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Keeping a White Collar Clean

Shimmy Blum

Investigations, prosecutions, and prison sentences for white collar (financial) crimes in America have spiked significantly in recent years, leaving many members of the Orthodox community with the feeling that they are being singled out. Mishpacha questioned some experts in the field to determine if this is fact or fantasy.

Wednesday, April 27, 2011

newsLast May, Assistant US Attorney General Lanny Breuer issued a not-so veiled warning when he labeled our times “a new era of heightened white collar crime enforcement — an era marked by increased resources, increased information sharing, increased cooperation and coordination, and tough penalties for corporations and individuals alike.”

Since the 1990s, when white collar crimes took a backseat to violent crime, the former’s prominence in the eyes of law-enforcement officials has risen dramatically.

Early in the last decade, after the passage of the Sarbanes-Oxley Act, federal sentencing guidelines were changed to increase jail terms for white collar criminals. Statistics show that between 1995 and 2008, the average sentence for a federal white collar criminal rose from 18 to 28 months.

“Judges are no longer handing down six-month sentences for these crimes; they’re far harsher that they were even five years ago,” says Chaim H. Leshkowitz, senior partner in the Leshkowitz and Company accounting firm as well as an attorney specializing in tax and other financial matters. “The criminal justice system is sick and tired of what it sees as white collar criminals gaining an unfair advantage over law-abiding citizens.”

The frum community’s awareness of the serious consequences of white collar crime has been significantly heightened in recent years, due in part to several high-profile investigations and convictions of frum individuals. “I recently visited the prison in Otisville, New York [where there are a number of frum inmates] and the situation is very sad,” says Mr. Leshkowitz. “I saw several people incarcerated there for relatively minor fraud amounts.”

Despite the attention on our communities that the investigations and the resulting media coverage have brought, Mr. Leshkowitz states his unequivocal belief that the law-enforcement officials don’t profile or discriminate against particular communities and do treat his clients of all ethnicities equally.

Prominent defense attorney and former prosecutor Jacob Laufer, concurs, but notes that even the fact that frum Jews attract equal suspicion and treatment under the law represents a stark decline in their image in the eyes of the law-enforcement community. “Years back,” he relates, “if an agent felt the need to question a Yid with a beard and peyos, he’d almost apologetically ask, ‘Rabbi, can you please explain us this transaction? We’re having some difficulty understanding it.’ This sense of deference no longer exists.”

Legal experts warn that although our community is treated fairly, its members should be especially vigilant in their financial transactions because there are several factors that can unwittingly draw greater scrutiny to frum individuals and institutions.


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