By Criminal Defense Lawyer Jeremy Rosenthal
“White collar” crime typically refers to allegations about business related wrongdoings – frequently with accounting or other executive level indiscretions.
Both state and federal authorities police white collar cases.
Examples of white collar charges can be:
- Embezzlement (theft)
- Money laundering
- Securities fraud
- Mortgage fraud
- income tax evasion
- Misapplication of fiduciary property
- Healthcare and/or Medicare fraud
- Wire fraud
- Mail fraud
What is the Difference Between State and Federal Prosecution for White Collar Cases?
Sometimes it’s as simple as jurisdiction. The federal government has jurisdiction over Medicare fraud and federal income tax evasion. Other times, the criminal enforcement over-laps and either could prosecute if they wanted though they generally coordinate so as to not waste resources.
Why Does the Federal Government Prosecute Some Cases and Not Others?
The federal government tends to focus more on cases of higher financial value. They also frequently prosecute cases where there are more potential guilty parties and co-conspirators. You might see a state level prosecution with 3, 4 or 5 people involved in a white-collar conspiracy. It’s not uncommon, though, to see the US Attorneys prosecution a crime ring with 20 suspects or more.
Differences in Investigation Resources and Capacity
The federal government is a very well oiled machine in terms of investigation and case work-up on pretty much every level. The US attorney typically works hand-in-hand with agencies such as the FBI, DEA, ATF, homeland security and any other federal agency you can think of such as the SEC and IRS.
State level investigations can be excellent as well – but there is more of a hit and miss chance. The state of Texas does have a State Securities prosecution team, for example, as well as the Texas Rangers. At the same time, a smaller police agency officer or detective with far less training may try to put together a white collar case and not really have the best idea of what they’re doing. Federal investigators can and often do help out state agencies – but state agencies might not always ask even when they should.
Differences in Trial
It’s far more likely in federal court – if you opt to have a trial – to be on trial with whatever co-defendants have not already plead guilty. This could mean being on trial at the same time with the same jury as everyone else charged in the same conspiracy.
You can be put on trial with someone else in State Court – but it is less frequent and the rules make it easier for you to split the cases apart.
The rules of trial from State and Federal Court aren’t perfectly and completely aligned, but they are very similar. The differences are a completely different topic which could probably be the subject of an entire law school class. The differences, though, are pretty technical and can be somewhat minute.
Differences in White Collar Punishment: State vs. Federal
State level punishment can differ drastically from federal punishment. Federal punishment tends to be dictated by the federal sentencing guidelines and will ultimately be decided by a judge. Texas state courts give a defendant the option of having a judge or jury impose sentencing – and the sentencing is encompasses a far broader range of possible jail – and in many instances probation too.
*Jeremy Rosenthal is board certified in Criminal Law by the Texas Board of Legal Specialization. He has been designated as a Texas Super Lawyer by Thomson Reuters.