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12 – White Collar and Organized Crime. Robert . Wonser. Introduction to Criminology. Crime and Delinquency. 1. Introduction. Corporate wrongdoing. White-collar crime. Organized crime. All have dire economic consequences. ID: 443170 Download Presentation

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12 – White Collar and Organized Crime. Robert . Wonser. Introduction to Criminology. Crime and Delinquency. 1. Introduction. Corporate wrongdoing. White-collar crime. Organized crime. All have dire economic consequences.

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Lesson 12 – White Collar and Organized Crime

Robert WonserIntroduction to CriminologyCrime and Delinquency

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Introduction

Corporate wrongdoingWhite-collar crimeOrganized crimeAll have dire economic consequences

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White-Collar Crime

Industrialization brought wealth for someAndrew Carnegie (steel)J.P. Morgan (banking)John D. Rockefeller (oil)Cornelius Vanderbilt (railroads)All gained massive fortunes through monopolizationConsidered to be “robber barons”

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Robber Barons

“Robber barons” - businessmen who used exploitative practices to amass their wealth, exerting control over national resources, accruing high levels of government influence, paying extremely low wages, squashing competition by acquiring competitors in order to create monopolies and eventually raise prices, and schemes to sell stock at inflated prices to unsuspecting investors in a manner which would eventually destroy the company for which the stock was issued and impoverish investors.

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Edwin Sutherlandand White-Collar Crime

Sutherland coined term white-collar crimeStudied U.S. corporationsMost engaged in antitrust violations, false advertising, bribery, and other offenses multiple times

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Defining White-Collar Crime

A crime committed by a person of respectability and high social status in the course of his occupationSutherland's definition has been criticized and revised

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Contemporary Viewsof White-Collar Crime

Occupational crimeCorporate crimeOrganizational crime

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Occupational Crime:Lawbreaking for Personal Gain

Employee theftPilferageTheft of merchandise, tools, stationary, and other itemsEmbezzlementTheft of cash and the misappropriation or misuse of fundsCollective embezzlement

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Professional Fraud: Health Care

Physicians, lawyers, and other professionalsSelf-regulationProfessional fraud

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Health Care Fraud

Exaggerating chargesBilling for services not rendered or a real patientBilling for services for fictitious or dead patients“Pingponging” - the unethical practice of repeatedly passing a patient from physician A to physician B and back again to overcharge the patient’s third-party payer—e.g., Medicaid, or, less commonly, a private insurer.Family “ganging” - term for health care provided by some physicians in financially disadvantaged regions in the US—e.g., inner cities—in which a patient is encouraged to bring his entire family along for a check-up or other evaluation on a return visit, regardless of whether it is medically indicated

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Health Care Fraud

“Churning” - In fee churning, a series of intermediaries take commissions through reinsurance agreements.“Unbundling” - Medicare and Medicaid often have special reimbursement rates for a group of procedures commonly done together, such as typical blood test panels by clinical laboratories. Some health care providers seeking to increase profits will "unbundle" the tests and bill separately for each component of the group, which totals more than the special reimbursement rates.

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Health Care Fraud

Providing inferior products to patientsFalsifying medical recordsBilling for inferior products never providedFalsifying prescriptionsInflating charges for ambulance servicesUnnecessary surgery

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Financial Fraud

Collective embezzlement - the stealing of company funds by top management. The term was first used to refer to one type of crime that characterized the U.S. savings and loan scandals of the 1980'sInsider trading - is the trading of a public company's stock or other securities (such as bonds or stock options) by individuals with access to non-public information about the company.

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Police and Political Corruption

Police corruption - is a form of police misconduct in which law enforcement officers break their social contract and abuse their power for personal or department gain.Political Corruption - is the use of powers by government officials for illegitimate private gain. An illegal act by an officeholder constitutes political corruption only if the act is directly related to their official duties, is done under color of law or involves trading in influence.Both involve violations of public trust

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Organizational Criminality and Corporate Crime

Corporate financial crimeFraudCheating BriberyOther corruptionNot antitrust violations or false advertising

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Organizational Criminality and Corporate Crime

Antitrust violations are of laws designed to protect trade and commerce from abusive practices such as price-fixing, restraints, price discrimination, and monopolization. The principal federal antitrust laws are the Sherman Act and the Clayton Act.Price-fixing - an agreement between participants on the same side in a market to buy or sell a product, service, or commodity only at a fixed price, or maintain the market conditions such that the price is maintained at a given level by controlling supply and demand.Restraint of trade - common law doctrine relating to the enforceability of contractual restrictions on freedom to conduct business. False advertising - is the use of false or misleading statements in advertising, and misrepresentation of the product at hand, which may negatively affect many stakeholders, especially consumers.

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Corporate Violence

Threats to health and safetyWorkers and workplace safetyData for workplace illness, injury, and death not exactAnnually Workplace deaths from illness = 50,000Workplace deaths from injury = 4,700Injuries and illness = 3,000,000

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Workplace Problem

Sometimes illness, injury, and death are instantly visible, sometimes notSometimes death comes much laterWhere's the crime?Asbestos industry example

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Corporate Violence

Consumers and unsafe productsDangerous products that kill or injureThree industries that pose the greatest dangerAutomobile PharmaceuticalFood

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Corporate Violence

Public/Environmental PollutionAir, land, and waterVery difficult to determine total number of injuries and deaths resulting from pollutionToxic wasteProfit

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Economic and Human Costs of White-Collar Crime

Costs more in lives and money than street crimeStreet crime = $16 billionWhite-collar crime = $575 billionAll corporate crime = $483 billionHealth care fraud = $77 billionEmployee theft = $15 billion

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Explaining White-Collar Crime

In many ways, white-collar criminals are similar to street criminalsThere are some differences

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Similarities with Street Crime

Both include stealing and violenceRely on opportunity and motivationTechniques of neutralizationSelf-control?Male offenders dominate both types of crime

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Differences from Street Crime

Most criminological theories do not account for white-collar criminalsInfluence of greedWhat would happen if we treated white collar criminals we do street criminals?

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Explaining White-Collar Crime

Lenient treatmentWeak/Absent regulationsDifficulty in proving corporate crimeWeak punishmentLack of news media coverageRace/Ethnicity and social class

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Reducing White-Collar Crime

Larger budgets for regulatory agencies Media emphasisSevere punishmentGreater imprisonmentStiffer fines

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Organized Crime

Linked to demand and supply of goods and services, legitimate or illegitimatePrimary source of income is still illegalDrugsProstitutionPornographyLoan-sharkingExtortion

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History of Organized Crime

PiracyNew York gangs in the early 1800sBy the 1900s, these gangs were well organized operations19th century robber baronsProhibition eraGambling

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Alien Conspiracy Model and Myth

Mafia mystiqueHierarchal, organized group of some 24 Italian families that control all organized crimeBest regarded as a mythOrganized crime does not produce the desire for vice or seduce honest politicians

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Controlling Organized Crime

Reduce public demand for illicit goodsLegalization of drugs and other illicit products/activitiesProvide alternative economic opportunities for young people

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