The Cost of Being Wrongly Accused of White Collar Crime

When is the biggest blow dealt against someone accused of white-collar crime? Is it when a judge passes sentencing? Is it when they appear in the docks of a courtroom? Or is it much earlier in the process?


In this article, we will look at the personal cost of simply being accused of a white-collar crime. Not being found guilty, or jailed, but simply being accused.


This is a big issue for the legal system because we will make the case in this article that being publicly accused of a crime is a punishment. The problem with this is that there is a fairly low bar for accusations, compared to the high burden of proof required to find someone guilty in a court of law.


Innocent people are accused of white-collar crimes, so the negative impact these have upon their reputation and finances is a serious problem.


The legal system has an official answer to this problem. The assumption of innocence until guilt is proven is a principle enshrined in the British system.


By officially giving the accused the status of ‘innocent’ until proceedings have concluded, the authorities can argue that a reputation remains intact throughout. This means that if the defendant is found innocent or the prosecution is dropped, they can walk away without reputational tarnish.


However, does that principle protect those falsely accused of white-collar crimes in real life?


The answer is no. Only courts operate under the principle of ‘innocent until proven guilty. This rule doesn’t tie the hands of employers or customers of the accused, who may simply ask ‘does it look more likely than not that they did it?’. This can lead to impacts for the accused before any court showdown takes place, providing a legacy for even a brief accusation period.



The cost of being accused


First, let’s consider the financial cost of being accused. Defending oneself against accusations is expensive as a lawyer may need to be retained immediately, regardless of whether the case eventually ends up in court or not.


The initial legal cost is directly caused by being accused, not by being found guilty. Defendants often have little recourse to recover legal costs such as these even if the case against them is flawed and is subsequently dropped by investigators.


Next, there’s the impact on one’s employment. High-profile figures such as actors, business leaders and politicians often feel the pressure to step down shortly after allegations are made. Other employees find themselves fired from their current roles in advance of formal trial proceedings. It’s common to see employees ‘suspended pending further investigation’, but even this suspension carries its own reputational impact even if it is later reversed.



Avoiding false accusations


What we have hopefully demonstrated so far, is that it isn’t enough to simply be innocent of committing a white-collar crime, but you must also strive to avoid triggering the lower bar of being accused.


In other words, you must be wary of your actions and the optics of what you do, so that you do not accidentally create suspicion in regulators, employers, or colleagues.


This is often accidentally done with loose words & dark humour, which can often slip out while you are intoxicated, so be very careful when joking about serious topics such as fraud while at social events. In your mind, a statement could be clearly a joke, but others may be left wondering whether there was a grain of truth in what you said. This may sew a seed of suspicion that could lead to a false accusation.


When making decisions, you should consider the optics of your actions rather than only the substance. This is like the ethics recommendation of acting independently ‘in substance’ and ‘in appearance’. This reinforces the idea that simply acting properly isn’t enough if you do so in a way that could arise suspicion and therefore undermine your reputation.


This means being aware when you are deciding that although an action may be above board, it could look inappropriate to a third party who does not hold as much context or insight into the process you have followed.

Where your decision is sound, you may decide to ‘show your workings’ and voluntarily disclose more information than necessary to provide enough transparency to avoid any misunderstandings.


Ultimately you cannot guarantee that you will never be falsely accused of a crime. But by following these tips, you may avoid the unnecessary pain of being temporarily swept into the criminal justice system.


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