WHITE-COLLAR CRIME essay
The term “white-collar crime” was first used by criminologist Edwin Sutherland back in 1939 for the various nonviolent crimes usually committed in commercial areas for financial gain (McNISH, 2010). There is a common misconception that the white-collar crimes do not have victims, and thus they are not that dangerous. Indeed, these crimes are committed without the use of weapons or threats of physical violence, but it does not mean that they are really harmless. According to the FBI, in the United States white collar crimes steal more than $ 300 billion a year (Gottschalk, 2011).
All kinds of white collar crime are taking place in our community nowadays. The most wide spread crimes are fraud, fraud with bankruptcies, bribery, computer fraud, credit card fraud, counterfeiting and securities, corporate appropriation of funds, “identity theft” (using other people’s financial documents), securities transactions which use insider information, insurance fraud, “money laundering”, obstruction of justice, perjury, tax evasion, economic espionage, artificial price bubble, etc (Williams, R. (2013).
With the rapid development of Internet technologies, there is a rapid development of Internet fraud schemes. For example, online investment scheme is one of the recent ones. Commission on Securities and Exchange Commission on Law Enforcement, and criminal trials indicate that criminals use two basic methods to manipulate securities markets for personal gain. First, in so-called “pump-and-dump” projects, they usually disseminate false or misleading information in order to cause a sharp rise in stock prices which are not in demand, or shares of companies not having substantial assets and leading operations. Immediately after that they sell their shares of such companies to get substantial profits before the stock price falls back to its normal low level. All other buyers of the stock, unaware of the falsity of the information, become victims of the scheme as soon as the price falls.
For example, in one federal prosecution in Los Angeles, the defendants purchased shares in a bankrupt company NEI Webworld, Inc. for the sum of 130,000 dollars, directly or through an intermediary. Assets of NEI Webworld, Inc. had been liquidated several months before. Then the defendants sent e-mail messages to hundreds of Internet bulletin boards, falsely stating that wireless telecommunications company planned buyout of NEI Webworld. At the time defendants purchased shares of NEI Webworld, share price ranged from 9 to 13 cents apiece. However, one day share price of NEI Webworld rose in 45 minutes from $8 per share to $15.5-16, and half an hour later it fell to 25 cents per share. The defendants made a profit of 362,625 US dollars (Benjamin, 2011).
In another federal case in Los Angeles, a man who worked for California company PairGain Technologies, created a fake website Bloomberg news, which had fake news about the impending PairGain Technologies acquisition by an Israeli company. He sent fraudulent e-mail messages with links to fake Bloomberg news site to financial news bulletins. On that day PairGain Technologies shares rose by about 30% before the company issued its own refuting press release (Wanless, 2010).
At the moment in San Diego, there is a federal prosecution of massive fraud using the Internet and telemarketing to attract potential investors in the so-called “general partnerships” involving investments in “high technology”, such as Internet shopping mall and Internet access providers. The scheme defrauded more than 3,000 victims nationwide for nearly $ 50 million (Miller, 2013).
Corruption, as one of the types of economic crimes, is very common in our society and it slows the development of the country. In the anti-corruption fight it is recommended to implement legislative reform, which would bring not harsher penalties for corruption, but simplification and reduction of state control (reducing the frequency of inspections, tax cuts) in order to reduce the very possibility of abuse official position.
However, legislative actions of the State can not make a decisive breakthrough in the fight against corruption (at least because of the fact that the fight against corruption sometimes is headed by corrupt officials). Decisive success is only possible by increasing the dependence of the state of citizens. This requires such long-term institutional reform as reducing the number and size of authorities, creation of special or even independent of the State institutes authorized to investigate allegations of corruption (for example, Sweden and some other countries have institution of Ombudsman), introduction of ethical standards for authorities, etc. Finally, the fight against corruption is impossible without the help of whistleblowers. In the US, the informant receives from 15% to 30% of identified material damage and he is protected from persecution of violators (Kim, 2012).
Economists say that successful fight against corruption provides immediate benefits that are many times higher than the related expenses. According to some estimates, $1 spent for the fight with corruption brings an average of 23 dollars in the fight against corruption at the level of state and about 250 dollars in the fight at the international level (Brody, 2010).
General recommendations to fight white collar crime in the community include the following actions by the state:
- ensuring political and economic stability in the society
- creating legal framework necessary for effective fight against economic crimes
- improving the system of government agencies dealing with economic crimes
- increasing control of the public authorities for the activities of enterprises, which commit most economic crimes, including the activities of their officers and materially responsible persons
- strengthening preventive, precautionary actions of authorities fighting with economic crimes (in particular, explore conditions that contributed to the commission of crimes and take measures to prevent further similar crimes).
Fighting white-collar crime is one of the main problems of modern society. This struggle must be carried out in all possible ways. Since the damage from such crimes is huge, the end justifies any means. According to the FBI, between 2007 and 2009, white-collar crimes amounted 3.8% of all crimes committed in the United States. Despite their relatively small number, annual average white-collar crime costs victims much more than ordinary theft or robbery. For example, average property crime costs a victim $1.8 thousand, while the average white-collar property crime costs $9.2 thousand. White-collar crimes today account 42% of all crimes committed by using a computer (Akopyan, 2010). Many experts expect the growth of this number. According to National Fraud Center, the number of arrests for white-collar crime, especially fraud and misappropriation of corporate funds, has increased dramatically over the past few years, while the number of arrests for crimes related to violence against the person declines.
White-collar crime is very dangerous. It causes great damage to society and country as a whole and, ultimately, each of us. Today, fight with this type of crime is of utmost importance. State and federal laws, and the US Constitution give the federal government the authority to curb white-collar crimes. A number of federal agencies, including FBI, Tax and the US Secret Service, US Customs Service, Agency for Environmental Protection, deal with white-collar crimes. In addition, most states use their agencies to fight white-collar crime. Penalties for white collar crime are very strict, much more severe than for other crimes (Waldie, 2010).
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