Chapter 12 - White-Collar Crime and Organized Crime

Question 1

Overview

White-Collar Crime

Edwin Sutherland

Answer 1

A crime committed by a person of respectability and high social status in the course of his or her occupation

1. Ruthless Competitiveness (Sports)
2. Arrogance
3. Sense of Entitlement

Question 2

Organizational / Corporate Crime

Answer 2

• Organizational crime refers to white-collar crime committed with the support and encouragement of a formal organization and intended to advance the goals of that organization

Example: A car company using cheap brakes on cars

Question 3

Occupational Crime

Answer 3

• Occupational crime refers to violations of the law in the course of practicing a legitimate occupation for personal gain

Example: Robert R. Courtney was a pharmacist who sold watered down drugs for cancer patients and listing it as the dose it was supposed to be and selling it on the street

Question 4

Organizational Crime

Organizational Crime

Answer 4

• Social Organization of Corporations
• Corporation as a Juristic Person - The legal concept that corporations are liable to the same laws as natural persons - Lack of Restraint, Corporate Conscience
• Executive Disengagement - Pyramid Structure of Corporations - The custom by which lower-level employees assume that executives are best left uniformed of certain decisions and actions of employees

Question 5

Organizational Crime

Executive Disengagement

Answer 5

• Barings Bank
• Approx. $1 Billion loss on Tokyo Stock Market

Question 6

Organizational Crime

Criminogenic Market Structure

Answer 6

An economic market structure that is structured in such a way that it tends to produce criminal behaviour

Question 7

Organizational Crime

The Enron Scandal

Accounting Scandals

Answer 7

• Natural gas pipeline company
• CEO Kenneth Lay
• Risky and illegal Financial Transactions
• High Executive Bonuses

Question 8

Organizational Crime

2008 Financial Collapse

Answer 8

• Risky Lending Practices (ex. Ninja Mortgages)
• Goldman Sachs
• Mortage-bundling - Collateralized Debt Obligations

Question 9

Organizational Crime

Corporate Actors and Limited Civil Liability

Answer 9

• Separation of Shareholder and Management interests
• Civil remedies largely ineffective

Question 10

Organizational Crime

Monopolistic Enterprise

Answer 10

Any corporation that controls all, or the majority, of the market for a particular product or service

Question 11

Organizational Crime

Anticombines Legislation

Answer 11

Law designed to prevent and punish corporations that work together to reduce competition

Question 12

Organizational Crime

Sentencing White-Collar Offenders

Answer 12

• Judicial Attitudes
  Belief that white-collar offenders experiences punishment differently
  Compromise with combinations of short prison sentences and fines
• Tougher penalties evident in USA
• No apparent increase in punitiveness in Canada

Question 13

Organizational Crime

Corporate Crime and Legal Sanctions

Answer 13

• Higher public concern with violent and street crime
• Investigations are lengthy and expensive
• Complexity of information

Question 14

Occupational Crime

Profesional Misconduct and Malpractice

Answer 14

1. Misconduct and failure of organizations to deal with misconduct
2. Often hidden because dealt with by professional associations

Question 15

Occupational Crime

Unprofessional Conduct and Malpractice

Answer 15

Example: Charles Smith was a doctor and head of forensic pathologist, during his time he conducted approximately 1,000 autopsies’, he was removed as the head because he was involved in 3 suspicious deaths. It was determined that he made a number of errors.

Question 16

Occupational Crime

Investment and Securities Fraud
(Type)

Answer 16

• A variety of illicit activities and strategies designed to deceive potential investors or misrepresent capital market participants

Example: PONZI Scheme (a form of investment fraud)

Question 17

Occupational Crime

Insider Trading

Answer 17

• When an employee or owner of a company uses information about the company that is unavailable to the public to buy or sell stocks

Example: Martha Steward (uses information that’s not accessible)

Question 18

Occupational Crime

Pump and Dump

Answer 18

• Stock promoters take a worthless company, invent false stores about the company’s value, and solicit potential investors

Example: Bre-X

Question 19

Organized Crime

Criminal Code of Canada

Answer 19

A criminal organization is a group that:

• Compromised of 3 or more persons in or outside canada
• One of it’s main purposes or activities is the facilitation or commission of one or more serious offenses

A criminal organization DOES NOT include:
* A group that forms randomly for immediate commission of a single offense

Question 20

Charcateristics of Organized Crime

Structural

Answer 20

• Systemic pattern of Relationships
• Insulation
• Transnational

Question 21

Charcateristics of Organized Crime

Institutional

Answer 21

• Continuity
• Exclusive membership
• Transnational

Question 22

Charcateristics of Organized Crime

Commercial

Answer 22

• Legal Commercial Activities
• Consensual and Predatory Crimes

Question 23

Charcateristics of Organized Crime

Behavioural

Answer 23

• Rationality
• Rules, Codes

Question 24

Organized Crime

Predatory Crimes

Answer 24

• A type of crime in which a victim suffers a direct physical, emotional, or financial loss

Example: Extortion

Question 25

# Organized Crime Consensual Crimes

Answer 25

* A type of crime where no traditional "victim" exists * Two or more individuals voluntarily engage in an illicit activity ## Footnote Example: Money Laundering, Loansharking

Question 26

# Organized Crime: Etiological Theories Alien Conspiracy Theory | A political idea

Answer 26

* This theory argues that organized crime in America is the result of the importation of secret criminal societies that are rooted in foreign culture * Not a scholarly theory * 1950s U.S Senate Committee * No nation-wide criminal conspiracy with centralized control | Organized Crime is a North America Creation ## Footnote Example: La Cosa Nostra, Donald Trump Wall

Question 27

Theories of Organized Crime

Answer 27

Economic Theory of Organized Crime * The underground economy is an extension of the legitimate economy wherein criminal organizations come into existence to supply good and services that are demanded by the public but declared illegal by the state * Parallels between the legal and illegal commerce *Demand for prohibited goods drvies illegal supply * A relationship between a buyer and a seller * Criminal entrepreneurs seek the max. profit * Laws of supply and demand dictate price

Question 28

# Organized Crime: Theories of Structure Bureaucratic - Hierarchical Model

Answer 28

* Criminal groups as highly structured, tightly organized * Deliberate & rational arrangement of position

Question 29

# Organized Crime: Theories of Structure Kinship Model

Answer 29

* A social grouping shaped by culture, tradition, and structured around kinship relationships ## Footnote Example: Oldest person in a family sitting at the head of the dinner table

Question 30

# Organized Crime: Theories of Structure Patron-Client Model

Answer 30

* A loose, fluid system of power and "business" relationships that stem from a centralized leadership to provide services ## Footnote Example: trafficking drugs across the boarder