WCC midterm 1

Question 1

Sutherland’s defintiion

Answer 1

a crime committed by a person of A) respectability and B) high social class in the course of his occupation

Question 2

Sutherland’s critique

Answer 2

activities are not always related to occupation; there are other responsibilities at times with other groups and organizations; not always limited to high social class

Question 3

Sutherland’s revised definition

Answer 3

a violation of a law (criminal, administrative, civil) committed by a person, group, or organization in the course of an otherwise respected and legitimate occupation or financial activity

Question 4

what are the three types of WCC by kind of offender and give and example for each

Answer 4

high status (tax evasion) , occupational (academic dishonesty), and organizational (price fixing)

Question 5

what are the types of WCC by kind of offenses

Answer 5

fraud and deception; ripping off company; bribery and corruption; manipulation of marketplace; violent WCC

Question 6

name 3 lessons from hank shea

Answer 6

no one is above the law; when faced with an ethical dilemma, seek advice and counsel; no matter your position in the workplace, lead by example

Question 7

3 kinds of “small” WCC

Answer 7

larceny (employee theft); embezzlement (appropriating someone else’s assets for their own personal use; violating intellectual property (pirating songs, movies, textbooks) or producing fake logos

Question 8

Initiation vs. Institutionalization

Answer 8

Initiation is not always deviant while institutionalization is a matter of course practices

Question 9

four types of crimes against consumers

Answer 9

false advertising; bait and switch; price fixing; bid rigging

Question 10

what is bid rigging

Answer 10

when companies conspire to manipulate the outcome of a bidding process in their favor; raising prices or lowering the quality of goods/services for purchasers

Question 11

what is price fixing

Answer 11

agreement between participants on the same side in a market to buy or sell a good/service only at a fixed price (controls the supply and demand)

Question 12

what law criminalized price fixing

Answer 12

Sherman Antitrust Act of 1890

Question 13

Heavy Electric Case

Answer 13

Westinghouse created an all-out price war; slashed prices on electrical products to below cost (also participated in bid rigging)

Question 14

explanations of heavy electric case

Answer 14

“it was part of my duty” “illegal but not criminal” “performing a positive service to the economy by stabilizing prices”

Question 15

types of fraud and deception

Answer 15

false advertising and consumer fraud

Question 16

who is barry minkow and what did he do?

Answer 16

he started a business as a teen and ignored day-to-day cost controls resulting in him being heavily in debt at 17. he turned to insurance fraud and counterfeiting. he also resorted to credit card fraud by adding zeroes to customers’ bills; he created a pyramid scheme to build his business, but at the height of his career an LA times article collapsed his empire.

Question 17

what are organizational actors (historically and now)

Answer 17

historically: corporate organizations tied to natural persons
now: corporations separate from individuals

Question 18

what is an LLC

Answer 18

limited liability company that is a specific legal form of organization of persons and material resources, chartered by the state, for the purpose of conducting business

Question 19

4 advantages of an LLC

Answer 19

1) limited liability 2) transferability of shares 3) judicial personality 4) indefinite duration

Question 20

disadvantages of LLC’s

Answer 20

monopolies are created (ex: standard oil)

Question 21

benefits of natural actors

Answer 21

freed from fixed estates and multidimensional

Question 22

costs of natural actors

Answer 22

asymmetric society (much larger and many more alternative transaction partners; persons may be replaced more easily by other people or machines)

Question 23

what are Sutherland’s theses

Answer 23

1) pathologies are not an adequate explanation of crime 2) upper-class crime is prevalent and the consequences are disastrous

Question 24

what data did Sutherland focus on

Answer 24

out of the 70 largest corporations that were studied; he studied how many offenses, who they were decided by, and the timing

Question 25

what data did Clinard and Yeagar find

Answer 25

repeat industries: oil, pharmaceutical, and auto industries
repeat offenses: environmental, labor, manufactoring

Question 26

what are the 2 causes of WCC

Answer 26

1) motivation and 2) opportunities (by industries, by organizations, by occupations)

Question 27

neutralization techniques

Answer 27

“just borrowing” “no one harmed” “law unjust, unreasonable” “necessary for survival” “everybody does it”

Question 28

ENRON: Who

Answer 28

Ken Lay and Jeff Skilling

Question 29

ENRON: What

Answer 29

gas and energy corporation; largest case of bankruptcy

Question 30

ENRON: Crimes

Answer 30

• created loopholes to make abnormal profits (ex: exported power back and forth from CA)
• inflated company’s revenues and hid debt (ex: bonuses calculated by imaginary profits)
• wire fraud; money laundering; securities fraud; mail fraud; conspiracy

Question 31

ENRON: How

Answer 31

• deregulated electricity in CA
• used traders to initiate rolling blackouts to generate revenue
• used mark-to-market accounting to book future profits the day a deal was made

Question 32

ENRON: victims

Answer 32

• Californians
• economy
• workers who lost their jobs at Enron
• shareholders

Question 33

problem of overly large corporations

Answer 33

consumers don’t know the cost of their purchases has increased due to illegal, anticompetitive practices

Question 34

regulatory agencies examples

Answer 34

FTC, FDA, EPA