1. Chapter 12 White-Collar and Organized Crime
Frank Schmalleger
PowerPoint presentation created by
Ellen G. Cohn, Ph.D.

2. White-Collar Crime 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
Today’s criminals are more sophisticated
White-collar criminals are less likely to be investigated, arrested, or prosecuted than other types of offenders

3. White-Collar Crime Insider trading: Bank fraud:
Equity trading based on confidential information about important events that may affect the price of the issue being traded
Bank fraud:
Fraud or embezzlement that occurs within or against financial institutions that are insured or regulated by the United States government

4. Definitional Evolution of White-Collar Crime
The early definitions focused on the violator, rather than the offense
Today, the focus has shifted to the nature of the crime, rather than the persons or occupations involved

5. Definitional Evolution of White-Collar Crime
Herbert Edelhertz defined white-collar crime as:
any illegal act or series of illegal acts committed by nonphysical means and by concealment or guile, to obtain money or property, to avoid the payment or loss of money or property, or to obtain business or personal advantages
Gilbert Geis defined upperworld crime as:
a label designed to call attention to the violation of a variety of criminal statutes by persons who at the moment are generally not considered, in connection with such violations, to be the ‘usual’ kind of underworld and/or psychologically aberrant offenders

6. Definitional Evolution of White-Collar Crime
Blue-collar crime:
Law-violating behavior by members of less prestigious occupational groups
Occupational crime:
Any act punishable by law that is committed through opportunity created during the course of a legal occupation

7. Occupational Crime Organizational occupational crime
Crime committed for the benefit of an employing organization
State authority occupational crime
Crimes by officials through the exercise of their state-based authority

8. Occupational Crime Professional occupational crime
Crimes committed by professionals in their capacity as professionals
Individual occupational crime
Crimes by individuals as individuals

9. Corporate Crime Corporate crime:
The 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

10. Corporate Crime Environmental crimes:
Violations of the criminal law, which, although typically committed by businesses or by business officials, may also be committed by other individuals or organizational entities, and which damage some protected or otherwise significant aspect of the natural environment.
Whaling
Intentional pollution

11. Causes of White-Collar Crime
Sutherland
White-collar criminality, like other systematic criminality, is learned
Theory of differential association applied to white-collar crime

12. Causes of White-Collar Crime
Hirschi and Gottfredson’s general theory of crime
White-collar criminals are motivated by the same forces that drive other criminals
Self interest, the pursuit of pleasure, the avoidance of pain
White-collar crime is fairly rare because the personal characteristics of most white-collar workers produce conformity, not criminality

13. Causes of White-Collar Crime
John Braithwaite
White-collar criminals are motivated by a disparity between corporate goals and the limited opportunities available through conventional business practices
Integrated theory that includes elements of
Strain theories
Subcultural theories
Labeling theory
Control theory

14. Curtailing White-Collar and Corporate Crime
Federal efforts
The Corporate Fraud Task Force
Sarbanes-Oxley Act (2002)
Sherman Act (1890)
Clayton Act (1914)
Securities Act (1933)
Securities Exchange Act (1934)

15. Curtailing White-Collar and Corporate Crime
Coleman’s four areas of reform
Ethical
Enforcement
Structural
Political

16. Organized Crime Organized crime:
The unlawful activities of the members of a highly organized, disciplined association engaged in supplying illegal goods and services, including gambling, prostitution, loan-sharking, narcotics, and labor racketeering

17. History of Organized Crime in the United States
Roots predate establishment of the U.S.
Italian organized crime in the U.S.
The Black Hand (La Mano Negro)
Mafia (roots in Sicily)

18. La Cosa Nostra Ethnic succession:
The continuing process whereby one immigrant or ethnic group succeeds another through assumption of a particular position in society
Jewish and Italian criminal groups flourished in New York City prior to the arrival of the Italian Mafia
Organized crime in the U.S. has largely been the domain of Italian Americans for the last half century

19. Prohibition and Official Corruption
Prohibition gave organized crime a vital boost
Mafia operations before Prohibition were “small time”
Profits from bootlegging led to bribery of government officials and corruption of law enforcement officers
Heritage of Prohibition-associated corruption remains

20. The Centralization of Organized Crime
Organized crime leaders worked to consolidate power during Prohibition
Al Capone versus “Bugs” Moran
The Saint Valentine’s Day massacre
Mafia activity went underground after 1931

21. The Centralization of Organized Crime
The Kefauver Committee
A nationwide crime syndicate (the Mafia) exists with tentacles in many large cities
The American mafia has international linkages
Mafia leaders usually control the most lucrative rackets in their cities
Leadership is in a group, not a single individual

22. The Centralization of Organized Crime
Family organization:
Boss
Underboss
Counselor/consigliere
Lieutenants/caporegime
Soldiers/soldati
Those employees below the soldiers are not members of the family

23. A Typical Organized Crime Family

24. La Cosa Nostra Today
Five of the 24 families in the U.S. operate out of New York
Luciano/Genovese family ( core members)
Mineo/Gambino family ( core members)
Reina/Lucchese family (125 core members)
Profaci/Colombo family (100 core members)
Bonanno family (75 core members)

25. Activities of Organized Crime
Five types of activity:
Racketeering
Vice operations
Theft/fence rings
Gangs
Terrorism
Primary motivation for all activities is money

26. Activities of Organized Crime
Gambling
Loan-sharking
Large-scale drug trafficking
Fencing
Infiltration of legitimate businesses
Labor union racketeering
Illegal copying and distribution of recorded media
Pornographic presentations (snuff films)

27. Code of Conduct Omerta:
The informal, unwritten code of organized crime, which demands silence and loyalty, among other things, of family members
Concentrates power in the hands of crime bosses and ensures their protection
Key requirements
Obey your superiors
Keep silent

28. Other Organized Criminal Groups
Black Mafia
Cuban Mafia
Haitian Mafia
Colombian cartels
Russian Mafia
Asian criminals
Inner-city gangs
Outlaw motorcycle gangs
Latino organized groups

29. Transnational Organized Crime
Unlawful activity undertaken and supported by organized criminal groups operating across national boundaries
A major force in world finance
Major challenge of the early twenty-first century

30. Organized Crime and the Law
Hobbs Act
RICO
Racketeer Influenced and Corrupt Organizations statute
Asset forfeiture

31. Money Laundering Money laundering:
The process of converting illegally earned assets, originating as cash, to one or more alternative forms to conceal such incriminating factors as illegal origin and true ownership
Money Laundering Control Act
Bank Secrecy Act

32. 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