Recently, I’ve come across two notable instances of white-collar crime.
The first involves some summer camp owners for women who seemingly misled parents, vendors, and counselors by continuously declaring bankruptcy. The second case features an attorney who might have manipulated a young client into signing over ownership of his technology firm.
Both matters certainly warrant thorough investigations by their respective U.S. law firms. However, given the limited resources available, it’s unlikely they will face real consequences.
It’s easy to think of the financial penalties collected by the Justice Department as merely budgetary measures. In reality, these fines contribute to a less-publicized Crime Victims Fund. This means that narrowing white-collar crime enforcement results in more than just uncollected fines—it implies that scammed retirees won’t see reparations. Survivors of domestic violence might find themselves without support in shelters, while victims of human trafficking are often left high and dry.
The Crime Victims Fund, which aids around 4.2 million victims annually, plays a crucial role in funding programs addressing issues like child abuse, domestic violence, and identity theft. The Department of Justice provides grants to states for local services, with this Fund being financed through federal fines rather than taxation.
Over the past seven years, however, the Fund has seen a steady decline in resources, mainly due to its structure and an apparent mismatch with an increase in non-criminal resolutions. These resolutions funnel funds away from the Crime Victims Fund into the General Fund of the Treasury.
In 2021, Congress attempted to salvage the fund by passing amendments aimed at redirecting revenue from deferred prosecutions to it. These modifications have proven somewhat successful, contributing over $2.35 billion, which accounts for nearly 30% of the total funds in the last five years. The Fund’s recovery underscores a tough reality: the level of support for crime victims relies heavily on consistent and robust federal white-collar enforcement.
While these amendments provided a temporary boost, their success is contingent on the very prosecutions that are declining. Furthermore, the Biden administration has defended these revisions as a means of addressing the Fund’s depletion, although Congress has subsequently approved a significant reduction in funding from $1.9 billion in 2023 to $1.35 billion in 2024.
Such substantial cuts have proved disastrous for many programs, and the nation is now scrambling to bridge the growing funding gap.
In Washington, lawmakers have tried to push through a bill by 2029 that would secure $50 million annually for victim services. When that didn’t pan out, they turned to raising marriage license fees—by $100, no less. In California, funding of $103 million was assigned in 2024 to fill the gaps, but it’s unclear if those funds will be available next year. Meanwhile, Arkansas has faced a $4 million cut over four years, which is tough to recover from.
As someone who works in corporate defense, I believe that while some of the Department of Justice’s recent prosecution strategies have become overly broad, there is still a pressing need for genuine, non-political enforcement of white-collar crime. If victims are to rely on strong enforcement for restitution, the Department should refocus on serious misconduct instead of allowing it to slide.
It’s true that prosecuting camp directors and small-scale crypto lawyers might not significantly alleviate the funding crisis for crime victims. Yet, these examples highlight a larger issue of unchecked white-collar crime, which sets a troubling precedent, especially when costs are shifted to taxpayers or couples merely seeking to wed, rather than holding wrongdoers accountable.
It’s disheartening to see the Department of Justice’s focus shift from fighting crime to business operations. Right now, we risk swinging too far in the other direction.
The intent behind the Crime Victims Law wasn’t supposed to be political; it was meant to deliver justice, support, and compensation. If white-collar law enforcement slows down, it undermines both of these objectives, exacerbating harm while depriving resources for recovery.
As support programs dwindle or disappear, the administration’s stance on white-collar enforcement should align with the increasing deficit in the Crime Victims Fund. The future of this Fund and its beneficiaries rests on it.
