1. Copyright © 2012, 2009, 2006, 2001, 1997 by Pearson Education, Inc. Upper Saddle River, New Jersey 07458 All rights reserved 0 Criminology: A Sociological Understanding, 5/e Steven E. Barkan Lesson 12 - White-Collar and Organized Crime

2. Copyright © 2012, 2009, 2006, 2001, 1997 by Pearson Education, Inc. Upper Saddle River, New Jersey 07458 All rights reserved 1 Criminology: A Sociological Understanding, 5/e Steven E. Barkan White-Collar and Organized Crime Lesson Overview White-Collar Crime –Edwin Sutherland and White-Collar Crime –Defining White-collar crime –Occupational Crime: Law-breaking for personal use –Organizational Criminality and Corporate Crime –Economic and human costs –Explaining white-collar crime –Reducing white-collar crime Organized Crime –History –Alien-Conspiracy Model and Myth –Controlling Organized Crime

3. Copyright © 2012, 2009, 2006, 2001, 1997 by Pearson Education, Inc. Upper Saddle River, New Jersey 07458 All rights reserved 2 Criminology: A Sociological Understanding, 5/e Steven E. Barkan White-Collar Crime Introduction –Historically, criminology focused on street crime –Industrialization created problems –Wealthy railroad tycoons engaged in crime and questionable business practices as they acquired their fortunes

4. Copyright © 2012, 2009, 2006, 2001, 1997 by Pearson Education, Inc. Upper Saddle River, New Jersey 07458 All rights reserved 3 Criminology: A Sociological Understanding, 5/e Steven E. Barkan –Factories with inhumane working conditions –Sherman Antitrust Act (1890) prohibited restraint of trade that raised consumer prices –Early 1900s, muckrakers criticized business/ political corruption, and condemned cruel treatment of workers White-Collar Crime

5. Copyright © 2012, 2009, 2006, 2001, 1997 by Pearson Education, Inc. Upper Saddle River, New Jersey 07458 All rights reserved 4 Criminology: A Sociological Understanding, 5/e Steven E. Barkan Edwin Sutherland –Sutherland coined term white-collar crime –In 1940s Studied 70 largest U.S. manufacturing, mining, retail corporations found numerous law violations –Questioned assumption crime is due to poverty White-Collar Crime

6. Copyright © 2012, 2009, 2006, 2001, 1997 by Pearson Education, Inc. Upper Saddle River, New Jersey 07458 All rights reserved 5 Criminology: A Sociological Understanding, 5/e Steven E. Barkan White-Collar Crime Definition: “A crime committed by a person of respectability and high social status in the course of his occupation” –Contemporary Views  Other terms used – elite deviance, respectable crime, upper world crime

7. Copyright © 2012, 2009, 2006, 2001, 1997 by Pearson Education, Inc. Upper Saddle River, New Jersey 07458 All rights reserved 6 Criminology: A Sociological Understanding, 5/e Steven E. Barkan Clinard and Quinney – two types of white collar crime –Occupational crime: Committed by individual in the course of their occupation for personal gain –Corporate crime: Crimes committed by corporation for financial gain Organizational crime: Crime can be done by and on behalf of organizations (some corp., some small businesses) White-Collar Crime

8. Copyright © 2012, 2009, 2006, 2001, 1997 by Pearson Education, Inc. Upper Saddle River, New Jersey 07458 All rights reserved 7 Criminology: A Sociological Understanding, 5/e Steven E. Barkan Occupational Crime Lawbreaking for Personal Gain –Employee Theft: Pilferage and Embezzlement  About three-fourths of all workers are thought to steal from employers  Pilferage: Theft of merchandise, tools, etc.  Common reasons: dissatisfaction with pay, working conditions, poor treatment by supervisors  Another reason may be workplace culture  Embezzlement: Theft of cash and misuse of funds  Collective embezzlement in the Savings and Loan Industry

9. Copyright © 2012, 2009, 2006, 2001, 1997 by Pearson Education, Inc. Upper Saddle River, New Jersey 07458 All rights reserved 8 Criminology: A Sociological Understanding, 5/e Steven E. Barkan Professional Fraud Focus on Healthcare –Estimated annual cost $100 billion –Unnecessary surgery –Professional fraud  Unnecessary surgery  Financial fraud

10. Copyright © 2012, 2009, 2006, 2001, 1997 by Pearson Education, Inc. Upper Saddle River, New Jersey 07458 All rights reserved 9 Criminology: A Sociological Understanding, 5/e Steven E. Barkan Health Care Fraud Exaggerating charges Billing for services not rendered for real patient Billing for fictitious or dead patients Pingponging Providing inferior products to patients Inflating charges for ambulance services Paying kickbacks/bribes for referrals of patients Falsifying medical records Billing for inferior products or items never provided Falsifying prescriptions

11. Copyright © 2012, 2009, 2006, 2001, 1997 by Pearson Education, Inc. Upper Saddle River, New Jersey 07458 All rights reserved 10 Criminology: A Sociological Understanding, 5/e Steven E. Barkan Organizational Criminality Primary intent of criminal behavior is to benefit the organization –Auto-repair fraud  Costs more than $20 billion annually  Accounts for 30 to 40% of all auto repair expenses –Illegitimate businesses  Phony home improvement businesses, contests, and charities

12. Copyright © 2012, 2009, 2006, 2001, 1997 by Pearson Education, Inc. Upper Saddle River, New Jersey 07458 All rights reserved 11 Criminology: A Sociological Understanding, 5/e Steven E. Barkan Corporate Financial Crime Fraud, cheating, bribery, and other corruption –Fraud and corruption performed primarily for the corporation’s benefit, not for the benefit of the corporate executives engaging in these crimes  Ponzi scheme: New investments are used to pay the interest on old investments  Price fixing: Conspiracy to set high prices  Restraint of trade: One company buys out all others to reduce competition  False advertising: Making exaggerated claims

13. Copyright © 2012, 2009, 2006, 2001, 1997 by Pearson Education, Inc. Upper Saddle River, New Jersey 07458 All rights reserved 12 Criminology: A Sociological Understanding, 5/e Steven E. Barkan Corporate Violence Threats to Health and Safety –Workers and Unsafe Workplaces (i.e. exposure to toxic substances)  Estimates of Problem: not exact, but around 5,700 deaths each year  Examples of Problems  Farm workers exposed to dangerous pesticides  Mining companies’ failure to observe safety code

14. Copyright © 2012, 2009, 2006, 2001, 1997 by Pearson Education, Inc. Upper Saddle River, New Jersey 07458 All rights reserved 13 Criminology: A Sociological Understanding, 5/e Steven E. Barkan Consumers and Unsafe Products –The Automobile Industry  Toyota and Ford –The Pharmaceutical Industry  Knowingly marketing dangerous drugs –The Food Industry  Distribution of contaminated food Corporate Crime

15. Copyright © 2012, 2009, 2006, 2001, 1997 by Pearson Education, Inc. Upper Saddle River, New Jersey 07458 All rights reserved 14 Criminology: A Sociological Understanding, 5/e Steven E. Barkan The Public and Environmental Pollution Much of pollution is preventable Weak laws Lax federal monitoring Minimal penalties Consequences are illness, death, disease Dumping toxic waste

16. Copyright © 2012, 2009, 2006, 2001, 1997 by Pearson Education, Inc. Upper Saddle River, New Jersey 07458 All rights reserved 15 Criminology: A Sociological Understanding, 5/e Steven E. Barkan The Economic and Human Costs of White-Collar Crime Estimates for property crime/street crime at $18 billion –The total cost of white-collar crime reaches over $564.5 billion annually UCR estimates that far more deaths are caused every year from white-collar crime (about 109,800 people per year) in comparison with homicide.

17. Copyright © 2012, 2009, 2006, 2001, 1997 by Pearson Education, Inc. Upper Saddle River, New Jersey 07458 All rights reserved 16 Criminology: A Sociological Understanding, 5/e Steven E. Barkan Explaining White-Collar Crime Similarities with Street Crime –Both steal and commit violence –Break the law when opportunity and motivation present –Both use techniques of neutralization –Both are outcomes of social structure

18. Copyright © 2012, 2009, 2006, 2001, 1997 by Pearson Education, Inc. Upper Saddle River, New Jersey 07458 All rights reserved 17 Criminology: A Sociological Understanding, 5/e Steven E. Barkan Differences from Street Crime –Street criminals argued to have biological and psychological abnormalities –Cannot blame social disorganization for white- collar crime Cultural and Social Bases for White-Collar Crime –Consider combination of structural and cultural forces –Differential association –Greed Explaining White-Collar Crime

19. Copyright © 2012, 2009, 2006, 2001, 1997 by Pearson Education, Inc. Upper Saddle River, New Jersey 07458 All rights reserved 18 Criminology: A Sociological Understanding, 5/e Steven E. Barkan Lenient Treatment –Weak or Absent Regulations –Difficulty Proving Corporate Crime –Weak Punishment; imprisonment has little impact on corporate criminals –Lack of News Media Coverage Explaining White-Collar Crime

20. Copyright © 2012, 2009, 2006, 2001, 1997 by Pearson Education, Inc. Upper Saddle River, New Jersey 07458 All rights reserved 19 Criminology: A Sociological Understanding, 5/e Steven E. Barkan Reducing White-Collar Crime Regulatory agencies need larger budgets Media focus more attention More severe punishments Self-regulation and compliance strategies emphasizing informal sanctions (i.e. negative publicity campaigns)

21. Copyright © 2012, 2009, 2006, 2001, 1997 by Pearson Education, Inc. Upper Saddle River, New Jersey 07458 All rights reserved 20 Criminology: A Sociological Understanding, 5/e Steven E. Barkan Organized Crime History of Organized Crime –Earliest example is piracy –Piracy faded in 1720s; merchants realized greater profits by trading with England –Began in New York City in early 1800s –Development of gangs involved in vice crimes –Immigrants turned to organized crime to make ends meet

22. Copyright © 2012, 2009, 2006, 2001, 1997 by Pearson Education, Inc. Upper Saddle River, New Jersey 07458 All rights reserved 21 Criminology: A Sociological Understanding, 5/e Steven E. Barkan History of Organized Crime –Robber barons role models for gangs and forerunners of organized crime –Robber baron analogy indicates organized and corporate crime more similar than we think –Organized crime’s power increased during Prohibition –After Prohibition gambling was primary source of income for several decades

23. Copyright © 2012, 2009, 2006, 2001, 1997 by Pearson Education, Inc. Upper Saddle River, New Jersey 07458 All rights reserved 22 Criminology: A Sociological Understanding, 5/e Steven E. Barkan The Alien Conspiracy Model and Myth –Is organized crime controlled by highly organized, hierarchical group? –Aka the “Mafia mystique” –Myth because model ignores history of organized crime before Italian immigration Organized Crime

24. Copyright © 2012, 2009, 2006, 2001, 1997 by Pearson Education, Inc. Upper Saddle River, New Jersey 07458 All rights reserved 23 Criminology: A Sociological Understanding, 5/e Steven E. Barkan Controlling Organized Crime As long as public demand for illicit goods and services exist, organized crime will also; thus, we must reduce public demand Legalizing these crimes? Provide alternative economic opportunities for young become who become involved in it each year

25. Copyright © 2012, 2009, 2006, 2001, 1997 by Pearson Education, Inc. Upper Saddle River, New Jersey 07458 All rights reserved 24 Criminology: A Sociological Understanding, 5/e Steven E. Barkan RICO Racketeer Influenced and Corrupt Organization Act Allows prosecutors to bring additional charges against people engaged in 2 or more acts prohibited by 24 existing federal and 8 state laws Features monetary penalties that allow confiscation of all profits from criminal activities Intended for use against organized criminals; also used against white-collar offenders