17: Corporate And White Collar Crime Flashcards
LO 1:
Describe the concept of white collar crime and explain the impact the notion of white-collar crime has had on the discipline of criminology
Term “White-collar crime” was introduced by Sutherland (1940): “a crime committed by a person fo respectability and high social status in the course of his occupation.”
- The study of white-collar crime has shown criminologist that the relationship between class and crime is much more complicated than previously assumed.
- Corporate and white-collar offenders engage in illegal activities in the course of their legitimate occupations.
- White-collar crimes are often committed through and on behalf of legitimate businesses.
- No longer is it possible to take definitions of crime for granted
- Official data on crime by agencies of crime control can no longer be accepted uncritically
- the poor are not necessarily more criminal than the rich
- criminology enterprise has taken on new form and substance
LO 2:
Understand the occupational and organizational components of white-collar crime
Occupational - Refers to violations of the law in the course of practicing a legitimate occupation
Organizational - White-collar crime committed with the support and encouragement of a formal organization and intended, at least in part, to advance the goals of that organization.
White-collar crime
Sutherland (1940): “a crime committed by a person fo respectability and high social status in the course of his occupation.”
Occupational crime
Refers to violations of the law in the course of practicing a legitimate occupation
Opportunities come from the company, against the public or the employer, for a person’s own gain.
Organizational or corporate crime
White-collar crime committed with the support and encouragement (or on behalf of) of a formal organization and intended, at least in part, to advance the goals of that organization. Crimes against the public/government/own employees (dangerous environment)
Juristic persons
The legal concept that corporations are liable to the same laws as natural persons. Treating corporations as individuals raises practical difficulties for legal enforcement and punishment.
Executive disengagement
The custom by which lower-level employees assume that executives are best left uninformed of certain decisions and actions of employees, or the assumption that executives cannot be legally expected to have complete control over their individual staff.
Criminogenic market structure
An economic market that is structured in such a way that it tends to produce criminal behaviour.
3 Components of upper-class people’s personality
A competitive spirit
Arrogance
A sense of entitlement
Ponzi scheme
A fraud in which old investors are paid with the funds invested by new investors. When the scheme runs out of new investors, the scheme collapses.
LO 3:
Explain the physical and social harm caused by white-collar crime in Canada
- Financial Collapse in 2008 (NINJA loans and packaged loans to people who would not be able to pay them back)
- Consumer safety issues (eg. toys from china, pet food)
- Opioid crisis - pharmaceutical industry (Purdue Pharma - OxyContin) to blame as it started with prescription pain killers that were addicting (BC 1448 deaths in 2016 - 64,000 people died from overdose in 2016 in the US).
- Environmental fraud - the case of VW
LO 4:
Analyze how the structure of the modern corporation facilitates criminal activity.
- competitive pressure and insecurity in the corporations foster a culture that encourages misconduct. Success in business if often measured by the size of the executive’s salary may help explain why some executives will break the rules to make even more money.
- the law treats corporations as “juristic persons” which means they are held liable to the same laws as “natural persons” – BUT it is impossible to imprison a corporation.
- executives are not held reliable for knowing what is going on within the company, so then they also cannot be imprisoned (executive disengagement). Freedom from control and limited liability
- a corporation can be fined, but it is difficult to punish a corporation harder, which makes corporations more likely to break the law knowing that there is a very small chance it will have impact on the persons running the corporations.
LO 5:
Understand the nature and extent of occupational crime
Refers to violations of the law in the course of practicing a legitimate occupation. Opportunities come from the corporation, against the public or the employer, for a person’s own gain.
- Unprofessional conduct and malpractice (eg. the maltreatment of Indigenous children in residential schools, abuse of children in orphanages and churches, Medical doctors: false billeting, taking bribes to give people prescriptions for addictive drugs, sexual misconduct)
- Self-governing professions - processes are not always effective.
- Investment schemes have cost people all their savings
- Insider trading
- “Pump and dump” stock scam (Bre-X)
LO 6:
Understand the causes and the consequences of our weak laws concerning corporate and white-collar crime.
“We have arranged things so that the people who call the shots do not have to bear the full risks” –> limited liabilities.
- Corporations are not punished under the criminal law, but under the civil law in most cases, which means they are punished with fines that are often much lower than the amount of money they have made illegally.
- also, the managers not being held accountable results in them just shutting down the old business and then starting up a new one with a different name.
- In spite of harsher legislation against fraud, only 11 individuals were convicted between 2003 and 2012. Several factors can had an effect on this small number:
- large corporations hire experts to help them get around the legislation, IMETs are limited to major cases even though it would be easier to obtain convictions in less complex ones, corporations swamp prosecutors with large volumes of paperwork and other ways to delay the process.
- Often larger corporations have the ability to influence political decision making and therefore, the laws are not going to make it easier to convict large corporations of corporate or white-collar crimes.
All this means that it is fairly easy for individuals and corporations to not be held accountable for their crimes and therefore, corporate crime does not seem to be deceasing any time soon.
Wrongful convictions
People working in the justice system sometimes break the rules or exhibit incompetence which can in some cases lead to imprisonment of innocent people. Justice system personnel has “tunnel vision” - confirmation bias.
