White Collar Crime

White-Collar Crime
– Crimes of the marketplace

– White-collar crime: Illegal activities of people
and institutions which profit through
legitimate business transactions
– Cyber crime: Involves people using
instruments of modern technology for criminal
purposes
– Organized crime: Illegal activities of people
and organizations, which profit through
illegitimate business enterprise
Introduction
People who wear white collars to work steal
and kill, but they use guilt and deceit.
More money is stolen and more people die
every year as the result of scam and willful
illegal corporate activity than as a result of
the activities of street criminals.
White Collar Crime
• Edwin Sutherland coined the phrase “white
collar crime” to describe criminal activities of the
rich and powerful
– Contemporary definitions of white collar crime include
both middle-income persons and corporate titans
– Costs of white-collar crime are in the hundreds of
billions of dollars and exceed any other type of crime
– White-collar crimes both kill people and damage
property
The Concept of White-Collar
Crime
The U.S. Congress

defined white-collar
crime as an illegal act or
series of illegal acts
committed by non-
physical means and by
concealment or guile, to
obtain money or property,
or to obtain business or
personal advantage.
The Concept of White-Collar
Crime
The term white-collar

crime was coined in
the 1930’s by Edwin
Sutherland who
defined it as crime
committed by a
person of
respectability and high
social status in the
course of his
occupation.
Components of White-Collar Crime
• sting and swindle

– A white collar crime in which people use their
institutional or business position to bilk people
out of their money
– Swindlers often target elderly and religious
organizations
• Religious swindles
– Use of religion and creation of fake religious
organizations to bilk those out of money
• Chiseling
– Involves cheating an organization, its
consumers, or both on a regular basis
– Professional chiseling: Use their position to
chisel clients (doctors and pharmacists)
– Securities fraud: Commodity and stock
markets deceptions
• Churning (repeated unnecessary buying/selling)
• front running (placing personal orders ahead of
clients)
• bucketing (skimming profits)
• insider trading ( information giving the trader
unfair advantage)
causes
• Greedy or Needy
– Motivations include a need to keep or improve a job,
satisfy egos, or keep up with inflation to support a
family
• Corporate Culture Theory
– Involves placing excessive demands on employees
• Self-Control View
– Quick benefits with minimal effort
White-Collar Law Enforcement
Systems
• Controlling White-Collar Crime
– Compliance strategies: Involve cooperation and self-
policing among businesses (SEC and FDA)
– Sarbanes-Oxley legislation (SOX) limits nonaudit
services that auditing firms can perform publicly
– Compliance strategies create marketplace incentives
to obey the law and avoid the stigmatization of their
crimes
– Deterrence strategies: Involve detection and
punishing the offenders
Types of White Collar Crime
• Individual offences
– Against employer
• Theft, fraud
– Against customer
• Overcharging, fraud, identity theft, various “e-crimes”
– Against employee
• Theft, embezzlement
– Against other companies
• Insurance fraud
– Against the State
• Tax evasion, benefit fraud
Occupational Crime
Occupational crime: Crime committed by
individuals in the course of their employment.
Professional occupational crime: Crimes
committed by professionals such as physicians
and lawyers in the course of their practices.
It seems that every occupational category
generates a considerable number of criminals
and the higher the prestige of the occupation,
the more their criminal activities cost the
general public.
Corporate Crime
Corporate crime:
Criminal activity on
behalf of a business
organization.
Crimes of fraud,
concealment, and
misrepresentation
continue to victimize all
sorts of groups and
individuals in society.
Corporate Crime
• Illegal actions, or omissions, resulting

from deliberate decision making, or
culpable negligence on the part of a
company
• Organizational Goals central to
understanding corporate crime
• Indifference to outcome of action often
contributes
Variety of corporate crime
• Against consumers
– Mis-selling: providing goods and services
– counterfeiting, dangerous goods
• Health and safety offences
– Employee, consumer and environment
• Financial Fraud
Other Harms
• Health Care
– negligence, injuries and deaths, drug reactions and
interactions
• Chemical Warfare
– pollution, toxic wastes, smoking, food additives,
pesticides
• Consumer Safety
– Defective Products
Organized crime
• Activities of Organized Crime

– Narcotics distribution
– Gambling
– Prostitution
– Loan-sharking
– Theft-rings

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White-Collar Crime

– Crimes of the marketplace

The U.S. Congress

The term white-collar

• sting and swindle

• Illegal actions, or omissions, resulting

• Activities of Organized Crime

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