Follow the Money

Some of the world’s most malignant criminals never pulled a trigger or detonated an explosive, but they have ruined countless lives. By the most conservative estimates, white-collar crime costs the U.S. $300 billion per year—more than four times the annual budget of the Department of Education. However, in 2017, the prosecution of white-collar crime was at a 20-year low. So why do crimes such as insider trading, embezzlement, predatory lending, Ponzi schemes, and threat financing often go unpunished?

Armed with elite legal teams and well-heeled lobbyists, many white-collar criminals seem untouchable or “too big to jail.” But are they really? The Follow the Money series explores various types of financial crimes and interviews experts in the field on how to bring these robber barons to justice.

Political corruption involves the use of public power for private benefit. It can occur at any scale. Corruption cases may involve bribery, extortion, embezzlement, fraud, and outright theft. It can also be more subtle, taking the form of favoritism, nepotism, and patronage. Some political corruption cases are so well obscured that they exist on the cusp of legality. But these are not victimless crimes.

Regarding fraud investigation, there are a couple of new deputies in town. Generative AI in the vein of ChatGPT can help identify and investigate sophisticated financial crimes, while ML-powered automation can improve detection and prevent reoccurrence. These new capabilities are particularly important in an era where every company is a de facto software company, with data, intellectual property, and financial assets that must be protected.

Ask a room of investment professionals to define cryptocurrency fraud, and at least one will tell you the term is redundant. The total amount of stolen cryptocurrency sits at over $46 billion in today’s value. But if you ask a room of forensics professionals to define cryptocurrency fraud, you’ll likely get a more serious and nuanced answer.

The mortgage crisis of 2008, when investigated by the Financial Crisis Inquiry Commission, was found to have been precipitated by an industry full of predatory and fraudulent practices. The commission referred dozens of cases to prosecutors. Although fines were paid, no one was indicted, no one was put on trial, and no one was jailed.

Fraud is big and getting bigger. Generally speaking, fraud is defined as actions that deceive for financial or personal gain—a category broad enough to include everything from lying about one’s age to masterminding a billion-dollar pyramid scheme.

White-collar crime is, on the surface level, nonviolent, which sometimes lends it a false patina of benignity. But these are not victimless crimes. In college admissions fraud, students gaining fraudulent admission to universities take places away from those who would earn it honorably, depriving them of high-quality education and the lifetime earnings that go with it.

Embezzlement isn't a perfect crime, but it can easily go unnoticed for long stretches, so to tackle embezzlement and bring its perpetrators to justice, forensic professionals need a skillset that blends expertise in IT, accounting, and investigations.

According to the US Department of Justice, one in every ten bankruptcy filings includes some element of fraud. While it directly affects businesses and financial institutions who act as creditors, it also has negative indirect effects on the consumer, as creditors increase their fees on credit cards and loans to compensate for losses to bankruptcy fraud.


Matt Zbrog

Matt Zbrog is a writer and researcher from Southern California. Since 2018, he’s written extensively about the increasing digitization of investigations, the growing importance of forensic science, and emerging areas of investigative practice like open source intelligence (OSINT) and blockchain forensics. His writing and research are focused on learning from those who know the subject best, including leaders and subject matter specialists from the Association of Certified Fraud Examiners (ACFE) and the American Academy of Forensic Science (AAFS). As part of the Big Employers in Forensics series, Matt has conducted detailed interviews with forensic experts at the ATF, DEA, FBI, and NCIS.