White Collar Crime Exam 4 Final

Social Control Theory:

Asks why someone does not engage in criminal behavior. The answer is that people with strong bonds to conventional institutions are constrained from engaging in delinquent or criminal conduct.

Inspectors General

Authority to conduct audits and investigations of departments or agencies to which they are attached. Inspectors general are granted some autonomy and certain powers. Report to the attorney general and Congress.

Control Balance Theory

Crime and deviance are a function of the "control balance ratio" or the amount of control one exercises relative to the amount of control imposed upon one. Either a surplus of control or a deficit of control should foster criminal behavior and deviance.

Federal Prosecutors

Federal prosecutors have assumed the primary responsibility for pursuing major white collar crime cases. Appointed by the president and are in charge of major federal prosecutions. Different presidents have had different attitudes as to whether such prosecutions were priority.

What is Durkheim's conception of 'anomie'? What is Merkin's revision of it?

Durkheim:A situation of normlessness, a breakdown of the guidelines for conventional behavior during rapid social change. Merkins': An enduring situation in a society in which a generalized goal of material success is promoted, but the means to achieve such success legitimately are not equally distributed. 3. Anomie theory has been applied quite specifically to understanding the innovative corporate use of illegal strategies to realize goals that cannot be achieved legitimately.

What is private policing?

Private Police are law enforcement bodies owned and/or controlled by non-governmental bodies. Investigate crimes that public police do not have time to investigate. Investigations can also be subsidized to private entities. Private Security Industry To note...most private security is devoted to the physical protection of a business asset and has nothing to do with white collar crime.

U.S. Secret Service

The Secret Service Investigates white collar crimes involving counterfeiting or forgery of any form of federal currency or warranted financial instrument.

FBI

1 J. Edgar Hoover was concerned with highly visible forms of professional crime. Bank robbery and kidnapping, the activities of alleged subversives, etc. If was after Hoover that the FBI became interested in WCC. 2. 2008, the main focus is on investigating financial crimes (due to congressional push).

Do regulatory agencies conceptualize themselves in terms of compliance or deterrence?

1. Assessments of compliance and noncompliance, and the actions officials taken when they identify violations also vary. Many cases are dropped because it is impractical to pursue them further. Cases that are pursued may be dealt with by administrative action or civil action, or referral for criminal prosecution. 2.Regulatory agencies confront a basic choice between emphasizing compliance or deterrence. Compliance - Persuasion/Cooperation Deterrence - Prosecution/Punishment Agencies think of themselves in terms of compliance. Informality and bargaining take precedence over the strict implementation of legal rules. However, agencies typically adopt some mixture of cooperative and punitive approaches.

Rational Choice Theory

1. Assume individuals desire utility (e.g., happiness, wealth, etc.) 2. Operating within their means (or constraints), individuals attempt to achieve their desired goals. 3. The "rational choice" is the one that obtains desired goals (the most utility) for the lowest cost. Decision to violate the Law are weighed against possible punishments. Simply put, pain of the punishment must outweigh the benefit of illegal gain.

How is WCC a matter of civil law? How is WCC a matter of criminal law?

1. Civil law has played a much larger role in responding to white collar crime. Civil law (tort) concerns itself with private, individual harms and objective responsibility. 2. Criminal law focuses on public, social harms and morally culpable conduct. 3. The role of intent is greater in criminal law. Criminal law focuses on the creation of risk rather than on actual harm. Criminal law insists on greater evidentiary certainty and is less tolerant of procedural informality. 4. Criminal law relies on public enforcement. Criminal law involves the deliberate imposition of punishment and the maximization of stigma and censure .

State Law Enforcement

1. Complex, interjurisdictional character of much white collar crime. 2. With new organizations and databases, e.g., National White Collar Crime Center, state law enforcement agencies are able to store information in a database for easy access.

What is the difference between the compliance approach and the punitive approach to WCC?

1. Compliance Approach Favors cooperative strategies. A cooperative strategy is both a practical necessity and a more effective way of limiting the harm of corporate activities. 2. Punitive Approach Rationale...For compliance to be achieved effectively, businesses and corporations have to be persuaded that the rules and laws directed at them are warranted and widely supported. Criminalization of harmful corporate activity is long overdue. Punitive sanctions are either an essential component or the only strategy that is likely to have an impact on corporate crime.

What characterizes conflict theory?

1. Conflict theory rejects the consensus theory notion of the social world as an organic or integrated system. 2. It is concerned with identifying how the values and interests of different groups in society are disproportionately able to influence the character and content of the law.

Social Process Theory/Differential Association Theory

1. Criminal behavior as learned through contact with others with a law-violating orientation. 2. Does not adequately account for structural origins of the illegal patterns of behavior and appears to confuse a process of involvement in criminal behavior with a cause of such behavior. Does not address the problem that some WCC is individualistic.

What is the difference between the deterrence approach and rehabilitation approach to WCC?

1. Deterrence is surely one of the central objectives of the criminal justice system Deterrence is the deliberate decision to refrain from engaging in illegal activity out of fear of legal sanctions. 2. Rehabilitation is the most recent rationale for penal response to crime. Provide convicted offenders with the education and job training they need to be able to support themselves by legitimate activities.

What is self-regulation? What are the arguments for it and against it?

1. Generally distinguishes white collar crime from conventional crime. Conventional criminals are not typically expected to police or regulate their own illegal conduct. 2. Why self-regulation? Government does not have the resources or expertise to police or regulate fully all the activities of corporations, retail businesses, professionals and legitimate white collar and blue collar entrepreneurs. However, The early 2000's demonstrated that many major US corporations are either unable or unwilling to police themselves.

What are some of the strategies in the defense of WCC?

1. Generally speaking, white collar crime defendants can afford private lawyers and accordingly get a much better defense. Defendants with private counsel usually have an advantage. Defense lawyers may seek to head off an indictment in exchange for the client's cooperation with prosecutors. If the client is indicted anyway, defense lawyers are likely to explore the best possible deal in return for a guilty plea. 2. Some common strategies: Hire private investigators to gather information helpful to them. Corporate lawyers use their clout to try get hostile judges off particular cases. If the case does go to trial, white collar defense lawyers attempt to exploit their superior financial resources to challenge the prosecution's case at every possible step. Stress defendant's "good character." Argue that a person with such good character would be highly unlikely to engage in illegal or unethical conduct.

What are the problems that arise for WCC in trials - Trial Jury, Judges, Sentencing.

1. Key Factors for Trial Juries: Representativeness Competence White collar crime defendants are more likely to face a jury of their peers. Jurors are more likely to hold corporations more blameworthy than individual executives for wrongdoing. Jurors are more likely to be sympathetic toward people like themselves. 2. The judge deals with defendants who are different from themselves and have committed offenses removed from their own patterns of behavior. In WCC cases, judges are often confronted with special challenges. Defendants are like the judge. The trial is likely to take longer. The testimony and evidence will be more dry and tedious 3. Two beliefs about the judicial sentencing of white collar offenders: White collar offenders are treated more leniently at sentencing than are conventional offenders. Sentencing is idiosyncratic and haphazard. Traditionally, judges have been reluctant to impose tough sentences. The shame of criminal prosecution is punishment enough for many such offenders. Allow businesspeople to remain in the community where they can resume productive activity and can generate income and make restitution to victims. Probation, Shorter Sentences

Interactionism

1. Labeling perspective on crime. Symbolic interactionist tradition emphasizing that meaning emanates from human interaction. 2. Has been principally concerned with the process of societal reaction on perceived crime: Powerful individuals and organizations are more likely to be able to avoid being labeled as deviant or criminal. Powerless individuals are less likely to be able to avoid being labeled as deviant or criminal.

How might we treat WCC as a moral issue?

1. Moral Outrage Anger and disgust are natural reactions to the greed of educated or affluent professionals, entrepreneurs, and retailers who engage in such activities. 2. Putting Business Ethics into the Curriculum Code of Ethics Compliance Officers

What is the difference between civil suits, class action suits, and citizen suits?

1. Most recent responses have taken the form of a civil lawsuit. Principal mechanism for attempting to control and punish white collar crime. These suits may occur in conjunction with criminal prosecution. Civil lawsuits most directly relevant to white collar crime are tort cases, and are sought in response to some injury, damage or loss. 2. Citizen suits - Civil lawsuits in which private citizens seek enforcement of a statute by petitioning the court, who may order the people or organizations violating the statute to halt their activities and, in some cases, assess fines. Class action lawsuits - Lawsuits in which a group of directly injured parties seek compensation and, in some cases, punitive damages from an organization.

What are the different regulatory agencies (covered in class)?

1. Securities and Exchange Commission, the Internal Revenue Service, the U.S. Postal Inspection Service, the Commodity Futures Trading Commission, and the Treasury Department's Financial Crimes Enforcement Network Food and Drug Administration 2. PPT: 80-94

What are the different forms self-regulation might take?

1. Self regulation in Financial firms: Firms usually hire compliance officers. Responsible for monitoring the firm's activities. Ensure that personnel comply with pertinent laws and regulations. 2. Professional organizations have no formal disciplinary powers beyond expulsion from association memberships. These associations form their own codes of conduct and evaluate allegations of 'professional misconduct' and are also empowered to revoke licenses and the right to practice. 3.Self-regulation or self-policing has the obvious advantages of economic efficiency and appropriate expertise. Businesses and professions have found it advantageous to control themselves. But...History suggests that this is unlikely to be extensive or effective unless formidable external pressures compel businesses and professions to take this responsibility more seriously.

State Attorney General

1. State Attorney Generals office have more, but still limited resources pursue significant white collar crime cases. Fraudulent transactions were the most common white collar crimes handled. But... Less than half of the white collar crime cases were disposed of by a criminal prosecution. The remainder were dropped or handled by civil or administrative procedures. 2. State prosecutors have begun to pursue corporations for violations of state laws more often when the following are indicated: Amount of money involved Number of victims Their belief in the guilt of the accused Prosecutorial success rate

What are integrated theories of WCC and how are they applied to fraud?

1. Structural Level A capitalistic political economy has a core characteristic - the relentless pursuit of profit and a constant search for new markets. 2. Organizational Level We have uncoupling of mortgage originators from mortgage holders. 3. Individualistic Level Those who were at the center of the frauds were sometimes afflicted with egocentric, overly optimistic, narcissistic, entitlement-oriented, and excessive risk-taking personality attributes, as well as character flaws in terms of integrity.

Internal Revenue Service/ Criminal Investigation Division

1. The I.R.S. investigates tax frauds or misrepresentations involving corporations, businesses and individuals. 2. Tax audits and investigations may precipitate investigations of other types of corporate and occupational crime when they uncover evidence of substantial income that cannot be ascribed to legitimate sources. 3. Best WCC lab in the US. Has the capability of reconstructing shredded documents, enhancing voices on tapes, and analyzing altered documents, fingerprints, ink, paper, and polygraphs.

What is a regulatory system response to WCC?

1. The dominant legal response to crime by businesses is regulatory rather than penal. 2. Problem: Regulation has roughly been defined as any attempt by the government to control the behavior of citizens, corporations, or sub-governments. Yet, there is no real consensus on its meaning. 3. Economic Regulation Addresses market relations and attempts to ensure stability in the realm. 4. Social Regulation Addresses harmful consequences to workers, consumers, and citizens of productive activities.

What is the Marxist version of the conflict theory and how does it apply to WCC?

1. The most basic form of structural explanation for white collar crime forces on the nature of society itself. 2. Karl Marx viewed crime as an essential product of a social class society, and of capitalism in particular. Humans manifest such patterns of behavior, and that capitalism promotes these tendencies in human beings. The worst crime committed in the name of capitalism is the systematic exploitation of the working class. Crime by the rich and poor alike is a rational, inevitable response to an economic system that fosters greed, egoistic or individualistic tendencies, competitiveness, and debasement of humans.

What is corporate criminal liability?

1. The question of whether corporations should be held responsible for illegal acts is controversial. Is a corporation an entity with an existence separate from shareholders and other participants or is simply an aggregation of natural individuals? 2. Corporate criminal intent was recognized in 1909. New York Central & Hudson River Railroad Co. v. U.S. A corporation was held criminally liable for unlawful act of its agent in the payment of rebates to another company. Ruling: A corporation may be held criminally liable for the acts of its agents acting within the scope of their authority.

How does each of the following address WCC? Local Law Enforcement

1. White collar crime has not been a principle concern of law enforcement agencies. 2. Why? The police have lacked jurisdiction, expertise, and resources. Principal training is oriented toward conventional crime. More likely to be attracted to the more dramatic forms of street crime than to white collar crime. White collar crime require a greater investment of time with a lower probability of a successful resolution.

Explain the development of health and safety law.

1. Workers die prematurely from occupationally related accidents and illnesses. Workers are seriously injured or become ill due to occupational conditions. 2. The Occupational Safety and Health Act of 1970 (OSHA) Mission: To "assure safe and healthful working conditions for working men and women by setting and enforcing standards and by providing training, outreach, education and assistance." Provides protection for whistleblowers. Recordkeeping Requirements

What is the function of regulatory agencies?

1. independent governmental commission established by legislative act in order to set standards in a specific field of activity, or operations, in the private sector of the economy and to then enforce those standards. Regulatory agencies function outside executive supervision. 2. Regulatory agencies are typically directed by a commission Its members are appointed by the president and subject to congressional confirmation. Regulatory agencies have three basic functions: Rule-Making Administration Adjudication

What are sanctions? Positive sanctions? Negative sanctions?

1. sanction' is most commonly equated with punishment. But, sanctions can be: Positive Grants, bounties, fees, loan guarantees, prizes and awards Negative Imprisonment, fines and occupational disqualification

Sherman Act

1890, Congress passed the Sherman Act Bans efforts to "prevent full and free competition." Prohibited combinations that tended to raise the cost to the consumer and actions causing a "restraint in trade" that could lead to monopolies. Gives private parties the right to sue for treble damages for violations of the act and gave the state in which such violations occurred the power to criminally prosecute and to see injunctions.

What is the RICO Act and what does it cover?

1970, Organized Crime Control Act 1. Special section on Racketeer influenced and Corrupt Organizations Act (RICO). Prohibits acquisitions, operation, or income from an "enterprise," through a "pattern" of "racketeering activity." 2. Broadens federal criminal jurisdiction to include violations of state law, including that individuals convicted under the RICO law face up to 20 years in prison, substantial fines, and mandatory asset forfeiture.

Grand Jury

A legal body (16-23 people) which has both accusatory and investigatory functions. A grand jury is separate from the courts. A grand jury indictment is constitutionally required in the federal system. A grand jury acts as a check on politically motivated prosecution.

What is structural transformation and how is it a response to WCC?

A substantial reduction of white collar crime requires a transformation of society's political, economic, and cultural structure. Critics regard the following to be fundamental factors contributing to socioeconomic inequality: Unemployment, overwork, poverty, diminished democracy, environmental degradation, corporate crime. structural transformation requires: Large-scale, global change. Small-scale, local reform only has limited effect. Recognition that it has little initial support. Historical mistakes Associated cultural transformation

What are the historical origins of WCC?

Ancient Mesopotamia (@2400 BCE) Old Testament Solon (476 BCE) "If anyone prevents grain from being imported into the land of Teos by any pretext or device, either by sea or from the mainland, of forces up prices of imported grain, that man shall die both himself and his family." Roman Empire Talmudic Law (70-600 CE)

What is the development of anti-trust law?

Antitrust law - Law that regulates economic competition. 1. The entire community benefits when individual entrepreneurs compete freely with each other. They are motivated to produce the highest-quality goods at the lowest possible price in the interest of enticing consumers to buy their products. However-after the Civil War Era: Emergence of Trusts Legal entities or holding companies for corporations engaged in the same type of business, fixed prices, controlled production, and organized geographical monopolies for an entire industry. Stock market crashes and periods of economic depression were blamed on the maneuvers of the trusts and other members of the economic elite.

Special Prosecutors

Cases of governmental crime or political white collar crime are inherently problematic. Special prosecutors, or independent counsels, have sometimes been appointed in politically sensitive cases to act free from direct supervision by the administration in power. Created in response to Watergate.

What are the two theories upon which corporate criminal liability is based?

Imputation theory Corporations are liable for the intent and acts of its employees on any level in the corporate hierarchy. Identification theory Liability is direct insofar as corporate actors are acting on behalf of the corporation.

What are the most common forms of punishment for WCC? Explain each.

Probation: The offender is unlikely to be viewed as a direct physical threat to the community. More likely to be viewed as capable of remaining in the community as a constructive, gainfully employed citizen. Enforced Self-regulation: A restorative justice system that privileges cooperative initiatives may deter, incapacitate, and rehabilitate more effectively than a punitive system (Braithwaite). Fine, Restitution and Community Service: Economic sanctions have been especially commonly imposed on convicted offenders. These sanctions can take the form of: The forfeiture of assets Mandatory restitution to victims Criminal or civil fines Additional issues are involved in imposing fines: Challenges to setting the appropriate amount. Determining whether the fine should be based in losses to society or gains to offenders. The U.S. Sentencing Commission's attempts to establish guidelines for fines took onto account various factors: Amount of loss The offense "multiple" (difficulty of detecting and prosecuting, to ensure that the fine is both a deterrent and a just punishment) The enforcement costs involved Occupational disqualification, or loss of license, can be a fairly drastic penalty for an individual. It is punitive and intended as a deterrent. It incapacitates offenders by depriving them of opportunities for committing their occupationally related crimes. To be effective, it must be administered from outside the corporation. Corporations may be reluctant to disqualify their own executives.

Explain the difference in role and jurisdiction of the following: Local Prosecutors

Prosecutors have formidable discretionary power over which criminal cases will be prosecuted and which charges will be pursued. Lack of Resources Large expenditures of time. Special investigative skills Greater difficulties in establishing criminal intent Problems in obtaining appropriate witnesses or victim cooperation. When prosecutors pursue white collar crime cases they generally are cases of: Consumer fraud, insurance fraud, false claims, environmental offenses, securities fraud and tax fraud, and illegal payments cases

Routine Activities Theory and Rational Choice Theory

RAT takes a macro-level view. Spans space and time Emphasizes victim behavior/decisions RCT takes a situational view. Focuses on specific crime events. Emphasizes offender behavior/decisions

What is the Sentencing Reform Act and what did it do?

Sentencing Reform Act of 1984 marked the formal adoption of federal sentencing guidelines. The U.S. Sentencing Commission was created to oversee the production, implementation and revision of the guidelines (upheld in Mistretta v. United States). Constrains judicial discretion. The adoption of federal sentencing guidelines increased the fines and jail sentences for white collar crime offenders.

What theories attempt to explain WCC in structural terms?

Sociological theories : A structural perspective in criminology focuses either on social conditions that account for specific forms of criminal behavior or on how the distribution of power and resources influences how crime is defined and generated.

Neutralizations, Rationalizations, and Accounts

Starting Presumptions: White collar offenders tend not to be classic "outlaw" types. White collar criminals most typically conform to most laws and social conventions. White collar criminals are unlikely to identify with or endorse the activities of conventional offenders.

Explain the development of environmental protection law.

The Refuse Act of 1899 The first law to criminalize the dumping of wastes into navigable waters. Environmental Protection Agency (EPA) was established by executive order in 1970. Almost all environmental statutes include criminal provisions, but differ on degree of liability. However... Many constraints have limited full implementation of the environmental law enacted since the early 1980's. Consider the Comprehensive Environmental Response, Compensation, and Liability Act of 1980. Regulatory agencies have often been unwilling or unable to implement environmental crime laws fully. Judges have been reluctant to impose the criminal penalties permitted by the law on environmental offenders.

U.S. Customs Service

U.S. Customs Investigates money laundering, falsified import or export documents, illegal product dumping, and foreign corrupt payment.

What is radical/critical criminology?

We need to focus on a more idealist framework. White collar crime as a function of the intentions of elites. Critical criminology often examines the criminalization process as opposed to the "causes" of crime. Concerned with how crime is conceived of or constituted Can be postmodernist, feminist, constitutive, etc.

U.S. Postal Inspection Service

White collar crime is far more likely to involve the use of the U.S. mail. Postal Inspectors are the oldest federal law enforcement agency. Maintains the overall security and integrity of the mail system. Cannot prosecute frauds or officially mediate disputes concerning frauds. It can refer cases for criminal prosecution.

What is a code of ethics?

code of practice may be styled as a code of professional responsibility, which will discuss difficult issues, difficult decisions that will often need to be made, and provide a clear account of what behavior is considered "ethical" or "correct" or "right" in the circumstances.