Copyright © 2012, 2009, 2006, 2001, 1997 by Pearson Education, Inc. Upper Saddle River, New Jersey 07458 All rights reserved 0 Criminology: A Sociological

Copyright © 2012, 2009, 2006, 2001, 1997 by Pearson Education, Inc.Upper Saddle River, New Jersey 07458 • All rights reserved

1Criminology: A Sociological Understanding, 5/eSteven E. Barkan

Lesson 12 - White-Collar and Organized Crime



White-Collar and Organized Crime Lesson Overview

• White-Collar Crime– Edwin Sutherland and White-Collar Crime– Defining White-collar crime– Occupational Crime: Law-breaking for personal use– Organizational Criminality and Corporate Crime– Economic and human costs– Explaining white-collar crime– Reducing white-collar crime

• Organized Crime– History– Alien-Conspiracy Model and Myth– Controlling Organized Crime



White-Collar Crime

• Introduction– Historically, criminology focused on street crime– Industrialization created problems– Wealthy railroad tycoons engaged in crime and

questionable business practices as they acquired their fortunes



– Factories with inhumane working conditions– Sherman Antitrust Act (1890) prohibited restraint

of trade that raised consumer prices– Early 1900s, muckrakers criticized business/

political corruption, and condemned cruel treatment of workers

White-Collar Crime



• Edwin Sutherland– Sutherland coined term white-collar crime– In 1940s Studied 70 largest U.S. manufacturing,

mining, retail corporations found numerous law violations

– Questioned assumption crime is due to poverty

White-Collar Crime



White-Collar Crime

• Definition: “A crime committed by a person of respectability and high social status in the course of his occupation”– Contemporary Views

Other terms used – elite deviance, respectable crime, upper world crime



• Clinard and Quinney – two types of white collar crime– Occupational crime: Committed by individual in the

course of their occupation for personal gain

– Corporate crime: Crimes committed by corporation for financial gain

• Organizational crime: Crime can be done by and on behalf of organizations (some corp., some small businesses)

White-Collar Crime



Occupational Crime

• Lawbreaking for Personal Gain– Employee Theft: Pilferage and Embezzlement

About three-fourths of all workers are thought to steal from employers

Pilferage: Theft of merchandise, tools, etc. Common reasons: dissatisfaction with pay, working

conditions, poor treatment by supervisors Another reason may be workplace culture

Embezzlement: Theft of cash and misuse of funds Collective embezzlement in the Savings and Loan Industry



Professional Fraud

• Focus on Healthcare– Estimated annual cost $100 billion– Unnecessary surgery– Professional fraud

Unnecessary surgeryFinancial fraud



Health Care Fraud• Exaggerating charges• Billing for services not

rendered for real patient• Billing for fictitious or

dead patients• Pingponging• Providing inferior

products to patients

• Inflating charges for ambulance services

• Paying kickbacks/bribes for referrals of patients

• Falsifying medical records

• Billing for inferior products or items never provided

• Falsifying prescriptions



Organizational Criminality

• Primary intent of criminal behavior is to benefit the organization– Auto-repair fraud

Costs more than $20 billion annually Accounts for 30 to 40% of all auto repair expenses

– Illegitimate businessesPhony home improvement businesses, contests,

and charities



Corporate Financial Crime

• Fraud, cheating, bribery, and other corruption– Fraud and corruption performed primarily for the

corporation’s benefit, not for the benefit of the corporate executives engaging in these crimesPonzi scheme: New investments are used to pay the

interest on old investmentsPrice fixing: Conspiracy to set high pricesRestraint of trade: One company buys out all

others to reduce competitionFalse advertising: Making exaggerated claims



Corporate Violence

• Threats to Health and Safety– Workers and Unsafe Workplaces (i.e. exposure

to toxic substances)Estimates of Problem: not exact, but around 5,700

deaths each yearExamples of Problems

Farm workers exposed to dangerous pesticides Mining companies’ failure to observe safety code



• Consumers and Unsafe Products– The Automobile Industry

Toyota and Ford

– The Pharmaceutical IndustryKnowingly marketing dangerous drugs

– The Food IndustryDistribution of contaminated food

Corporate Crime



The Public and Environmental Pollution• Much of pollution is preventable

• Weak laws

• Lax federal monitoring

• Minimal penalties

• Consequences are illness, death, disease

• Dumping toxic waste



The Economic and Human Costs of White-Collar Crime

• Estimates for property crime/street crime at $18 billion– The total cost of white-collar crime reaches over

$564.5 billion annually

• UCR estimates that far more deaths are caused every year from white-collar crime (about 109,800 people per year) in comparison with homicide.



Explaining White-Collar Crime

• Similarities with Street Crime– Both steal and commit violence– Break the law when opportunity and motivation

present– Both use techniques of neutralization– Both are outcomes of social structure



• Differences from Street Crime– Street criminals argued to have biological and

psychological abnormalities– Cannot blame social disorganization for white-

collar crime

• Cultural and Social Bases for White-Collar Crime– Consider combination of structural and cultural

forces– Differential association – Greed




• Lenient Treatment– Weak or Absent Regulations– Difficulty Proving Corporate Crime– Weak Punishment; imprisonment has little

impact on corporate criminals– Lack of News Media Coverage




Reducing White-Collar Crime

• Regulatory agencies need larger budgets

• Media focus more attention

• More severe punishments

• Self-regulation and compliance strategies emphasizing informal sanctions (i.e. negative publicity campaigns)



Organized Crime

• History of Organized Crime– Earliest example is piracy– Piracy faded in 1720s; merchants realized

greater profits by trading with England– Began in New York City in early 1800s– Development of gangs involved in vice crimes– Immigrants turned to organized crime to make

ends meet



History of Organized Crime

– Robber barons role models for gangs and forerunners of organized crime

– Robber baron analogy indicates organized and corporate crime more similar than we think

– Organized crime’s power increased during Prohibition

– After Prohibition gambling was primary source of income for several decades



• The Alien Conspiracy Model and Myth– Is organized crime controlled by highly

organized, hierarchical group?– Aka the “Mafia mystique”– Myth because model ignores history of

organized crime before Italian immigration

Organized Crime



Controlling Organized Crime

• As long as public demand for illicit goods and services exist, organized crime will also; thus, we must reduce public demand

• Legalizing these crimes?

• Provide alternative economic opportunities for young become who become involved in it each year



RICO

• Racketeer Influenced and Corrupt Organization Act• Allows prosecutors to bring additional charges

against people engaged in 2 or more acts prohibited by 24 existing federal and 8 state laws

• Features monetary penalties that allow confiscation of all profits from criminal activities

• Intended for use against organized criminals; also used against white-collar offenders

Documents

Copyright © 2012, 2009, 2006, 2001, 1997 by Pearson Education, Inc. Upper Saddle River, New Jersey 07458 All rights reserved 0 Criminology: A Sociological