||It has been suggested that organi-cultural deviance be merged into this article. (Discuss) Proposed since October 2012.|
White-collar crime is financially motivated nonviolent crime committed for illegal monetary gain. Within criminology, it was first defined by sociologist Edwin Sutherland in 1939 as "a crime committed by a person of respectability and high social status in the course of his occupation". Sutherland was a proponent of symbolic interactionism and believed that criminal behavior was learned from interpersonal interactions. White-collar crime is similar to corporate crime as white-collar employees are more likely to commit fraud, bribery, Ponzi schemes, insider trading, embezzlement, cybercrime, copyright infringement, money laundering, identity theft, and forgery.
His theory was the result of his attempt to study two fields, crime and high society, which had previously lacked empirical correlation. His goal was to demonstrate a correlation between money and social status and the likelihood of going to jail for a white-collar crime. Although the percentage has risen, numbers[which?] still show a large majority of those in jail are poor, blue-collar criminals.
Many attribute the social climate following the Great Depression as the factor that led to Sutherland's theory. He noted that in his time, "less than two percent of the persons committed to prisons in a year belong to the upper class". The United States passed antitrust laws in the 1920s and social welfare laws in the 1930s; after the Great Depression, people went to great lengths to rebuild their financial security, and it is theorized this led workers—who worked hard and long and felt underpaid—to take advantage of their positions.
Much of Sutherland's work was to separate and define the differences in blue-collar street crimes, such as arson, burglary, theft, assault, rape, and vandalism, which are often blamed on psychological, associational, and structural factors. Instead, white-collar criminals are opportunists, who learn to take advantage of their circumstances to accumulate financial gain. They are educated, intelligent, affluent, confident individuals whose jobs involve unmonitored access to large sums of money. Precisely because these criminals were held to such high esteem, Sutherland claimed that society turned a blind eye to the crimes they committed.
- 1 Definitional issues
- 2 Relationship to other types of crime
- 3 Punishment
- 4 Common misconceptions of white-collar crime
- 5 See also
- 6 Further reading and references
- 7 References
Modern criminology generally rejects a limitation of the term by reference, rather classifies the type of crime and the topic:
- By the type of offense, e.g., property crime, economic crime, and other corporate crimes like environmental and health and safety law violations. Some crime is only possible because of the identity of the offender, e.g., transnational money laundering requires the participation of senior officers employed in banks. But the FBI has adopted the narrow approach, defining white-collar crime as "those illegal acts which are characterized by deceit, concealment, or violation of trust and which are not dependent upon the application or threat of physical force or violence" (1989, 3). This approach is relatively pervasive in the United States, the record-keeping does not adequately collect data on the socioeconomic status of offenders which, in turn, makes research and policy evaluation problematic. While the true extent and cost of white-collar crime are unknown, the FBI and the Association of Certified Fraud Examiners estimate the annual cost to the United States to fall between $300 and $660 billion.
- By the type of offender, e.g., by social class or high socioeconomic status, the occupation of positions of trust or profession, or academic qualification, researching the motivations for criminal behavior, e.g., greed or fear of loss of face if economic difficulties become obvious. Shover and Wright (2000) point to the essential neutrality of a crime as enacted in a statute. It almost inevitably describes conduct in the abstract, not by reference to the character of the persons performing it. Thus, the only way that one crime differs from another is in the backgrounds and characteristics of its perpetrators. Most if not all white-collar offenders are distinguished by lives of privilege, much of it with origins in class inequality.
- By organizational culture rather than the offender or offense which overlaps with organized crime. Appelbaum and Chambliss offer a twofold definition:
- Occupational crime which occurs when crimes are committed to promote personal interests, say, by altering records and overcharging, or by the cheating of clients by professionals.
- Organizational or corporate crime which occurs when corporate executives commit criminal acts to benefit their company by overcharging or price fixing, false advertising, etc.
Relationship to other types of crime
The types of crime committed are a function of what is available to the potential offender. Thus, those employed in relatively unskilled environments and living in inner-city areas have fewer "situations" to exploit than those who work in "situations" where large financial transactions occur and live in areas where there is relative prosperity. Blue-collar crime tends to be more obvious and thus attracts more active police attention such as vandalism or shoplifting. In contrast, white-collar employees can incorporate legitimate and criminal behavior, thus making themselves less obvious when committing the crime. Therefore, blue-collar crime will more often use physical force, whereas in the corporate world, the identification of a victim is less obvious and the issue of reporting is complicated by a culture of commercial confidentiality to protect shareholder value. It is estimated that a great deal of white-collar crime is undetected or, if detected, it is not reported.
Corporate crime deals with the company as a whole. The crime benefits the investors or the individuals who are in high positions in the company or corporation. The relationship white-collar crime has with corporate crime is that they are similar because they both are involved within the business world. Their difference is that white-collar crime benefits the individual involved, and corporate crime benefits the company or the corporation.
One well-known insider trading case in the United States is the ImClone stock trading case. In December 2001, top-level executives sold their shares in ImClone Systems, a pharmaceutical company that manufactured an anti-cancer drug. The U.S. Securities and Exchange Commission investigated numerous top-level executives, as well as Martha Stewart, a friend of ImClone's former chief executive who had also sold her shares at the same time. The SEC reached a settlement in 2005.
The negotiation of agreements between a state and a corporation will be at a relatively senior level on both sides, this is almost exclusively a white-collar "situation" which offers the opportunity for crime. Although law enforcement claims to have prioritized white-collar crime, evidence shows that it continues to be a low priority.
When senior levels of a corporation engage in criminal activity using the company this is sometimes called control fraud.
Organized Transnational Crime
Organized Transnational Crime is organized criminal activity that takes place across national jurisdictions, and with advances in transportation and information technology, law enforcement officials and policymakers have needed to respond to this form of crime on a global scale. Some examples include human trafficking, money laundering, drug smuggling, illegal arms dealing, terrorism, and cybercrime. Although it is impossible to precisely gauge transnational crime, the Millennium Project, an international think tank, assembled statistics on several aspects of transnational crime in 2009:
- World illicit trade of almost $780 billion
- Counterfeiting and piracy of $300 billion to $1 trillion
- Global drug trade of $321 billion
Individuals may commit crime during employment or unemployment. The two most common forms are theft and fraud. Theft can be of varying degrees, from a pencil to furnishings to a car. Most employees do steal and the expense is high. Insider trading, the trading of stock by someone with access to publicly unavailable information, is a type of fraud.
A death that occurs while a person is at work or performing work is considered occupational death. An example of occupational death is the death of three workers at the Langley Mushroom farm. The three workers died after inhaling fatal doses of toxic fumes in September 2008. Two other workers were left with brain damage. Three operators were fined $350,000 after pleading guilty to charges linked to the death of the three workers.
In the United States, sentences for white-collar crimes may include a combination of imprisonment, fines, restitution, community service, disgorgement, probation, or other alternative punishment. These punishments grew harsher after the Jeffrey Skilling and Enron Scandal, when the Sarbanes–Oxley Act of 2002 was passed by the United States Congress and signed into law by President George W. Bush, defining new crimes and increasing the penalties for crimes such as mail and wire fraud. In other countries, such as China, white-collar criminals can be given the death penalty. Certain counties like Canada consider the relationship between the parties to be a significant feature on sentence when there is a breach of trust component involved. Questions about sentencing disparity in white-collar crime continue to be debated.
Common misconceptions of white-collar crime
One common misconception about corporate crime is that its effects are mainly financial. For example, pharmaceutical companies may make false claims regarding their drugs and factories may illegally dump toxic waste. Indeed, the Hooker Chemical Company (later acquired by Occidental Petroleum Corporation) dumped toxic waste into the abandoned Love Canal in Niagara Falls and sold the land without disclosing the dumping. It was sold in the 1950s to a private housing developer, whose residents began experiencing major health problems such as miscarriages and birth defects in the 1970s.
Additionally, employees of a company can become victims of white-collar crime. Regardless of whether they know about their company's criminal activities or not, employees risk losing their jobs if their employer is charged with a white-collar crime such as fraud or embezzlement, incurs losses, and declares bankruptcy. Employees can also be victimized when employers are aware of physical harm to them but take no action. For example, miners in Newfoundland had been exposed to radon gas, and although the company (and the Canadian government) were aware of the health risks, they took no action.
- Accounting scandals
- Penny stock scam
- Con man
- Corporate crime
- Franchise fraud
- Industrial espionage
- IRS Criminal Investigation Division (IRS-CID)
- Money laundering
- Mortgage fraud
- Office of Criminal Investigations (OCI)
- Organi-cultural Deviance
- Organized crime
- Sarbanes–Oxley Act
- Securities and Exchange Commission (SEC)
- Securities fraud
- Terrorist financing
- United States Postal Inspection Service
- United States Secret Service
Further reading and references
- Appelbaum, Richard P. & Chambliss, William J. (1997). Sociology: A Brief Introduction. New York: Longman. ISBN 0-673-98279-3
- Barnett, Cynthia. (Undated). The Measurement of White-Collar Crime Using Uniform Crime Reporting (UCR) Data.
- Clarke, Ronald V. (1997). Situational Crime Prevention: Successful Case Studies (2nd edition). New York: Criminal Justice Press. ISBN 0-911577-38-6
- Dillon, Eamon Dilloninvestigates.com, The Fraudsters – How Con Artists Steal Your Money Chapter 5, Pillars of Society, published September 2008 by Merlin Publishing, Ireland ISBN 978-1-903582-82-4
- Friedrichs, David O. (2003) Trusted Criminals: White Collar Crime in Contemporary Society, Wadsworth. ISBN 0-495-00604-1
- Geis, G., Meier, R. & Salinger, L. (eds.) (1995). White-collar Crime: Classic & Contemporary Views. NY: Free Press.
- Green, Stuart P. (2006). Lying, Cheating, and Stealing: A Moral Theory of White Collar Crime. Oxford: Oxford University Press.
- Koller, Cynthia A. (2012). "White Collar Crime in Housing: Mortgage Fraud in the United States." El Paso, TX: LFB Scholarly. ISBN 1593325347. ISBN 978-1593325343
- Lea, John. (2001). Crime as Governance: Reorienting Criminology.
- Leap, Terry L. (2007) Dishonest Dollars: The Dynamics of White-Collar Crime. Ithaca: Cornell University Press. ISBN 978-0-8014-4520-0
- Newman, Graeme R. & Clarke, Ronald V. (2003). Superhighway Robbery: Preventing E-commerce Crime. Portland, Or: Willan Publishing. ISBN 1-84392-018-2
- Reiman, J. (1998). The Rich get Richer and the Poor get Prison. Boston: Allyn & Bacon.
- Pontell, H. & Tillman, R. (1998). Profit Without Honor: White-collar Crime and the Looting of America. Upper Saddle River, NJ: Prentice Hall.
- Shapiro, Susan P. (1990). "Collaring the Crime, not the Criminal: Reconsidering the Concept of White-collar Crime", American Sociological Review 55: 346–65.
- Simon, D. & Eitzen, D. (1993). Elite Deviance. Boston: Allyn & Bacon.
- Simon, D. & Hagan, F. (1999). White-collar Deviance. Boston: Allyn & Bacon
- Shover, Neal & Wright, John Paul (eds.) (2000). Crimes of Privilege: Readings in White-Collar Crime. Oxford: Oxford University Press. ISBN 0-19-513621-7
- Sutherland, Edwin Hardin (1949). White Collar Crime. New York: Dryden Press.
- Thiollet, J.P. (2002). Beau linge et argent sale — Fraude fiscale internationale et blanchiment des capitaux, Paris, Anagramme ed. ISBN 2-914571-17-8
- U.S. Department of Justice, Federal Bureau of Investigation (1989). White Collar Crime: A Report to the Public. Washington, D.C.: Government Printing Office.
- Friedrichs, David O. (2009). Trusted Criminals: White Collar Crime In Contemporary Society (4 ed.). Wadsworth Publishing. p. 50. ISBN 978-0495600824. citing Kane and Wall, 2006, p. 5
- Appelbaum, Richard & Chambliss, William J. (1997). Sociology: A Brief Introduction. New York: Longman Pub Group. p. 117. ISBN 9780673982797.
- Clarke, R. V. G. (1997). Situational Crime Prevention: Successful Case Studies (2 ed.). Harrow and Heston. ISBN 9780911577389.
- O'Grady, William (2011). Crime in Canadian Context: Debates and Controversies (2 ed.). Oxford University Press. ISBN 9780195433784. Retrieved 1 June 2012.
- Anderson, Jenny (20 January 2005). "S.E.C. Settles ImClone Insider Trading Case". New York Times. Retrieved 1 June 2012.
- Anzalone, Charles (28 April 1991). "White-Collar Crime Has Become Priority of Law Enforcement". Buffalo News.
- Ryan Gabrielson, "State's white collar convicts get lighter sentences"
- Rubino, Esq. PA, Frank. "White Collar Crime - An Overview". Retrieved 30 January 2012.
- "Penalties for White Collar Crime". Blumberg & Associates.
- "Is China's White-Collar Death Penalty Fair?". The American Lawyer. Retrieved 30 January 2012.
- "What is Breach of Trust in Canada?". Alexander Ejsmont. Retrieved 30 November 2013.
- Podger, Prof. Ellen S. (21 February 2007). "Throwing Away the Key". Yale Law Journal. Retrieved 30 January 2012.