A form ofwhite-collar crime,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 isdefalcation.
A skimming crime may be simpletax evasion: 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 withoutaccounting for theprofit, thereby the owner avoids paying either business or personalincome taxes on it. A famous example of this crime occurred atStudio 54discotheque,[1] which was forced to close as a result.
Skimming may additionally be the directtheft of cash; in addition to hiding it from tax authorities, the perpetrator hides the taking from an employer (embezzlement), business partners, or shareholders. A large-scale allegation of this kind has been levelled atSatyam Computer Services concerning thebillion dollars missing from the company's coffers.[2]
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 anextortionist in the form of abribe,kickbacks, or payment to aprotection racket orloan shark or even ablackmailer.
Skimming atcasinos is associated with the funding oforganized crime. In May 1963, theFBI turned over to theJustice Department a two-volume document calledThe Skimming Report which detailed the skimming ofgambling profits byLas Vegascasinos to avoid taxes.[3] The report documented howpre-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 illegallybugging casino money rooms. Casino skimming during the 1970s and 1980s is featured inNicholas Pileggi's nonfiction bookCasino: Love and Honor in Las Vegas and in the filmCasino, which is based on it.
Other related usages can include things such ascorrupt government officials "skimming" cash received asforeign aid.[4]