WHITE%20COLLAR%20CRIME

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WHITE COLLAR CRIME

• Lecture 1 The Discovery of White Collar Crime

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White Collar Crime Versus Conventional Crime

• White Collar Crime

• Conventional Crime

• Usually involves deceit and concealment (rather
  than direct violence).
• Typically for the purpose of financial gain.
• Occurs in a business setting.
• Less chance of being caught and punished.
• Can be characterized as involving a violation of
  trust.
• More leniency from the justice system (status
  shield protects from harsh penalties of common
  criminal offenders.
• Able to secure the best legal counsel.

• Usually involves force or violence.
• Varying reasons for the commission of offenses.
• Usually occurs in non-business settings.
• More focused justice system response.
• Some crimes can involve violations of trust, but
  most lack a relationship between the victim and
  perpetrator.
• Generally receive less leniency (victims engender
  more sympathy than those harmed by white collar
  criminal activity).
• Generally not able to secure expensive legal
  counsel.

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Identify The White Collar Criminals
Michael Jackson
Kenneth Lay
Martha Stewart
Scott Peterson
Richard Nixon
Lindsay Lohan
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Answer
Name Crime Result
Kenneth Lay Enron WCC
Martha Stewart Lying about stock sale WCC
Michael Jackson Child Molestation Not WCC
Richard Nixon Abuse of Political power WCC
Scott Peterson Murder Not WCC
Lindsay Lohan DWI Not WCC
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Defining White Collar Crime

• Early Definition
• Term first coined by criminologist Edwin
  Sutherland
• Crimes committed by a person of respectability
  and high social status in the course of his
  occupation

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Alternative Approaches To Definng White Collar
Crime

• Definition by type of offender (i.e., high
  socioeconomic status and/or position of trust)
• Definition by type of offense
• Definition in terms of organizational structure

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Reasons For Lack Of Consensus Regarding Definition

• Dispute regarding whether white collar crime
  should only refer to acts defined by criminal law
  and adjudicated in criminal proceedings.
•  
• Dispute regarding whether white collar crime
  should only refer to acts committed by
  higher-status individuals or institutions.
•  

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• Dispute regarding whether white collar crime
  should refer to acts committed in association
  with legitimate employment, regardless of
  socioeconomic status.

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Difficulties Associated With Identiy Of White
Collar Crime

• Victims of white collar crime typically do not
  know that a crime has even occurred
• WCC is less visible than the other crimes and
  witnesses often do not believe that a crime has
  occurred
• City police forces are not organized to respond
  to white collar crimes
•  

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• Victims that are aware that a white collar crime
  has been committed may not report it due to
  embarrassment/shame
• Many alleged white collar crime cases fail to
  reach the proper authorities
• Statistics obtained from the National Fraud
  Center approximate that 1 in 3 households is the
  victim of white collar crime. Of these, only 41
  report the incident. Of the number of reported
  incidents, only 21 are handled by a law
  enforcement or consumer protection agency. This
  means that less than 8 of white-collar crimes
  reach the proper authorities.

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Informers

• Typically involved in the illegal activity to
  some degree.
• Usually receive consideration in return for
  revealing knowledge about white collar criminal
  activity.
•  
•  

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Whistleblowers

• Have an inside perspective on the illegal
  activity, but not criminally implicated.
• Can be current employees, former employees,
  competitors, subcontractors, and just about
  anyone else with whom a company does business.
•  
•  

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• Rarely receive a positive response.
•  
• Laws prohibit employer retaliation, but many
  still punished by termination, suspension,
  demotion, wage garnishment, and/or mistreatment
  by other employees.
•  

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Other Sources Of Exposure

• Investigative journalists
• Public interest groups
• Congressional investigative committees
• Social scientists
• Academic scholars
• Prosecutors

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Direct Costs

• Economic
•  
• Actual loss suffered by victim

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Indirect Costs

• Higher taxes
• Increased cost of goods and services
• Higher insurance rates
• Cost of maintaining justice and regulatory
  systems to address WCC

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Physical Costs

• Death
• Illness from pollution
• Unsafe working conditions
• Unsafe Products

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Justice Served?
CONVENTIONAL CRIMINAL OFFENSES (average in months) WHITE COLLAR CRIMINAL OFFENSES (average in months)
Robbery 110.6 Fraud 18.0
Drug Trafficking 75.3 Embezzlement 9.9
Drug Possession 18.5 Bribery 16.2
Manslaughter 26.1 Tax Offenses 16.6
Larceny 15.6 Money Laundering 46.3
Environmental 14.5
Antitrust 12.7
Food Drug 23.1
Obtained from Paul Rosenzweigs March 26, 2003
testimony before the Commission on Sentencing of
Corporate Fraud and White Collar Crime