White-collar crime prosecutions continued their two-decade decline in 2021, plummeting from 9,507 prosecutions in 2001 to a projected 4,727 prosecutions in 2021.
Prosecution rates have varied during the pandemic: Justice Department data confirms that during the first nine months of 2021 the government reported 3,545 new white-collar crime prosecutions.
Transactional Records Access Clearinghouse (TRAC) at Syracuse University, a data analysis organization, estimates that the number of 2021 prosecutions will total 4,727 by the year’s end — an 11 percent increase since the pandemic’s height, when COVID-19 “temporarily depressed prosecution levels,” a TRAC report reads.
But placed in context, 2021 prosecution case numbers confirm a long-term trend: white-collar crime prosecutions have declined dramatically over the past 20 years. The number of prosecutions dropped by 50.3 percent between 2001 and 2021, especially declining during the Trump administration.
Evaluating the Report
Recent TRAC reports detailing the decline of white-collar crime prosecutions have proven controversial.
Last year, the Justice Department disputed the findings of a March 2020 TRAC report that documented the downward decline, prompting department spokesman Peter Carr to release a statement questioning TRAC’s standards, Market Watch reported.
“TRAC uses its own methodologies in interpreting the data it receives, resulting in conclusions that we cannot verify,” Carr said.
“Data provided by TRAC routinely differs from data and statistics reflected in the Executive Office of U.S. Attorneys’ published annual reports, DOJ’s main litigating division reports, U.S. Sentencing Commission data and U.S. Courts data.”
While Justice Department officials were insisting that the TRAC report presented an underestimate of white-collar crime prosecutions, other legal experts were more concerned with the apparent leniency of district attorneys, state prosecutors and the federal government.
“It’s a matter of concern that federal prosecutions of white-collar fraud have declined so precipitously.”
The decline in prosecutions may indicate the priorities of the federal government: since 2001, resources have been diverted toward anti-terrorism and immigration cases, potentially straining the government’s ability to prosecute white-collar crime, said Sklansky, who added that he trusts TRAC’s data analysis.
Other Findings: Wire Fraud Dominates Prosecutions
The current TRAC report also presents trends about white-collar crime by investigative agencies, lead charges and judicial districts.
So far, the Federal Bureau of Investigation (FBI) has handled over a third of prosecutions during 2021. The lead investigative agencies trailing the FBI are the Internal Revenue Service, the Postal Service, the Secret Service and Health and Human Services. Still, FBI involvement in white-collar crime prosecutions has declined since 2001.
“As FBI refocused more of its efforts on combatting terrorism, the FBI’s role has diminished,” the TRAC report reads. “And even more recently, all other agencies also contributed fewer cases so although the number of FBI-lead investigations continued to fall the percentage this represented has begun to rise.”
Regardless of agency involvement, clear patterns define lead charge types, with fraud by wire, radio, or television amounting to the most common kind of prosecution. Also predominating are bank fraud, mail fraud and health care fraud.
Fraud and false statements in tax matters showed the sharpest projected decline in prosecutions between 2020 and 2021, as well as the largest projected decrease — 51 percent — over the past five years.
“This is likely to reflect the staffing cutbacks at the Internal Revenue Service rather than an actual decrease in the incidence of such tax frauds,” the TRAC report reads.
The report also delineates white-collar crime prosecution numbers by federal judicial district, identifying the District of Rhode Island as the most prolific, followed by the Western District of Virginia (Roanoke) and the Southern District of Florida (Miami). By the year’s end, white-collar crime prosecutions will reach an estimated 14.4 per one million people in the U.S.
The full TRAC report is available here.
This report was prepared by TCR Justice Reporting intern Eva Herscowitz.