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 Defalcation is misappropriation of funds by a person trusted with their charge; also, the act of misappropriation, or an instance thereof. The term is more specifically used by the United States Bankruptcy Code to describe a category of acts that ...

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 for the profit, 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. Tax ...

es on it. A famous example of this crime occurred at Studio 54

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 entertai ...

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 The Federal Bureau of Investigation (FBI) is the domestic intelligence and security service of the United States and its principal federal law enforcement agency. Operating under the jurisdiction of the United States Department of Justice, t ...

turned over to the Justice Department 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 el ...

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 Vegas ...

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 entertai ...

'', 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, 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 Extortion is the practice of obtaining benefit through coercion. In most jurisdictions it is likely to constitute a criminal offence; the bulk of this article deals with such cases. Robbery is the simplest and most common form of extortion, ...

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

References

{{reflist Finance fraud Organized crime activity