12 - White Collar, Corporate, and Organized Crime

Question 1

White Collar Crime

Answer 1

crime committed by those within legitimate occupations or organizations.

EX. Martha Stewart (insider trading)

Question 2

Organized crime

Answer 2

relatively structured hierarchical system, the goal of which is to provide consumers w/ goods for which there is a demand (including illegitimate so drugs, weapons, prostitution, some kinds of porn, gambling). Group crime w/ purpose of making money.

No demand = no org crime. Serving OUR interests and needs.

NOT an offence in Canada to belong to a criminal organization.

Question 3

Corporate Crime

Answer 3

crime committed by one or more employees of a corporation w/ the aim of furthering the interests of the corporation.

Causes more deaths in a month than all the mass murders do in a decade.

EX. illegal / unsafe working conditions

Explained by Social organization / structure of work, corporate culture, capitalism.

Question 4

Occupational Crime

Answer 4

Crimes committed by individuals for themselves in the course of rendering a service.

EX. Medicare fraud, misuse of client’s funds, substitution of inferior goods.

Employees may abuse authority for private gain - kickbacks, bribes, and favors. Believe organization can absorb loss.

Question 5

Types of White-Collar Crime

Answer 5

• Investment related crimes
• Bankruptcy fraud
• Fraud against the government
• Consumer Fraud
• Insurance Fraud
• Tax Fraud
• Bribery, corruption, political fraud
• Insider-related fraud

Question 6

Insider Trading

Answer 6

use of material, non-public, financial info to obtain an unfair advantage in trading securities

EX. Martha Stewart

Question 7

Stock Manipulation

Answer 7

making misleading or even false statements to clients to give impression that price of the stock is about to rise, thus creating artificial demand for it.

EX. Bre-Ex Minerals LTD or DEFY Media

Question 8

Bankruptcy Fraud

Answer 8

Any scam designed to take advantage of loopholes in the bankruptcy laws.

When bankruptcy petition is filed, the person or corporation’s property and financial obligations are disposed of.

Question 9

Governmental Fraud

Answer 9

• Collusion in bidding (contractors inflate gov contract pay)
• payoffs and kickbacks to gov officials
• expenditures by gov officials that exceed the budget
• filing false claims
• hiring of friends
• offers of inducements to gov officials.

EX. Canada gov sponsorship scandal

Question 10

Consumer Fraud

Answer 10

• Home improvement fraud
• deceptive advertising
• Telemarketing Fraud / phone scams
• Land fraud
• Business opportunity fraud (someone convincing you to invest fake opportunities)

Question 11

Insurance Fraud

Answer 11

Filing of false claims for life, fire, marine, casualty or other insurance.

Question 12

Tax Fraud

Answer 12

attempt to evade or defeat tax, non-payment of tax, or willful filing of a fraudulent tax return.

Question 13

Bribery, corruption, political fraud

Answer 13

objective of such offences vary - favors, special privileges, services, business.

Question 14

White Collar VS Corporate Crime

Answer 14

WCC = individuals / group committing for personal gain

Corporate = group to better company

Question 15

Organizational Structure / Social Organization of Work

Answer 15

Pyramid structure (CEO -> boss -> workers) causes diffusion of responsibility. Positions of power carry freedom from control.

“Juristic Person” - law treats corporations as ‘juristic persons’ [liable to same laws as an actual person] which presents practical difficulties.

“Executive Disengagement” - lower level employees assume executives left uninformed (assume execs not legally expected to have complete control over staff).

Question 16

Corporate Culture

Answer 16

Deviant and criminal behaviors may be encouraged (directly / indirectly).

Norms promoting ‘win at all costs’.

“Criminogenic market structure” - economic market structured in such way that tends to produce criminal behavior.

Question 17

Capitalism (in corporate crime)

Answer 17

Competitive, tends to promote greed, selfishness and crime.

Question 18

Costs of Corporate Crime

Answer 18

• Costs to consumers (price fixing, unsafe products [EX. Ford Pinto Case]).
• Costs to employees (illegal / unsafe work conditions).
• Costs to environment (immediate and long lasting).

Question 19

General Characteristics of Organized Crime

Answer 19

• Conspiratorial activity
• Economic gain
• Connection to legitimate activity (i.e. laundering money)
• Predatory

Question 20

Organized Crime Examples

Answer 20

• Italian Based Mafia: Reliance on ethnicity, family loyalty and a code of secrecy. Structured like a Sicilian Family. [EX Sicilian Mafia, ‘Ndrangheta, US branch of Cosa Nostra].
• Asian Based Groups: Cell system, Marijuana cultivation and exportation is common.
• Eastern European Groups: Influenced by shift fr communist to capitalist. Street level crime to fraud w/ technology. Actively involved in crimes of other organized crime groups.
• Indigenous Groups: Well-Established in prisons. Prison link used for recruitment and drug distribution. Linked to overrepresentation of Indigenous ppl in CJS.
• Outlaw Motorcycle Groups: Tightly knit, highly structured, violently control territory. EX. Hell’s angels (largest / most well established, 44 chpts in Can).

Question 21

Money Laundering

Answer 21

Making illegally obtained funds seem legitimate so that they can be spent or invested in the legitimate economy w/ out arousing suspicion. Profits made through organized crime are ‘dirty money’ so money must be laundered.