Chapter 12 - White-Collar Crime and Organized Crime Flashcards
Overview
White-Collar Crime
Edwin Sutherland
A crime committed by a person of respectability and high social status in the course of his or her occupation
- Ruthless Competitiveness (Sports)
- Arrogance
- Sense of Entitlement
Organizational / Corporate Crime
- Organizational crime refers to white-collar crime committed with the support and encouragement of a formal organization and intended to advance the goals of that organization
Example: A car company using cheap brakes on cars
Occupational Crime
- Occupational crime refers to violations of the law in the course of practicing a legitimate occupation for personal gain
Example: Robert R. Courtney was a pharmacist who sold watered down drugs for cancer patients and listing it as the dose it was supposed to be and selling it on the street
Organizational Crime
Organizational Crime
- Social Organization of Corporations
- Corporation as a Juristic Person - The legal concept that corporations are liable to the same laws as natural persons - Lack of Restraint, Corporate Conscience
- Executive Disengagement - Pyramid Structure of Corporations - The custom by which lower-level employees assume that executives are best left uniformed of certain decisions and actions of employees
Organizational Crime
Executive Disengagement
- Barings Bank
- Approx. $1 Billion loss on Tokyo Stock Market
Organizational Crime
Criminogenic Market Structure
An economic market structure that is structured in such a way that it tends to produce criminal behaviour
Organizational Crime
The Enron Scandal
Accounting Scandals
- Natural gas pipeline company
- CEO Kenneth Lay
- Risky and illegal Financial Transactions
- High Executive Bonuses
Organizational Crime
2008 Financial Collapse
- Risky Lending Practices (ex. Ninja Mortgages)
- Goldman Sachs
- Mortage-bundling - Collateralized Debt Obligations
Organizational Crime
Corporate Actors and Limited Civil Liability
- Separation of Shareholder and Management interests
- Civil remedies largely ineffective
Organizational Crime
Monopolistic Enterprise
Any corporation that controls all, or the majority, of the market for a particular product or service
Organizational Crime
Anticombines Legislation
Law designed to prevent and punish corporations that work together to reduce competition
Organizational Crime
Sentencing White-Collar Offenders
- Judicial Attitudes
Belief that white-collar offenders experiences punishment differently
Compromise with combinations of short prison sentences and fines - Tougher penalties evident in USA
- No apparent increase in punitiveness in Canada
Organizational Crime
Corporate Crime and Legal Sanctions
- Higher public concern with violent and street crime
- Investigations are lengthy and expensive
- Complexity of information
Occupational Crime
Profesional Misconduct and Malpractice
- Misconduct and failure of organizations to deal with misconduct
- Often hidden because dealt with by professional associations
Occupational Crime
Unprofessional Conduct and Malpractice
Example: Charles Smith was a doctor and head of forensic pathologist, during his time he conducted approximately 1,000 autopsies’, he was removed as the head because he was involved in 3 suspicious deaths. It was determined that he made a number of errors.
Occupational Crime
Investment and Securities Fraud
(Type)
- A variety of illicit activities and strategies designed to deceive potential investors or misrepresent capital market participants
Example: PONZI Scheme (a form of investment fraud)
Occupational Crime
Insider Trading
- When an employee or owner of a company uses information about the company that is unavailable to the public to buy or sell stocks
Example: Martha Steward (uses information that’s not accessible)
Occupational Crime
Pump and Dump
- Stock promoters take a worthless company, invent false stores about the company’s value, and solicit potential investors
Example: Bre-X
Organized Crime
Criminal Code of Canada
A criminal organization is a group that:
- Compromised of 3 or more persons in or outside canada
- One of it’s main purposes or activities is the facilitation or commission of one or more serious offenses
A criminal organization DOES NOT include:
* A group that forms randomly for immediate commission of a single offense
Charcateristics of Organized Crime
Structural
- Systemic pattern of Relationships
- Insulation
- Transnational
Charcateristics of Organized Crime
Institutional
- Continuity
- Exclusive membership
- Transnational
Charcateristics of Organized Crime
Commercial
- Legal Commercial Activities
- Consensual and Predatory Crimes
Charcateristics of Organized Crime
Behavioural
- Rationality
- Rules, Codes
Organized Crime
Predatory Crimes
- A type of crime in which a victim suffers a direct physical, emotional, or financial loss
Example: Extortion
Organized Crime
Consensual Crimes
- A type of crime where no traditional “victim” exists
- Two or more individuals voluntarily engage in an illicit activity
Example: Money Laundering, Loansharking
Organized Crime: Etiological Theories
Alien Conspiracy Theory
A political idea
- This theory argues that organized crime in America is the result of the importation of secret criminal societies that are rooted in foreign culture
- Not a scholarly theory
- 1950s U.S Senate Committee
- No nation-wide criminal conspiracy with centralized control
Organized Crime is a North America Creation
Example: La Cosa Nostra, Donald Trump Wall
Theories of Organized Crime
Economic Theory of Organized Crime
* The underground economy is an extension of the legitimate economy wherein criminal organizations come into existence to supply good and services that are demanded by the public but declared illegal by the state
* Parallels between the legal and illegal commerce
*Demand for prohibited goods drvies illegal supply
* A relationship between a buyer and a seller
* Criminal entrepreneurs seek the max. profit
* Laws of supply and demand dictate price
Organized Crime: Theories of Structure
Bureaucratic - Hierarchical Model
- Criminal groups as highly structured, tightly organized
- Deliberate & rational arrangement of position
Organized Crime: Theories of Structure
Kinship Model
- A social grouping shaped by culture, tradition, and structured around kinship relationships
Example: Oldest person in a family sitting at the head of the dinner table
Organized Crime: Theories of Structure
Patron-Client Model
- A loose, fluid system of power and “business” relationships that stem from a centralized leadership to provide services
Example: trafficking drugs across the boarder
