Study Shows Government Prosecution of White-Collar Crime Has Declined

A new study by Syracuse University’s Transactional Records Access Clearinghouse (TRAC) shows that the Department of Justice’s prosecution of white collar crime has declined over the past decade.

Based on DOJ records from 2004 to 2014, the study found that the DOJ’s prosecution of white collar criminals decreased by 29 percent, even in the face of an increase in referrals for prosecution from the FBI and the IRS.

The study showed that during that same time period, the DOJ’s prosecution of individuals has increased by more than 25 percent. According to TRAC, a significant number of these prosecutions were for violations of U.S. immigration laws.

The study attributed this shift to a 2008 memo by Deputy Attorney General Mark Filip that urged prosecutors to “take into account the possible substantial consequences to a corporation’s employees, investors, pensioners and customers” when making decisions on filing indictments. At the time, the precarious U.S. economy is believed to have been behind the DOJ’s preference for seeking monetary settlements in order to avoid prosecutions of corporations that could result in mass layoffs.

David Burnham, the author of the study, noted that examination of DOJ records show that the agency’s practices do not align with its stated commitment to prosecute corporate and white collar crime. ““Every time there’s a new Enron or Madoff or whatever scandal the DOJ runs out and says it’s going to go after corporate crime,” said Burnham. “In fact, they don’t.”

Another TRAC study released earlier this year, which examined the DOJ’s prosecution of white collar crimes against corporations and individuals, found that the number of prosecutions had dropped by more than 36 percent over the past 20 years.

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