This is one of the reasons that the United States Supreme Court has noted the difficulty in distinguishing common crime from the "gray zone of socially acceptable and economically justifiable business conduct.
Prosecutors are not eager to 'overcriminalize' and the practice of too readily extending criminal law to areas of which it is not suited is known as "overcriminalization."
For these reasons, the statues of white-collar crimes are broad and fuzzy. And the task, therefore, of defining crime and penalties falls firstly to the prosecutors and then to the court. In the 1980s, the prosecutors read the white collar statutes broadly and the courts were expected to set the perimeters of criminal labiality. There is wide scope however of criminal liability under these white collar statutes.
Is this fair?
For decades, academicians have been calling for change in this, what they see, as unjust and partisan system. To them, the system contains at least two wrongs: Firstly, it places too much power in the hands of prosecutors. Secondly, the system invests prosecutors with the ability to accord differential treatment based upon partisan allegiances. The issues, back and forth about the fairness or unfairness of the discretionary system are febrile and ongoing. They are covered in the following two sections.
6. Arguments in favor of discretion
White-collar crime is seen as a "malum prohibitum," which means that the public makes a distinction between that and common crime and, in order to maintain the public perception of the severity of common crime, supporters of prosecutorial discretion argue that this '"malum prohibitum" perception should be retained. Prosecutorial discretion has been an entrenched and accepted part of the criminal justice system ever since the beginning and will likely remain so in the future.
Most supporters also see the system as generally fair. Sometimes, there is an 'overzealous' prosecutor but he is held in check by the controlling judge who words the statutory language of the white-collar case in such a way that the underlying 'innocence' of the moral intention comes through.
Finally, supporters of the system laud it for its flexibility. Frequently, perpetrators of white-collar crime are unintentionally committing these crimes. They belong in the civil arena, rather than as deliberate offense against private others and their possession; neither are they meant to deliberately hurt others. Prosecutors are, generally, fair and unbiased. When they tend to be overzealous, a judge corrects them. With this being the case, therefore, prosecutorial discretion has always been the criminal system. Supporters of prosecutorial discretion, therefore, say that there is no need to change it. Prosecutors go to great pains to ensure rational and unbiased judgment. Lapses hardly occur. When they do occur, overarching judges are carful to remand them.
7. Arguments against the exercise of discretion
Whilst some see the prosecutorial discretion as a blessing and as an inalterable part of the American criminal system, others see it as a curse. Not only does it place too much power in the hands of prosecutors but it can also lead to partisan and biased judgments.
One such case that made headlines was the decision by the U.S. Attorney's Office for the Central District of California against prosecuting Lance Armstrong. Admittedly, they had good reason: recent federal prosecutions that involved drug use by celebrities expended a great deal of money with poor or no results. If Armstrong did dope, his doping was not a federal crime. Finally -- and this is where it turned controversial -- Armstrong is enormously popular with a great deal of money. The prosecutors (some said) were swayed by this force (Prosecutorial Discretion Is the Better Part of Valor (Feb 8, 2012)).
There is no reason -- critics argue -- that white-collar offenders should be treated more deferentially than 'common' criminals. They hurt people as badly, if not more so, than common criminals do, and to differentiate on the basis of class and status alone is not only not fair but also not democratic.
Discretion, furthermore, also eventuates in inconsistent sentences which only lead to breakdown in respect of the law and to potential perpetration of further white-collar crimes. Deterrence can only be assured by a consistent set of sentences that shows no favoritism to any one individual or organization and where the sentence does not lie on the particular individual engineering it. Morally credible enforcement procedures, accordingly, would not only serve as greater deterrence but would also ascertain that individuals have a greater respect for the law and more instantly become law-abiding citizens.
8. Limits on discretion
White collar crimes are an often "malum prohibitum" crime which means that they do not appear as common crimes to the public perception although it is a crime to engage in such conduct. Fallone (2012) argues that the person who overlooks the fact that it is a "malum prohibitum" crime and deliberately engages in such a crime should receive different treatment (and the criminal status) than one who treats it as a "malum prohibitum" offense. Such a person is morally culpable and should be prosecuted since he deliberately engaged in such an offense. On the other hand, the one who unintentionally committed such a crime should receive a less sever penalty than the other although some penalty is in order due to the fact that "ignorance of the law is no defense."
A prosecutor's charging decisions should generally reflect these principles. Sometimes, there is an 'overzealous' prosecutor but he is held in check by the controlling judge who words the statutory language of the white-collar case in such a way that the underlying 'innocence' of the moral intention comes through. Such was the case in Justice Thomas' opinion for the Supreme Court in Staples v. United States, or in the Supreme Court's conduct in Liparota v. United States decision.
Moohr (nd) thinks that the system should revolve around an inquisitorial approach where a jury would act as check on, and investigate the prosecutor's decision. However, there seems to be little sign that the system will be changed -- at least not in the near future.
Issues of discretionary freedom with white collar crime are febrile and ongoing. On the one hand, critics complain that prosecutors have too much freedom in deciding whether or not white collar crime is criminal and in deciding how to penalize it. On the other hand, supporters of the system say that the system is mostly fair and that it is distinguished from criminal activities in that it deals with civil content. In this way, white-collar crime cannot be judged as a criminal matter and must be accorded different conditions. Critics, however, dispute that saying that there is no reason why white-collar crime which is just as severe as common crime, if not more so, should be treated in a more deferential way.
Suggestions such as inquisitorial trials (with jury assessing prosecutorial decisions) have been suggested, but none have been taken seriously. Fallene (2012) thinks that the issue will not be so readily solved since prosecutorial discretion has been an entrenched and accepted part of the criminal justice system ever since the beginning and will likely remain so in the future. This is mostly due to the fact that white collar crimes are often "malum prohibitum" crimes which mean that they do not appear as common crimes to the public perception although it is a crime to engage in such conduct. They are therefore open to broad treatment and interpretation. The best one can do is monitor prosecutorial decisions with presiding judge, and this is what is being done at the moment.
Bureau of Justice Statistics, United States Department of Justice, Dictionary of Criminal Justice Data Terminology 215, 1981
Justia. U.S. Supreme Court "Braswell v. United States, 487 U.S. 99, 115," 1988