Understanding White Collar Economic Crimes Probation

Many Colorado District Attorney’s office have started “specialized units” that focus on a specific area of perceived crime.

For example, Carol Chambers and the 18^th Judicial District Attorneys Office has three offices in Arapahoe County and one each in Douglas, Elbert, and Lincoln Counties… is divided into appeals, criminal investigations, economic crime unit, felony prosecution, juvenile prosecution, misdemeanor prosecution, special victims unit, victim advocate, victim¡¯s compensation and community outreach. The Special Victims Unit prosecutes crimes that involve children, the elderly and individuals with physical or mental disabilities.

Economic crimes prosecuted typically include major embezzlement, identity theft, counterfeiting, internet fraud, tax crimes, welfare fraud, fiduciary elder abuse and public corruption cases. While my experience has observed the rapid increase in identity theft crimes, it is closely followed by employee embezzlement.

Fraud / White Collar Crime Lawyers Service Denver & All of Colorado Colorado Economic Crimes and The Law

The Colorado Economic Crimes Units investigate and prosecutes non violent felony property crimes. The bulk of a classic caseload involves theft, misapplication of fiduciary property, insurance fraud, mortgage fraud, money laundering, tampering with governmental records, securing execution of a document by deception, identity theft, and computer crime, contractor fraud, employee embezzlement, financial exploitation of the elderly, theft due to identity fraud, investment / securities fraud, check fraud, and welfare fraud.

These crimes are commonly referred to as White Collar Crimes. Economic Crime Units also are called upon to investigate and prosecute cases involving public corruption.

Typical Economic Crimes Units receive complaints from law enforcement agencies, as well as the public. After screening, the case is assigned to an investigator and an attorney for review and investigation. Investigations are often time consuming due to the volume of records required to be examined and the time required to obtain documents from banks and other financial institutions.

Sometimes an investigation reveals that proof of a criminal act “beyond a reasonable doubt” is not possible. In those situations, the case is rejected for filing C sometimes called nolle prosequi and parties are advised to consult private attorneys in order to pursue civil remedies.

Foe example, a breach of contract does not constitute a criminal offense but may give rise to a civil claim for damages.

Typically, defendants engaging in economic crimes are first time offenders. Prosecutors usually are willing to make every effort to secure restitution payment to the victim through the use of community supervision or probation. This is

not possible in every case. Punishment is often decided by a judge or a jury after a guilty verdict.

Economic crimes are different from the regular image of violent crime in the minds of the public However, times have changed. The slap on the wrist approach of yesterday has been replaced by the realization that economic crimes often have far reaching consequences and are more likely to cause a monetary loss far in excess of those incurred by regular crimes.

White Collar Crime differs from Blue Collar Crime in the social and economic positions of the offenders. White Collar crime is typically committed by those who are well educated, and usually financially better off than the typical accused.

Economic Crimes are also considered opportunistic….the offenders make use of the unique opportunities that exist specifically to them in order to complete the crimes.

Punishment of White Collar Crime

For many years the punishment for White Collar crime in Colorado has increased substantially.

White Collar Crimes often result in punishment that exceeds even violent crimes ¨C almost as if the pendulum has swung too far in the other direction.

Legal Representation is more critical than ever in this specialized area. , and the faster it comes, the better. The specialized knowledge of the procedures and the relevant law makes it critical that you get an attorney as soon as you are aware that charges might be filed against you.

There are times when an attorney can prevent charges from being filed at all. Certainly at all stages of the case, a lawyer will ensure that your rights are protected.

Economic Crimes Probation ¨C Intensive and Tough

One of the first things the Probation Department will do ¨C when there is assigned a probation officer who specializes in economic Crime probation ¨C is gather the following information from you prior to your sentencing:

• Pursuant to your plea of guilty/finding of guilt in an economic crime, you are requested to provide the following items to the Probation Department for the preparation of a Pre-Sentence Investigation Report or Probation Supervision within ten business days:
• Documentation of income for the entire household
• Bank statements for no less than six months and Documents of all investment accounts
• Residence information, including mortgage statements, home equity accounts, line of credit accounts, property tax statements and deed(s) of trust.
• Documentation regarding ownership or lessee information for any vehicle you possess or provide documentation of ownership or lessee information if another party owns or leases such a vehicle
• Phone records for at least three months, including residence, business and cell phone accounts
• Declaration pages from all insurance policies and Credit card statements for no less than six months
• Federal and State Income Tax Returns for no less than three years
• Documentation for all civil cases, pending and final, including civil judgments, liens and garnishments
• Any bankruptcy documentation including pending and final cases
• Current credit report
• Documentation where and how monies fraudulently obtained were spent
• Articles of incorporation if self employed
• Documentation of any fiduciary responsibility of other persons, groups or businesses and a Copy of employment licensure

The Nature and Typical Terms and Guidelines of Economic Crime Probation look something like this:

Guidelines for Probation Officers Supervising Economic Crime Offenders (EC)

The Division of Probation Services 2009

These Guidelines were compiled with the expertise and assistance of the Probation Economic Crime Task Force.

Guidelines for Probation Officers Supervising Economic Crime Offenders

The Economic Crime Task Force was created to promote consistent and effective supervision of economic crime offenders. Economic crime can encompass many types of offenses. To properly identify this population for the purpose of specialized services the following definition was agreed upon.

Definition of Economic Crime

“An offender whose criminal activity is motivated by greed for the purpose of financial gain. In the commission of the crime, while in a position of trust, the offender will have used deviance, deceitfulness, deception, manipulation and/or grooming techniques.”

Statement of Purpose

The Colorado State Judicial Branch, Division of Probation Services, working with the Probation Economic Crime Task Force supports comprehensive identification, evaluation, supervision and financial monitoring of economic crime offenders under the supervision of probation departments throughout the state.

It is believed that guidelines are essential to accurately identify persons who should receive a more intensive level of supervision than that afforded to regular probation cases, to reduce recidivism, recover restitution and to minimize further victimization from financial predatory behavior.

We realize that probation departments can only adopt these guidelines to the extent that they have resources available to do so. Even so, it is believed that the materials that are being provided in this document give probation officers the best tools to ensure adequate supervision for high risk economic crime offenders.

The following Supervision Guidelines, Conditions of Probation specific to the Economic Crime Offender, and the Financial Disclosure Form will assist supervising probation officers to improve offender accountability and promote victim and community reparation. As stated before, it is acknowledged that not all departments have the resources to meet all of the recommended guidelines. However, incorporating some of these practices will increase the effectiveness of supervision compared to none at all.

Selection Criteria

It is important to differentiate the true economic crime offender from the common criminal. The following criteria should be used to draw that distinction.

1. Economic Crime (EC) cases are those identified by the prosecution where the incentive for committing the crime was greed. Non-violent crimes, concentrating on such crimes as theft, fraud, forgery, and securities crimes.
2. EC offenders exhibit predatory behavior and will often seek out relationships with vulnerable individuals that they can easily build trust with.
3. These cases carry extremely high amounts of restitution; usually with several victims.EC cases may include the offense of Occupational Fraud. This offense involves the use of one’s occupation for personal enrichment through the deliberate misuse or misapplication of the employing an organization’s resources or assets. Examples include Asset Misappropriates, Corruption or Fraudulent Statement. (Association of Certified Fraud Examiners, “2004 Report to the Nation of Occupational Fraud & Abuse)
4. EC crimes may involve individual victim(s), business or affinity groups as opposed to “governmental” crimes such as unemployment or welfare fraud. This does not rule out the assignment of cases involving one of these entities however, concentration will be on cases involving individual victims where the financial loss is more damaging.
5. Offender Assessment: At this time, there is no assessment tool available to adequately assess the true economic crime offender. An economic crime offender may score in the medium or even the low level on the LSI. When an offender scores high on the LSI, it is usually because they have treatment issues that must be addressed prior to the concentration of the payment of restitution. If they score low on the LSI, the level of supervision is over ridden to a higher level depending on the number of risk factors that are identified that are specific to economic crime offenders (listed in the next section). If the offender scores out maximum, all treatment issues relating to drugs/alcohol and mental health should have been addressed and a period of stability experienced prior to placement with an ECU officer. If accepted for EC supervision, we then override the low score using the following risk factors and characteristics.

Risk Factors and Common Characteristics of Economic Crime Offenders

In addition to the characteristics listed above, the following risk factors and characteristics can be used to differentiate the EC offender from other types of criminals.

(Obviously, the more characteristics that are identified the higher risk offender you will be working with.)

• Prior criminal history of theft, fraud, bad checks, forgery
• Civil cases with unmet judgments
• Prior bankruptcy or considering bankruptcy.
• Defendant is unemployed

Defendant takes little or no responsibility for offense – one or more of the following rationalizations verbalized or assessed by PO: Looking for immediate gratification, a sense of entitlement, lying about need or finances, reports feeling unrecognized, under appreciated or taken advantage of. Other characteristics of Economic Criminal.

1. Defendant has liquidated assets prior to sentencing
2. Dumping assets quickly (under selling)
3. Late on restitution payments
4. Payments not being made according to payment plan
5. Not complying with budget – bounced checks, bank fees assessed for NSF, cash advances on credit cards or payday loans. Living beyond their means.
6. Grooming techniques used on victims, multiple victims and/or at-risk victims
7. Pattern of disregard for rules/authority
8. Lengthy history of traffic violations
9. Victim stance or lack of empathy for victim
10. Noncompliance with tax laws.
11. Missed appointments
12. Floating checks
13. Cash advances from credit cards
14. Cash advances from paychecks
15. Pay day loans
16. Cashing out 401k, CD or other investment accounts
17. Dipping into savings
18. Looking for immediate gratification
19. Entitlement (I need, I deserve, I want)
20. Minimized offense
21. Feeling Unrecognized
22. Feeling under appreciated
23. Feeling taken advantage of
24. Borrowing money
25. Shoplifting
26. Selling food stamps

The following supervision model is driven by an offender’s progress on supervision rather than by a specific time frame.

• Phase One – Accountability – Minimum of 90 days
• Phase Two- Containment – Minimum of Nine months
• Phase Three – Maintenance – Minimum of Six Months
• Meet with Collections Investigator for payment plan and financial review.
• A minimum of one face-to-face contact with offender every 30 days
• One home visit within the first 60 days of supervision, thereafter by case plan
• Review of finances/budget every 30 days.
• Employment contact/verification within the first 30 days.
• Minimum face-to-face contact with the offender every 60 days.
• Home/work visits per case plan
• Budget/payment review every 30 days
• Minimum face-to-face contact with the offender every 90 days.
• Home/work visits per case plan¡¡

Prior to progressing to the next phase the defendant must be in compliance with the terms and conditions of their probation.

1. Compliance must be shown as it relates to the case plan.
2. Must be holding stable full time employment
3. Must have stable living conditions
4. Must be making regular, significant monthly restitution payments per payment plan
5. There should be no unexcused reporting dates
6. Must be in compliance with conditions of treatment

Phase One

1. Focus – To establish the elements of containment through offender accountability and financial disclosure.
2. Full financial investigation to include the review of all requested financial documentation, which may include bank statements, tax returns, assets and liabilities.
3. A formal case assessment must be completed with the standardized assessment tool. Override, if necessary – see attached risk factors.
4. Employer letter acknowledging defendant’s conviction and probation conditions and outlining defendant’s job responsibilities in current position. PO will verify letter and make follow up phone call to defendant’s direct supervisor or conduct a work site visit.
5. Defendant will complete a case plan worksheet and/or other tool to measure victim empathy.
6. All referrals made – theft class, victim empathy class, money management class, Consumer Credit Counseling. MH evaluation, community service, polygraph examination, debtor’s anonymous

Phase Two

1. Focus – Maintenance of a containment network through monitored budgeting practices and compliance with payments of restitution.
2. Defendant to provide budget with receipts and/or checking account statement monthly. Goal for defendant to have a checking account and budget that meets all financial requirements with no overdrafts.
3. Defendant to provide monthly verification of earnings to probation.
4. Defendant to complete all treatment requirements and be in compliance with payment plan and budget.
5. Defendant to provide a credit report to probation annually.
6. PO to monitor for high risk behavior (see attached) and impose sanction.
7. Collections Investigator review at minimum annually – DOL report, credit report.
8. Current with payment plan or garnishment in place.
9. Three months without payment – sanction imposed.
10. Changes in employment or position require a new employer notification letter.

Phase Three

1. Focus – To monitor compliance/consistency with budget, case plan and payment plan.
2. Appointments with probation every 6 weeks to 2 months
3. Consider for transfer to Collections Investigator caseload for routine checks of investment/income/earnings
4. Monthly verification of employment
5. SWI check every 6 months for new cases both criminal and civil.
6. Mail-in per case plan and/or district policy
7. Intermediate Sanctions
8. Daily reporting
9. Daily job search
10. Area Restrictions (golf courses, gambling, malls, restaurants, etc)
11. Computer searches
12. Voluntary payroll deductions
13. Attachment of Earnings -up to 50% of earnings withheld
14. Writs of attachment (garnish bank accounts)
15. Lien person property
16. Impose late fees
17. Not within their budget -pay difference to restitution the following month
18. Evaluations (mental health)
19. Referrals (debtors anonymous, gamblers anonymous, budgeting classes)
20. Financial review

Community Service

A note about incentives or rewards: Incentives or rewards can include a lessening of the supervision requirements, possibly even doing a TSUP option to another PO for regular supervision reporting. Intermediate Sanctions, bulleted above, elevate the supervision requirements in some way. This population of offenders is not as easy to reward as drug and other types of offenders might be. They are usually not in treatment or providing UA’s. If they are being required to submit to polygraphs as a way to monitor behavior, you may be able to lessen the frequency of polygraphs.

It is important to remember that some people respond well to incentives and others see this as a chance to return to former behavior. Each case needs to be assessed on an individual basis. If the economic crime offender starts doing something wrong it is often going to be running another scam of some sort.

Common referrals may include the following

• Debtor’s Anonymous (DA)
• Gambler’s Anonymous (GA) http://www.gamblersanonymous.org/
• Victim Empathy Classes
• Cognitive Therapy
• Individual Therapy
• Budgeting/Debt Elimination Counseling

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