Transcript CRJ270 - Chapter 12

Criminology Today
AN INTEGRATIVE INTRODUCTION
SEVENTH EDITION
CHAPTER
12
White-Collar and
Organized Crime
Criminology Today, 7th Edition
Frank Schmalleger
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All Rights Reserved
A Brief History of White-Collar
Crime
• Financial scandals have a long history
in the U.S.
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Teapot Dome 1929
Ivan Boesky – insider trading 1980s
Michael Milken – 1980s securities fraud
S&L disaster 1980s
Sham banking operations 1990s
continued on next slide
Criminology Today, 7th Edition
Frank Schmalleger
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A Brief History of White-Collar
Crime
• 21st century crimes
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Enron
WorldCom Inc.
Adelphia Communications
ImClone
Martha Stewart
Various securities firms
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Frank Schmalleger
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Understanding White-Collar Crime
• Edwin H. Sutherland’s definition:
 violations of the criminal law committed
by a person of respectability and high
social status in the course of one’s
occupation
• Emphasized need to study the
criminality of the upper-class
continued on next slide
Criminology Today, 7th Edition
Frank Schmalleger
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Understanding White-Collar Crime
• Said white-collar criminals are less
likely to be investigated, arrested, or
prosecuted than other types of
offenders
Criminology Today, 7th Edition
Frank Schmalleger
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Definitional Evolution of WhiteCollar Crime
• White-collar crime (Edelhertz)
 committed by nonphysical means and
by concealment or guile…
• Upperworld crime (Geis)
 crimes by persons not considered the
‘usual’ kind of offenders
continued on next slide
Criminology Today, 7th Edition
Frank Schmalleger
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Definitional Evolution of WhiteCollar Crime
• Blue-collar crime
 crimes by members of less prestigious
occupational groups
• Occupational crime
 crimes through opportunity created
during legal occupation
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Frank Schmalleger
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Green’s Typology of Occupational
Crime
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Organizational occupational crime
State authority occupational crime
Professional occupational crime
Individual occupational crime
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Frank Schmalleger
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White-Collar Crime Today
• Early definitions focused on the
violator, rather than the offense when
deciding whether to classify a crime as
“white collar”
• Today, the focus has shifted to the
nature of the crime, rather than the
persons or occupations involved
Criminology Today, 7th Edition
Frank Schmalleger
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Corporate Crime
• Corporate crime
 violation of a criminal statute by a
corporate entity or by its executives,
employees, or agents acting on behalf
of and for the benefit of the corporation
• Culpability greatest when company
officials are shown to have had advance
knowledge
• Corporate liability unique to U.S.
Criminology Today, 7th Edition
Frank Schmalleger
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Financial Crime
• Corporate fraud
 accounting schemes, self-dealing by
corporate executives, obstruction of
justice, insider trading, kickbacks,
misuse of corporate property for
personal gain
continued on next slide
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Frank Schmalleger
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Financial Crime
• Securities and commodities fraud
 stock market manipulation, high-yield
investment fraud, advance-fee fraud,
hedge-fund fraud, commodities fraud,
foreign exchange fraud, broker
embezzlement
continued on next slide
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Frank Schmalleger
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Financial Crime
• Health-care fraud
 Particularly target Medicare and
Medicate but all health-care programs
are subject to fraud
• Mortgage fraud
 Corporate fraud involving subprime
mortgage lending companies
continued on next slide
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Frank Schmalleger
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Financial Crime
• Insurance fraud
 Insurance industry size makes it a
prime target for criminal activity
continued on next slide
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Financial Crime
• Mass-marketing fraud
 fraud connected with communications
media (telemarketing, mass mailings,
Internet, etc.)
• Money laundering
 the process by which illegal gains are
disguised as legal income
Criminology Today, 7th Edition
Frank Schmalleger
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Environmental Crimes and Green
Criminology
• Violations of the criminal law that
damage some protected or otherwise
significant aspect of the natural
environment
• Green criminology
 the study of environmental harm, law,
regulation, victimization, and justice
Criminology Today, 7th Edition
Frank Schmalleger
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Terrorism and White-Collar Crime
• Terrorist activity frequently involves
white-collar crime
 Terrorists need money
 Lower profile than street crimes
• One way to curtail terrorist activities is
through legislation criminalizing the
financing of terrorism
Criminology Today, 7th Edition
Frank Schmalleger
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Causes of White-Collar Crime
• Sutherland – differential association
theory
 White-collar criminality is learned
• Hirschi and Gottfredson – general
theory
 White-collar criminals are motivated by
the same forces that drive other
criminals
continued on next slide
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Causes of White-Collar Crime
• Braithwaite – integrated theory
 White-collar criminals motivated by
disparity between corporate goals and
limited conventional opportunities
Criminology Today, 7th Edition
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Curtailing White-Collar and
Corporate Crime
• White-collar crimes are difficult to
investigate, prosecute, convict
 Not always clear what happened
 Offenders better educated – better able
to conceal their activities
 Evidence often understandable only to
financial or legal experts
 Offenders can hire excellent defense
attorneys
continued on next slide
Criminology Today, 7th Edition
Frank Schmalleger
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Curtailing White-Collar and
Corporate Crime
• President G.W. Bush
 Corporate Fraud Task Force
 Sarbanes-Oxley Act
• President B. Obama
 Financial Fraud Enforcement Task Force
 Fraud Enforcement and Recovery Act
 New initiatives targeting financial crimes
and unfair trading practices
continued on next slide
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Frank Schmalleger
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Curtailing White-Collar and
Corporate Crime
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Sarbanes-Oxley Act (2002)
Sherman Act (1890)
Clayton Act (1914)
Securities Act (1933)
Securities Exchange Act (1934)
Criminology Today, 7th Edition
Frank Schmalleger
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Organized Crime
• Organized crime
 Unlawful activities of a highly organized
group engaged in supplying illegal
goods/services
• Italian criminal organizations came to
the U.S. in late 19th/early 20th
centuries
• Became a quasi-police organization in
Italian ghettos of American cities
continued on next slide
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Frank Schmalleger
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Organized Crime
• Ethnic succession
 The continuing process whereby one
immigrant or ethnic group succeeds
another through assumption of a
particular position in society
continued on next slide
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Organized Crime
• Jewish and Italian criminal groups
flourished in New York City in the late
19th/early 20th centuries
• In mid-20th century, organized crime in
the US became the domain of Italian
Americans
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Frank Schmalleger
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Prohibition and Official Corruption
• Prohibition was a godsend for the Mafia
• Existing infrastructure allowed efficient
entry into running/sale of contraband
liquor
• Huge profits led to wholesale bribery of
government officials, quick corruption
of many law enforcement officers
Criminology Today, 7th Edition
Frank Schmalleger
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Activities of Organized Crime
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Racketeering
Vice operations
Theft/fence rings
Gangs
Terrorism
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Other Organized Criminal Groups
• Criminal enterprise
 Group of individuals with an identifiable
hierarchy, and extensive supporting
networks, engaged in significant
criminal activity
continued on next slide
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Frank Schmalleger
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Other Organized Criminal Groups
• Key elements of true criminal
organization
 Function independently of any members
(including leader)
 Have continuity over time as personnel
change
continued on next slide
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Frank Schmalleger
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Other Organized Criminal Groups
• State laws defining criminal enterprise
more inclusive than federal statutes
• Stereotype is Italian and Sicilian
Mafioso
 Face of organized crime in US changed
 Threat broader, more complex
 Groups of different nationalities operate
in US or target US citizens from afar
Criminology Today, 7th Edition
Frank Schmalleger
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Figure 12-4 International Organized Criminal Groups Whose Activities Impact the United States
Source: Schmalleger, Frank J., Criminology. Printed and Electronically reproduced by permission of Pearson
Education, Inc., Upper Saddle River, New Jersey.
Criminology Today, 7th Edition
Frank Schmalleger
Copyright © 2015 by Pearson Education, Inc.
All Rights Reserved
Transnational Organized Crime
• Transnational organized crime:
 Unlawful activity undertaken and
supported by organized criminal groups
operating across national boundaries
 Major 21st century challenge
continued on next slide
Criminology Today, 7th Edition
Frank Schmalleger
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Transnational Organized Crime
• Globalization of crime requires
coordination of law enforcement efforts
around the world
• U.S. law enforcement activities have to
expand beyond national borders
Criminology Today, 7th Edition
Frank Schmalleger
Copyright © 2015 by Pearson Education, Inc.
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Organized Crime and the Law
• Hobbs Act
 the first federal legislation aimed
specifically at curtailing the activities of
organized crime
• RICO
 Racketeer Influenced and Corrupt
Organizations statute
 Asset forfeiture
Criminology Today, 7th Edition
Frank Schmalleger
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Policy Issues: The Control of
Organized Crime
• Increase the resources available to law
enforcement agencies
• Increase law enforcement authority
• Make legitimate opportunities more
readily available
• Decriminalization or legalization to
decrease opportunity
Criminology Today, 7th Edition
Frank Schmalleger
Copyright © 2015 by Pearson Education, Inc.
All Rights Reserved