Who Investigates and Prosecutes White Collar Crime?

Author: Nyman Gibson Miralis

Subject: White Collar Crime

Keywords: white collar crime Australia, white collar crime, civil and criminal penalties, investigating and prosecuting white collar crime.

 

The variety of criminal activities that come under the definition of “white collar” means there are several agencies that are responsible for investigating and prosecuting white collar crime in Australia.

White collar crime is also notoriously difficult for authorities to deal with, due in part to how easily these types of crimes can be covered up by the perpetrators.

 

What are some Potential issues with enforcement of white collar crime?

The challenges authorities face in dealing with white collar crime include:

  • High evidentiary standards (even in civil proceedings).
  • Difficulty detecting and subsequently establishing the commission of crimes – particularly in circumstances where perpetrators are often able to cover their tracks.
  • Poor corporate compliance and cooperation with the agencies responsible for investigation and enforcement.

In ordinary civil proceedings, most parties are motivated by the sheer expense of participating in litigation to resolve matters expeditiously. However, this incentive may be irrelevant to the types of wealthy individuals or companies who often commit corporate crimes.

In practice, this leads regulatory bodies to settle prematurely to avoid the ongoing drain of financial resources in prosecuting futile actions.

Although the usual civil burden of proof of a “balance of probabilities” is unchanged in non-criminal white collar proceedings, the Briginshaw principle dictates that the more serious an allegation (and the concomitant potential penalties), the higher the standard of proof required to prove the allegations.

This effectively means that the burden of proof for many white collar crimes is close to the criminal burden of “beyond reasonable doubt”.

A related difficulty is the disparity in the way in which evidence is treated by courts in different states, given the absence of national uniformity in evidence law and court procedure.

As a new Senate report Lifting the fear and suppressing the greed: Penalties for white collar crime and corporate and financial misconduct in Australia points out, the enforcement challenge is therefore that judgments and punishments across Australia are not always consistent with each other, despite potentially relating to very similar crimes.

 

Which agencies are responsible for investigating white collar crime?

As the corporate watchdog, many white collar offences come under the Australian Securities and Investments Commission’s (ASIC) purview.

ASIC has the power to:

  • Take administrative action including banning or disqualifying people from running companies or corporations or cancelling/suspending terms of a financial services licence.
  • Issue civil proceedings on behalf of those who have suffered loss with a view to obtaining compensation or seeking to compel compliance with the law.
  • Pursue wrongdoers through federal courts seeking to impose monetary civil and criminal penalties including imprisonment and community service orders.

ASIC Chairman Greg Medcraft has previously criticised the penalties which can be imposed on white collar criminals. In October 2016, an ASIC Enforcement Review Taskforce was announced by the federal government. It is anticipated that the review will examine relevant legislation and provide commentary on the adequacy of ASIC’s punitive and interventionist powers.

With a similar rationale to ASIC’s powers of enforcement and investigation, the Australian Taxation Office (ATO) also has the ability to impose and collect financial penalties in relation to crimes or offences committed under the taxation or superannuation legislation.

Like ASIC, the ATO can take action including:

  • Imposing civil penalties for breaches of applicable legislation.
  • Issuing administrative penalties.
  • Pursuing summary offences in relation to “minor” breaches of taxation law.
  • Seeking criminal prosecution and appropriate penalties for significant tax crimes.

The Australian Competition and Consumer Commission (ACCC) is another Commonwealth body with a significant role to play in dealing with white collar crime. Unlike ASIC and the ATO, the ACCC cannot itself determine breaches of legislation or impose penalties. However, it is able to join civil actions as a plaintiff, and can refer matters to the Commonwealth Department of Public Prosecutions (CDPP) for criminal prosecution.

 

What is the role of the Australian Federal Police (AFP)?

The majority of white collar crimes committed in Australia breach federal legislation and laws, such as the Corporations Act 2001 (Cth), the Australian Securities and Investments Commission Act 2001 (Cth) and the Superannuation Industry (Supervision) Act 1993 (Cth).

Accordingly, police investigations are run by the AFP. The AFP is also entitled, in conducting its investigations and preparing briefs for prosecution, to seek to recover ill-gotten funds in accordance with the provisions set out in the Proceeds of Crime Act 2002 (Cth), as recently strengthened by the Crimes Legislation Amendment (Proceeds of Crime and Other Measures) Act 2016 (Cth).

The Australian Transaction Reports and Analysis Centre (AUSTRAC) also has a role in investigating white collar crime, and passes on relevant information to the AFP and to prosecuting bodies.

 

Who prosecutes alleged white collar offenders?

Once investigated, crimes committed under federal legislation are prosecuted by the Attorney-General’s Department  (AGD) and the Commonwealth Director of Public Prosecutions (CDPP), although some minor regulatory matters may be prosecuted by ASIC directly.

The AGD is responsible for administering offences under the Criminal Code Act 1995, which include money laundering, forgery, bribery and Commonwealth Government fraud.

In addition to these Australian agencies, there are numerous multi-agency bodies, such as the Serious Financial Crime Taskforce (SFCT) which combine resources with a view to reducing and ultimately eliminating the presence of white collar crime. SFCT has powers to investigate international crimes including phoenix activities and tax evasion, while cooperating with international law enforcement bodies.

 

Conclusion

In attempting to tackle the apparent prevalence of white collar crime in Australia, there are many agencies with the power to investigate and prosecute those suspected of illegal white collar activities. Depending on the outcome of the ASIC review and the reforms proposed in the Senate report, significant changes to how white collar crime is dealt with may also be on the horizon.

 

Nyman Gibson Miralis specialise in all aspects of white collar crime and corporate crime law, including laws concerning bribery of foreign public officials. If you require assistance, contact one of our expert criminal defence lawyers