A form of

white-collar crime The term "white-collar crime" refers to financially motivated, nonviolent or non-directly violent crime committed by individuals, businesses and government professionals. It was first defined by the sociologist Edwin Sutherland in 1939 as "a ...

, skimming is taking cash "off the top" of the daily receipts of a business (or from any cash transaction involving a third interested party) and officially reporting a lower total. The formal legal term is defalcation.

Examples

A skimming crime may be simple

tax evasion Tax evasion is an illegal attempt to defeat the imposition of taxes by individuals, corporations, trusts, and others. Tax evasion often entails the deliberate misrepresentation of the taxpayer's affairs to the tax authorities to reduce the tax ...

: the owner of a business may fail to "ring up" a transaction and pocket the cash, thus converting a customer's payment directly to the owner's personal use without

accounting Accounting, also known as accountancy, is the measurement, processing, and communication of financial and non financial information about economic entities such as businesses and corporations. Accounting, which has been called the "languag ...

for the

profit Profit may refer to: Business and law * Profit (accounting), the difference between the purchase price and the costs of bringing to market * Profit (economics), normal profit and economic profit * Profit (real property), a nonpossessory inter ...

, thereby the owner avoids paying either business or personal

income tax An income tax is a tax imposed on individuals or entities (taxpayers) in respect of the income or profits earned by them (commonly called taxable income). Income tax generally is computed as the product of a tax rate times the taxable income. Ta ...

es on it. A famous example of this crime occurred at

Studio 54 Studio 54 is a Broadway theater and a former disco nightclub at 254 West 54th Street in the Midtown Manhattan neighborhood of New York City. Operated by the Roundabout Theatre Company, Studio 54 has 1,006 seats on two levels. The theater w ...

discotheque A nightclub (music club, discothèque, disco club, or simply club) is an entertainment venue during nighttime comprising a dance floor, lightshow, and a stage for live music or a disc jockey (DJ) who plays recorded music. Nightclubs gene ...

, which was forced to close as a result. Skimming at

casino A casino is a facility for certain types of gambling. Casinos are often built near or combined with hotels, resorts, restaurants, retail shopping, cruise ships, and other tourist attractions. Some casinos are also known for hosting live enterta ...

s is associated with the funding of

organized crime Organized crime (or organised crime) is a category of transnational, national, or local groupings of highly centralized enterprises run by criminals to engage in illegal activity, most commonly for profit. While organized crime is generally th ...

. In May 1963, the FBI turned over to the

Justice Department A justice ministry, ministry of justice, or department of justice is a ministry or other government agency in charge of the administration of justice. The ministry or department is often headed by a minister of justice (minister for justice in a ...

a two-volume document called ''The Skimming Report'' which detailed skimming of

gambling Gambling (also known as betting or gaming) is the wagering of something of value ("the stakes") on a random event with the intent of winning something else of value, where instances of strategy are discounted. Gambling thus requires three ele ...

profits by

Las Vegas Las Vegas (; Spanish for "The Meadows"), often known simply as Vegas, is the 25th-most populous city in the United States, the most populous city in the state of Nevada, and the county seat of Clark County. The city anchors the Las Veg ...

s to avoid taxes. The report documented how pre-tax profits from casinos were being routed to various organized crime syndicates across the nation. No one could be prosecuted as the FBI obtained its information by illegally

bugging A covert listening device, more commonly known as a bug or a wire, is usually a combination of a miniature radio transmitter with a microphone. The use of bugs, called bugging, or wiretapping is a common technique in surveillance, espionage and ...

casino money rooms. Casino skimming during the 1970s and 1980s is featured in

Nicholas Pileggi Nicholas Pileggi (, ; born February 22, 1933) is an American author, producer and screenwriter. He wrote the non-fiction book '' Wiseguy'' and co-wrote the screenplay for ''Goodfellas'', its 1990 film adaptation, for which he received a nominati ...

's nonfiction book '' Casino: Love and Honor in Las Vegas'' and in the film ''

Casino A casino is a facility for certain types of gambling. Casinos are often built near or combined with hotels, resorts, restaurants, retail shopping, cruise ships, and other tourist attractions. Some casinos are also known for hosting live enterta ...

'', which is based on it. Skimming may additionally be the direct

theft Theft is the act of taking another person's property or services without that person's permission or consent with the intent to deprive the rightful owner of it. The word ''theft'' is also used as a synonym or informal shorthand term for som ...

of the cash; in addition to hiding it from tax authorities, the perpetrator hides the taking from an

employer Employment is a relationship between two parties regulating the provision of paid labour services. Usually based on a contract, one party, the employer, which might be a corporation, a not-for-profit organization, a co-operative, or any o ...

, business partners, or shareholders. A large scale such allegation has been leveled at

Satyam Computer Services Mahindra Satyam (formerly Satyam Computer Services Limited) was an Indian information technology (IT) services company based in Hyderabad, India, offering software development, system maintenance, packaged software integration and engineerin ...

concerning the billion dollars missing from the company's coffers. Skimming may be necessitated by a third crime; for example, an otherwise honest businessman who pays taxes and does not cheat his partners might still be forced to skim some cash from the business and use it to give to an extortionist in the form of a

bribe Bribery is the offering, giving, receiving, or soliciting of any item of value to influence the actions of an official, or other person, in charge of a public or legal duty. With regard to governmental operations, essentially, bribery is "Corru ...

kickbacks A kickback is a form of negotiated bribery in which a commission is paid to the bribe-taker in exchange for services rendered. Generally speaking, the remuneration (money, goods, or services handed over) is negotiated ahead of time. The kickbac ...

, or payment to a

protection racket A protection racket is a type of racket and a scheme of organized crime perpetrated by a potentially hazardous organized crime group that generally guarantees protection outside the sanction of the law to another entity or individual from viol ...

loan shark A loan shark is a person who offers loans at extremely high interest rates, has strict terms of collection upon failure, and generally operates outside the law. Description Because loan sharks operate mostly illegally, they cannot reasonably ...

or even a

blackmailer Blackmail is an act of coercion using the threat of revealing or publicizing either substantially true or false information about a person or people unless certain demands are met. It is often damaging information, and it may be revealed to fa ...

. Other related usages can include things such as corrupt government officials "skimming" cash received as

foreign aid In international relations, aid (also known as international aid, overseas aid, foreign aid, economic aid or foreign assistance) is – from the perspective of governments – a voluntary transfer of resources from one country to another. Ai ...

References

{{reflist Finance fraud Organized crime activity