White Collar Crime


In this paper the exciting criminal phenomenon known as white-collar crime will be discussed. Corporate Crime and Computer Crime will be discussed in detail. Crime preventative agencies such as the NCPC (National Crime Prevention Council) will also be researched. White Collar Crime The late Professor Edwin Sutherland coined the term white-collar crime about 1941. Sutherland defined white-collar crime as “a crime committed by a person of respectability and high social status in the course of his occupation” (Siegel 337) White-collar crime includes, by way of example, such acts as promulgating false or misleading advertising, illegal exploitation of employees, mislabeling of goods, violation of weights and measures statutes, conspiring to fix prices, evading corporate taxes, computer crimes, and so on. White-collar crime is most distinctively defined in terms of attitudes toward those who commit it. These crimes are punishable by law; however it is generally regarded by the courts and by sections of the general public as much less reprehensible than crimes usually punished by the courts. The other types of crime are blue-collar offenses, which are predominately crimes of the under-privileged. White-collar crimes are punished far less harshly than blue-collar crimes, which shows societies attitudes towards the two sections of society. White-collar crime is attractive to criminals because it brings material rewards with little or no loss of status. (Taft & England 201) For some, white-collar crime is not viewed as a “crime” at all, because of its non-violent nature. Violent crime has an immediate and observable impact on its victim which raises the ire of the public, whereas white-collar crime frequently goes undetected or is viewed as a bending of the rules. Yet white-collar crime can create the greater havoc. The victim of an assault will recover; however, the impact of a fraud can last a lifetime. This is especially true when the elderly are victimized, as they have little or no hope of re-establishing themselves in financial terms. Contrary to the popular belief, white-collar criminals are thieves and the methods used to conceal their offenses are both artful and ingenious. Concealment of the crime is always an objective of the offender, and it becomes an element of the crime itself. Because it is an artful form of deceit, which is skillfully disguised, the investigation itself is often long and laborious as far as proving criminal intent is concerned. The offence itself may be disguised in a maze of legitimate transactions, which are quite proper if viewed in isolation; however, the cumulative effect is the commission of a criminal offence. From the standpoint of the criminal, the ideal white- collar crime is one that will never be recognized or detected as a criminal act. (Radzinowicz 325-335) Corporate Crime Corporate crime is the type of crime that is engaged in by individuals and groups of individuals who become involved in criminal conspiracies designed to improve the market share or profitability of their corporations. ( Siegel 338) Corporations are legal entities, which can be and are subjected to criminal processes. There is today little restriction on the range of crimes for which corporations may be held responsible, though a corporation cannot be imprisoned. The most controversial issue in regard to the study of corporate crime revolves around the question of whether corporate crime is “really crime.” Corporate officials, politicians, and many criminologists object to the criminological study of corporate criminality on the strictest sense of the word. The conventional and strictly legal definition of crime is that it is an act, which violates the criminal law and is thereby punishable by a criminal court. From this perspective a criminal is one who has been convicted in a criminal court. Given these widely accepted notions of crime and criminals, it is argued that what is called corporate crime is not really crime and should not be considered as such by either the public or criminologists. (Hochstedler 22) It does appear that now in recent times society has had a growing concern about white-collar and corporate crime. Studies have indicated that the public now judges white-collar criminality to be more serious than it had been in the past, people now have lost confidence in the people running major companies, and most American corporate executives are believed to be dishonest. The public’s concern with corporate crime has grown recently, but has been evident for several years. Corporate crime has also been linked to political leaders in this country. Corporate crime is a crime of power and profit for the offenders. Large and powerful corporations who have the support of prominent political leaders can be difficult to prosecute in corporate crime cases. At the Progress ; Freedom Foundation conference held at the Mayflower Hotel in Washington, D.C., Speaker of the House Newt Gingrich (R-Georgia) was asked why he spent so much time addressing the issue of street crime and violence, while ignoring the issue of corporate crime and violence. Gingrich answered, “If I went around the country and said, ‘Vote for us and there will be no more white-collar fraud,’ the average voter will say, ‘I don’t think he gets it.'” But corporate crime is more than just white-collar fraud. And one reason that Gingrich doesn’t address the issue of corporate crime might be because one of the corporations that has brought him to power is Southwire Co. of Carrollton, Georgia. Southwire has close ties to Gingrich, it dominates the political economy of Carroll County, where Gingrich’s political career was launched, and it is a corporation with a criminal record. Individuals affiliated with Southwire Co., including its chief executive officer, Roy Richards, and its president, James Richards, have donated more than $18,000 to Gingrich’s campaigns for Congress during the past ten years. According to the Los Angeles Times, James Richards has also donated 80,200 to GOPAC, the political action committee spearhearded by Gingrich. Computer Crime Computer technology has introduced new factors concerning the types of perpetrators, the forms of assets threatened, and embezzlement methods. ( Radzinowicz 357) Computer crimes generally fall into five categories: 1) theft of services 2) use of computer data for personal gain 3) unauthorized use of computers employed for various types of financial processing 4) property theft by computer 5) placing viruses to destroy data. (Siegel 353) The terms “computer misuse” and “computer abuse” are also used frequently, but they have significantly different implications. Criminal law recognizes the concepts of unlawful or fraudulent intent and of claim of right; thus, any criminal laws that relate to computer crime would need to distinguish between accidental misuse of a computer system, negligent misuse of a computer system and intended, unauthorized access to or misuse of a computer system, amounting to computer abuse. Annoying behavior must be distinguished from criminal behavior in law. History has shown that a broad range of persons commits computer crime: students, amateurs, terrorists and members of organized crime groups. What distinguishes them is the nature of the crime committed. The individual who accesses a computer system without further criminal intent is much different from the employee of a financial institution who skims funds from customer accounts. The typical skill level of the computer criminal is a topic of controversy. Some claim that skill level is not an indicator of a computer criminal, while others claim that potential computer criminals are bright, eager, highly motivated subjects willing to accept a technological challenge, characteristics that are also highly desirable in an employee in the data-processing field. According to a number of studies, however, employees represent the largest threat, and indeed computer crime has often been referred to as an insider crime. One study estimated that 90 per cent of economic computer crimes were committed by employees of the victimized companies. A recent survey in North America and Europe indicated that 73 per cent of the risk to computer security was attributable to internal sources and only 23 per cent to external criminal activity. The American Bar Association conducted a survey in 1987: of 300 corporations and government agencies, 72 claimed to have been the victim of computer-related crime in the 12-month period prior to the survey, sustaining losses estimated to range from $ 145 million to $ 730 million. In 1991, a survey of security incidents involving computer-related crime was conducted at 3,000 Virtual Address Extension (VAX) sites in Canada, Europe and the United States of America. Seventy-two per cent of the respondents said that a security incident had occurred within the previous 12-month period; 43 per cent indicated that the security incident they had sustained had been a criminal offence. A further 8 per cent were uncertain whether they had sustained a security incident. Similar surveys conducted around the world report significant and widespread abuse and loss. Computer criminals have gained notoriety in the media and appear to have gained more social acceptability than traditional criminals. The suggestion that the computer criminal is a less harmful individual, however, ignores the obvious. The current threat is real. The future threat will be directly determined by the advances made in computer technology. Although it is difficult to quantify the scope of the computer crime problem, public reports have estimated that computer crime costs us between five hundred million and ten billion dollars per year. The Computer Security Institute has surveyed 428 information security specialists in Fortune 500 companies; 42% of the respondents indicated that there was an unauthorized use of their computer systems in the last year. Only a small portion of computer crimes come to the attention of the law enforcement authorities. While it is possible to give an accurate description of the various types of computer offences committed, it has proved difficult to give an accurate, reliable overview of the extent of losses and the actual number of criminal offences. At its Colloquium on Computer Crimes and Other Crimes against Information Technology, held at Wrzburg, Germany, from 5 to 8 October 1992, AIDP released a report on computer crime based on reports of its member countries that estimated that only 5 per cent of computer crime was reported to law enforcement authorities. Law enforcement officials indicate from their experience that recorded computer crime statistics do not represent the actual number of offences; the term “dark figure”, used by criminologists to refer to unreported crime, has been applied to undiscovered computer crimes. The invisibility of computer crimes is based on several factors. First, sophisticated technology, that is, the immense, compact storage capacity of the computer and the speed with which computers function, ensures that computer crime is very difficult to detect. In contrast to most traditional areas of crime, unknowing victims are often informed after the fact by law enforcement officials that they have sustained a computer crime. Secondly, investigating officials often do not have sufficient training to deal with problems in the complex environment of data processing. Thirdly, many victims do not have a contingency plan for responding to incidents of computer crime, and they may even fail to acknowledge that a security problem exists. The dynamic nature of computer technology, compounded by specific considerations and complications in applying traditional laws to this new technology, dictate that the law enforcement, legal and judicial communities must develop new skills to be able to respond adequately to the challenge presented by computer crime. The growing sophistication of telecommunications systems and the high level of expertise of many system operators complicate significantly the task of regulatory and legal intervention by law enforcement agencies. If the law enforcement community is expected to deal with the problem of computer crime, adequate training sessions must be implemented. To address computer crime, most police departments are allocating a greater proportion of resources to their economic or fraud investigation divisions, since many types of computer crime occur in the course of business transactions or affect financial assets. Accordingly, it is important for investigators to know about business transactions and about the use of computer in business. The ideal situation is to have investigators with not only solid criminal investigation backgrounds but also supplementary technical knowledge. This is similar to the traditional approach, where many police forces ensure that their fraud investigators, although not necessarily accountants, possess a thorough understanding of financial and business record keeping. Preventative Agencies In the late 1970s, the prevailing public attitude was “you can’t do anything about crime.” A varied group of individuals – government policy makers, law enforcement, business, labor leaders – disagreed. This group founded the National Citizens’ Crime Prevention Campaign featuring McGruff the Crime Dog, our nation’s symbol for crime prevention. In 1977, FBI Director Clarence Kelley and his assistant, John Coleman, went to The Advertising Council with a proposal for a crime prevention public service advertising campaign. The Ad Council tabled the plan, but it sparked the interest of Leo Perlis, Director of the AFL-CIO’s Community Services Division and a member of The Ad Council’s public policy committee. Contact was made with the officials in the U.S. Department of Justice’s Law Enforcement Assistance Administration (LEAA), and with Carl M. Loeb, Jr. – a businessman and activist with a longstanding interest in reforming the criminal justice system and a board member of the National Council on Crime and Delinquency. In late 1977, LEAA, the FBI, and the AFL-CIO formed a small planning group and included the National Sheriffs’ Association and the International Association of Chiefs of Police. Subsequently, two advisory bodies from 19 national agencies were formed that would become the nucleus of the Crime Prevention Coalition, now 136 member organizations strong. By 1982, the McGruff Public Service Advertising Campaign was an acknowledged success – in just two years McGruff’s “Take A Bite Out Of Crime,” slogan was known by over half the population and his advice heeded by a substantial portion of that audience. To help build a focus on prevention, the original partners in the Campaign decided to create a new home for McGruff in an agency whose sole mission was the prevention of crime. With seed funding from the federal government and supported by the leadership and financial contribution of Carl M. Loeb, Jr., the National Crime Prevention Council was created as a nonprofit organization to manage the McGruff Campaign and coordinate activities of the Crime Prevention Coalition. Mr. Loeb served as Chairman of the Board until his death in 1985. John A. Calhoun, formerly U.S. Commissioner of the Administration for Children, Youth, and Families, was selected as NCPC’s first executive director. Individuals who had been working on the Campaign became the core staff of the newly formed NCPC. Through the hard work and dedication of people around the country, NCPC has evolved into the nation’s resource for crime prevention. Aside from coordinating the efforts of the McGruff Campaign, NCPC provides comprehensive crime prevention technical assistance and training to communities throughout the United States; develops and implements highly-acclaimed and innovative youth development programs; runs pathbreaking demonstration programs such as the 10-city Community Responses to Drug Abuse and the seven-city Texas City Action Plan To Prevent Crime; disseminates information on effective crime prevention practices to thousands of individuals and organizations every year; and, publishes materials that reach millions, young and old. NCPC partners with socially responsible corporations to create mutually beneficial relationships. These corporate citizens enhance national and local crime prevention efforts and invest in NCPC, the national resource center for crime prevention. Not only do these companies provide financial resources, they provide management skills, marketing expertise, and creative synergy to all of NCPC’s programs. In October of 1994, RadioShack joined forces with NCPC and the National Sheriffs’ Association to form United Against Crime, a public-private alliance which offers a multi-year, free education program on crime prevention. The partnership is one of the largest public-private sector crime prevention initiatives ever undertaken and was formed to empower people to take action that will result in less crime, stronger families, and more active communities. RadioShack has underwritten the cost of the alliance’s program and is devoting space in each of its 7,200 electronic retail stores to showcase crime prevention information centers. Since August 1995, RadioShack has provided resources and introduced quarterly satellite crime prevention trainings for law enforcement, community leaders, and the public in over 150 sites. United Against Crime has been recognized by the Public Relations Society of New York with the Big Apple Award for Community Relations and by the International Association of Business Communications with the ACE Award for Community Relations.
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