April 8, 2015 By Wallin & Klarich

White collar crime attorneyRarely does the state of Utah find itself leading the nation. In fact, the state was the last in the country to stop executing death row inmates by firing squad (the last occurred in 2010), and is considering bringing that form of capital punishment back.1

Yes, the state of Utah has tired of not leading the nation in something, and it has decided to change that. Recently, the state became the first in the United States to enact a public criminal registry for white collar criminals, which have generally been treated, at least in the public’s view, with kid gloves.2 Utah has decided that white-collar criminals deserve the same kind of public infamy normally reserved for people convicted of sex crimes, such as rape, child molestation, and child pornography.

Very soon, those convicted of white collar crimes in Utah will find their faces, names and addresses in full view of the public, searchable on a website the state is creating.

What are White Collar Crimes?

“White collar” refers to nonviolent, financially motivated crimes against property that are often committed by business professionals and governmental officials. The term, coined in the 1930s, referred to the type of clothing the persons who commit these crimes generally wear (suits), and the social status that non-criminals in their professions enjoy. Instead of using a gun to steal, white-collar criminals often use advanced degrees such as MBAs and JDs.

White collar crimes include:

  • Fraud
  • Embezzlement
  • Copyright/Trademark Piracy
  • Identity Theft
  • Forgery
  • Insider Trading

“Club Fed” No More

The history of punishment for white collar crimes has long been laughable in relation to the magnitude of the crimes committed. For example, in 1992, Charles Keating, head of a Lincoln Savings and Loan that allegedly defrauded over 23,000 customers and cost taxpayers an estimated $124 billion, was convicted of federal and state charges of fraud, conspiracy and racketeering. His punishment? He served a little over four years in a medium-security federal prison.3

Club FedWhile these prisons are not luxury resorts with tennis courts and swimming pools, they are still best known for the nickname “Club Fed” because they are without the dangers present in many prisons. Larry Levine, who served 10 years in one such facility for racketeering and other charges, describes life in a low-security prison as “a boring Groundhog Day” with regularly scheduled wake-up calls, meal times, and work duties that bear a resemblance to a normal 9-to-5 workday outside the prison’s walls.4

After Keating came the likes of Jeffrey Skilling of Enron, John Rigas of Adelphia, Bernard Ebbers of Worldcom, and most infamously, Bernie Madoff, who is thought to have defrauded investors of $800 million by selling phony investments.

The public’s mere dislike for white-collar criminals turned to outrage as the bottom fell out of the mortgage market in 2008, plunging the country into its biggest financial crisis. Before long, Congress, the Securities and Exchange Commission, and state governments decided that the public rancor could no longer be ignored, and passed a slew of legislation and regulation to severely punish white-collar criminals, which is estimated to cost the country anywhere between $300-600 billion per year.5

Does Utah’s Law Go Too Far?

There is no denying that the anger toward white-collar criminals is justifiable, as these crimes can have a lifetime of devastating financial consequences for the victims. Such was the position of Utah’s state attorney general who provided the idea for the new law. Furthermore, when we already accept registries for sex crimes as just part of the risk of committing the crime, why should a white-collar criminal be treated any different?

Utah white collar criminalsThe truth is all registries like this carry punishment that endures long after the sentence for the crime has been served, and often create new problems where none existed before. A criminal registry brands everyone with the same stamp of public disapproval, no matter the severity of the crime. On a registry, a bank teller who embezzles $100 could be treated the same as a financial titan who bilked investors out of hundreds of millions of dollars.

Utah’s registry is not permanent until a person commits a third offense, and the offender can “buy” his or her way off the list by paying full restitution to the victims, but a registry still costs taxpayer money to administer. In an age where information is a few keystrokes away, why add a publicly funded register that is redundant in light of the numerous Internet search engines that already exist? Susan Brune, a defense lawyer who handles white-collar cases in New York, said it perfectly: “Google is already a pretty effective registry.”

The criminal justice system is about making people pay an appropriate price for their mistakes and wrongdoing, but it is also supposed to be a system that gives a person a chance to prove he or she belongs in our society. Continuing to punish someone long after the price of wrongdoing has been paid is contrary to our sense of justice, and does not serve to prevent further crime. In fact, in the case of a white collar criminal registry, it could lead to the opposite. A registry such as this will make it much more difficult for convicted persons to gain employment and provide for themselves and their family. Are those not conditions that drive people to commit those very same theft crimes again?

We Would Like to Hear What You Think

We at Wallin & Klarich would like you to share your feedback on this topic. Should California follow Utah’s lead and publish the names of people convicted of white collar crimes? Is this a punishment that goes far beyond the crime? What are some of the reasons you see that would make this a good or bad idea? Please feel free to leave your comments below.

1. [Associated Press and Alexandra Klausner, “Utah votes to bring back death by firing squad – because it can be more humane than lethal injections,” Daily Mail, March 11, 2015, available at http://www.dailymail.co.uk/news/article-2989065/Utah-allow-execution-firing-squad-shortage-deadly-drugs.html.]
2. [Ben Protess, “Utah Passes White-Collar Felon Registry,” March 11, 2015, available at http://www.nytimes.com/2015/03/12/business/dealbook/utah-passes-white-collar-felon-registry.html?_r=1.]
3. [Robert D. McFadden, “Charles Keating, 90, Key Figure in ’80s Savings and Loan Crisis, Dies,” The New York Times, April 2, 2014, available at http://www.nytimes.com/2014/04/02/business/charles-keating-key-figure-in-the-1980s-savings-and-loan-crisis-dies-at-90.html.]
4. [Helena Andrews and Emily Heil, “What it’s really like inside ‘Club Fed’ prisons,” The Washington Post, January 5, 2015, available at http://www.washingtonpost.com/blogs/reliable-source/wp/2015/01/05/what-its-really-like-inside-club-fed-prisons/]
5. [Friedrichs, David O. (2009). Trusted Criminals: White Collar Crime In Contemporary Society (4 ed.). Wadsworth Publishing. p. 50. ISBN 978-0495600824. citing Kane and Wall, 2006, p. 5]

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