fines, and restitution — things that can wipe out everything you’ve worked decades to build. And unlike street crimes that are investigated in hours or days, white collar crime investigations can take years, and they are done in secret. A case is being built against you and you have no idea it’s even happening.
In this video, I’m going to break down what a white collar crime is, how these investigations work, what the government has to prove, and most importantly, what you must do if you ever find yourself in the crosshairs of this type of investigation.
I’m Benson Varghese. I’m a board certified criminal law specialist here in Texas. I’ve represented individuals charged with white collar crimes at both the state and federal level, and I’ve spent years in the courtroom defending good people against some of the most complex, high-stakes criminal charges you can face — including white collar crimes brought by federal prosecutors and three-letter agencies.
Who Gets Charged With White Collar Crimes?
White collar crime is one of the most misunderstood areas of criminal law because most people think it only happens to CEOs and Wall Street bankers. But I’ve seen small business owners, accountants, nurses, home health care providers, doctors, and real estate agents get swept up in white collar investigations. The common thread: these are individuals who carry a professional license. All the things you work so hard for — your license, your professional success — those are the very things that can make you a target for federal investigators.
What Is a White Collar Crime?
The FBI defines a white collar crime as any illegal activity characterized by deceit, concealment, or violation of trust — generally absent any physical force or violence. In plain English, these are offenses committed not with traditional weapons, but with instruments like computers, keyboards, and phones.
The term “white collar crime” was coined in 1939 by sociologist Edwin Sutherland, who made the point that wealthy, educated, professionally employed people commit serious crimes too — they just do it differently. Instead of robbing a bank, they might defraud one. Instead of stealing a wallet, they might steal millions through falsified documents. Instead of threatening someone physically, they might threaten them through manipulation and deception.
The FBI is clear: although these crimes may not be violent in the traditional sense, they are not victimless. When victims are out of sight — investors, government programs, the general public — the harm can be staggering. In 2024, Texas ranked second in the entire country for internet-enabled financial crime losses, reporting $1.35 billion in losses, up $328 million from the year before. Prosecutors and federal agents are paying attention.
How White Collar Investigations Work
What makes white collar investigations so terrifying is that you may not know for months or even years that you’re under investigation. Unlike a drug arrest or a DUI where law enforcement acts quickly, financial crime investigations are slow, methodical, and secret. Investigators obtain your bank records, emails, tax returns, contacts, and phone records — all without your knowledge. By the time an agent knocks at your door or serves a search warrant, they have been building the case for a very long time.
The agencies involved include the FBI, the IRS Criminal Investigation Division, the Securities and Exchange Commission, the Secret Service, the Department of Justice, and here in Texas, the Attorney General’s Office and various Inspector General offices. These agencies have essentially unlimited resources and time.
Investigations typically begin with a tip, a whistleblower complaint, an anonymous report, or a red flag during a routine audit. From there, investigators gather documents — bank records, tax records, corporate filings, emails, text messages — through administrative subpoenas or grand jury subpoenas, none of which require notifying you. They may interview your employees, former employees, friends, and even your accountant, instructing all of them not to tell you.
The moment you find out is usually when an investigator shows up at your door or with a search warrant. You may also receive a target letter — a notice that you are being asked to testify before a grand jury because you are a target. Either way, your first call must be to an attorney before you say a single word.
Common Types of White Collar Offenses
Fraud is the broadest category, accounting for about 63% of all federal white collar charges. Fraud means using deception to obtain something of value. Under the fraud umbrella: securities fraud, insurance fraud, credit card fraud, mortgage fraud, healthcare fraud, tax fraud, wire fraud, mail fraud, and bankruptcy fraud, among others.
Wire fraud is one of the most common charges because it requires only that a fraud involved electronic communication — an email, a text, a phone call, a wire transfer — that crossed state lines. Nearly all electronic communications do. That’s why so many financial crimes end up in federal court. Mail fraud is the same concept applied to the postal system. Importantly, the wire or mail communication itself doesn’t have to be fraudulent — the government only has to show it was used in furtherance of a fraudulent scheme.
Embezzlement involves an employee or someone with a fiduciary duty taking money or property entrusted to them — a bookkeeper skimming funds, an investment advisor moving client funds into personal accounts, or a nonprofit officer misappropriating donations. The trust relationship is what separates embezzlement from ordinary theft.
Money laundering is the process of running illegally obtained money through legitimate transactions to make it appear clean — classically through a cash-heavy business like a restaurant or laundromat. Federal prosecutors routinely stack money laundering charges on top of other white collar charges because it adds years to the potential sentence.
Healthcare fraud is one of the most aggressively prosecuted offenses. It includes billing for services not rendered, upcoding procedures, prescribing medications for kickbacks, and billing Medicare or Medicaid for phantom patients. Prosecutors consider not just actual losses but intended losses.
Securities fraud and insider trading are handled by the SEC. Trading on material non-public information — or tipping off someone else to do so — constitutes insider trading. Manipulating the price of a security or making false statements to investigators is securities fraud.
What Prosecutors Must Prove
Using fraud as an example, prosecutors must prove three things: (1) that there was a scheme to defraud — an intentional plan to obtain money or property through deception; (2) that you knowingly and willfully participated in that scheme; and (3) that there is a federal hook, such as the use of mail or wire in furtherance of the fraud.
Penalties
In Texas, white collar convictions are classified based on the amount of money involved, ranging from a state jail felony up to a first-degree felony. A first-degree felony carries 5 to 99 years or life in prison and up to a $10,000 fine.
At the federal level, the most common offenses carry up to 20 years per count. If prosecutors charge eight counts, you could theoretically face up to 160 years. This is a deliberate pressure tactic — prosecutors offer a reduced plea while threatening the full sentence stack if you go to trial.
Federal prosecutors also have the power of asset forfeiture. They can freeze and seize your accounts, then move to permanently keep the funds by claiming they were obtained through illegal activity. Unlike a criminal case where the government bears the burden of proof, in civil forfeiture you must prove the property was innocently obtained.
Common Mistakes to Avoid
Talking to investigators. Agents are skilled at getting information out of you. They may arrive early in the morning, act friendly, tell you that you’re a witness not a target, and suggest that cooperating early will help you. They are legally permitted to lie to you during an investigation. The Fifth Amendment gives you the absolute right to remain silent, but you must invoke it. Say: “I am not going to answer any questions until I speak with my attorney. I am invoking my Fifth Amendment right to remain silent.” Then stop. Do not explain yourself or try to clear things up.
Destroying or altering documents. If you learn about an investigation and begin concealing or destroying materials, that becomes the basis for a separate obstruction of justice charge — one that carries its own federal prison sentence. It will also be used to argue that you knew you were guilty. Leave everything exactly as it is and call an attorney immediately.
Assuming silence alone is enough. The Supreme Court has held that simply remaining silent is not sufficient. You must affirmatively and verbally invoke your right to remain silent.
Letting your guard down over time. Many people learn they may be under investigation, worry for a while, and then assume they are in the clear when months or years pass without contact. The passage of time means nothing. White collar investigations can take years. Silence from investigators is not safety.
Contact Varghese Summersett
If you or someone you know believes they may be under investigation for or charged with a white collar crime in Texas, call us at (817) 203-2220. We are here to help.
A white collar crime is an offense that is alleged to have been committed by individuals who are professional – whether they are government employees or in the private sector – who have a high degree of trust or access to information that allows them to commit offenses. As a result, most white collar prosecutions are seeking not only to punish the individual who committed the crime and deter others from committing similar crimes, but to also seek restitution for the victims.
Most allegations of fraud are examples of white collar crime. Wire fraud, mail fraud, bank fraud are all very common examples of white collar crimes. Other common examples include health care fraud, mortgage fraud and bankruptcy fraud, but white collar crimes are not limited to allegations of fraud. They also include things like public corruption, bribery and money laundering. Most white collar prosecutions take place at the federal level, although states are increasingly passing laws that allow them to prosecute white collar crimes, as well.
Most white collar cases are complex. It is not at all uncommon for an investigation to take years before a person receives a target letter from a federal prosecutor or gets arrested on a federal warrant. One example of a white collar crimes is money laundering. Money laundering it the act of taking illegitimate funds and making them appear as if they had a legitimate source. The federal government is particularly interested in the use of non public information for self gain. That generally falls under the umbrella of insider trading. Agencies like the SEC are particularly interested in investment fraud. This includes things like ponzi schemes, pyramid schemes and market manipulation. Investigations into heath care fraud often look into a doctor or other medical provider’s billing practices. They look for over-billing to the federal government, over-billing to insurance companies and kickbacks.
For more information, call us at (817) 203-2220
