Category: Society

Types Of White Collar Crime In The United States

White collar crimes are generally committed by businesses and government professionals. There are a lot of examples of white collar crime dealing with high status officials. For example, Felicity Huffman was apart of a college admission scandal where she illegally used money as a motivator to allow her daughter to get into USC. Felicity Huffman is a well known actress and has had a great career in acting; however she thought by paying off the school would be sufficient enough to put her daughter up ahead of everyone else that earns their way to that school. This is just one example of where the rich and powerful get their way and in the end, the sentencing for their crimes are generally not that long. I tend to go deeper and expand on many celebrities and show why they get off so easily, and what possibly things we can do as a society to have an equal punishment, regardless of wealth. Crimes are one of the many things that all humans have in common. If it is a serious crime or not, if you commit a crime you are subjected to jail time. There are two types of crime: They are white collar crimes and street crimes. White collar crimes are mostly nonviolent crimes committed by a high social status where their company commits crimes such as fraud, embezzlement, money laundering etc. On the other hand, street crimes can be any criminal offense in a public place, which can be robbery or burglary. There are many barriers proving the acceptability of one over the other. Lack of awareness, lack of education, and social class make white-collar crimes more acceptable to our society.

According to FBI.org from an unknown author in the article, “White Collar Crime,” explores the many characteristics about white collar crime and the negatives it brings along to society. The term “white-collar crime is now synonymous with the full range of frauds committed by business and government professionals” (FBI.org). Most of these crimes are to avoid or obtain money, property or any advantages to business with the intent of embezzlement, fraud, money laundering, and tax evasion.

Embezzlement is one form of white collar crime that happens in closed doors, where no one can actually see the crime being committed. Embezzlement involves the taking of money from someone or organization for personal gain. The most common example is siphoning money into personal accounts as an employee (FinderLaw’s team) or lawyers/investment advisors improperly using client funds. One of the biggest cases in America from embezzlement comes from a man named Robert Vesco. Besides embezzling over 200 millions dollars, he ended up escaping capture by running away to cuba where there is no extradition laws (john L. Calcagni III). I believe our system is corrupt, the fact that he lived out his life with the money he stole and with no punishment on him is observed. Because of cultural and political differences, countries sometimes do not abide by the extradition contracts agreed upon; as a result, letting hundreds of people get away with their crimes.

Another common white collar crime committed in America is tax evasion. Tax evasion in pretty much what it sounds like, people trying to avoid paying taxes. Certain types of ways this can be done is by falsifying tax forms or illegally transferring property to avoid taxes on that property (Finderlaw’s team). One company that technically gets away with this in, in my opinion, is amazon. In 2018 alone Amazon paid zero dollars in taxes. How? Amazon has spent tens of millions of dollars into research and development over the years, and qualified for tax credits. In 2018 amazon had over 1.4 billion dollars in tax credits. President Trump signed a bill for the reduction of taxes, which amazon used to their advantage. And lastly reinvesting revenue. Over the years amazon was reinvesting in itself and didn’t even make a profit, which carried forward losses to right off on future tax bills. Which in 2018 those carried forward losses amounted up to 600 million dollars (CNBC).

Notably the most iconic person ever to go down in history as the most iconic fraudulent case would be the case of Jordan Belfort. Jordan Belfort, aka The Wolf of Wall Street, taken more than 1,500 individual investors out of $200 million. He was eventually sentenced to four years in prison and ordered to pay a fine of $110.4 million for money laundering, fraud, and drug use. And of course the sentence was later reduced to 2 years (Crime museum). And by becoming The Wolf of Wall Street and making several autobiographies, he began to get notoriety and publicity, expanding his wallet after prison. Celebrities and high paying government officials tend to have a lot more benefits when it comes to the court system, and the system we live in general. The first example of this is being easily bailed out. For obvious reasons, the wealth they have collected.

They can be arrested and bailed out the same exact day to await their trial in comfort. To me this could make it hard for them to understand in full their mistakes they have committed. A lot of the times they do not understand the full consequences of their actions and go on being repeat offenders. An example of this would be Lindsey Lohan by habitually breaking probation but has had no consequences due to her status on money. A normal person who breaks probation will always go back to jail or prison. All of these benefits deal with the fact that they have money, money talks in this country. Which leads to my last benefit for being rich in the court system. If you have money, you will be in very good hands with one of the best defenders in the country. This to me is the biggest reason to why they get off so easily. Persuasion and great knowledge of the law allows them to bend the law to make it sound right (CareerRide.com).

Felicity Huffman pleaded guilty to fraud conspiracy in the college admissions bribery scandal; paying $15,000 to help her daughter get a fake SAT score. As a result, she was sentenced to 14 days in jail and will also have to pay a fine of $30,000 dollars and perform 250 hours of community service (NBCnews.com). To put it into perspective, the maximum sentencing for this type of crime is 20 years. I believe that her status and the money that plays into her donations plays a huge factor on her amount of time in prison. If she did not have as much of a well known face, she would have had a much longer sentencing and a larger fine to pay. To be fair, with the money she earned, she did have a great defense attorney. This can make or break your case. And this is another factor for celebrities with lots of money, they can afford the best defenders in America. Is that fair? I do not necessarily think it’s fair for those who don’t have the money for a defender who can manipulate the law, but she can afford it with the money she earned. This is the biggest reason why her sentencing is so much lower than what it could have been.

One example of a case that did not see justice, and also has a lot of conspiracy over it, is the Epstein case. Epstien was charged with sex trafficking after finding lewd photos of girls in his manhatton mansion. One of the richest men in the world, could possibly never see the light of day again. And after allegations being settled in 2008, this is brought back up again with other major political ties to his private Island where he conducted his sex trafficing. I bring this up because with his high status, he had it much easier in prison as he awaited for trial. Usually in these cases they tend to be on suicide watch and have gaurds watchign 24/7. However, for some reason he was decalred okay to be off suicide watch and had no guards watching him for a certain period of time. And in result, he commits suicide in his prison sell. There is no sufficient evidence to justify what exactly happened to him and why there was no security around him, but money talks. I personally feel that this is a huge blow to the people who suffered from his actions because he never had to face his crimes in front of the world. He “bought” his way out the easy way.

How can we as a society stop or deter white collar crimes? According to Jed Rackoff, a senior judge on the bench of the United States District Court for the Southern District of New York, states that “Big fines paid by businesses that break the law provides no incentive for companies to change cultures that lead to that illegal activity” (Bill Synder, Stanford Business).

Which would make complete sense due to the fact that big businesses have big money. Paying fines for their crimes is just another way for them to just nudge it off and keep doing those crimes. They see it as what is costs to do business rather than a penalty, not seeing business the right way and changing the culture around it. According to Judge Rakoff, the fear of imprisonment is a strong motivator for big businesses to stop or deter white collar crime. “I found that to a person, [executives accused of white-collar crimes] feared prison, and they feared it mightily. They would have paid any amount of money, done anything to avoid going to prison. So prison does have a major deterrent effect…”(Rakoff). White collar criminals seem to fear prison and will do anything to not go, in this case is paying fines. But i want to see penalties meeting the crimes they committed rather than paying fines. Because if they keep on doing these crimes and paying off what they owe from that crime, then they will truly never learn from their mistakes.

Whether or not this is classified as a white collar crime, the subject of President Donald J. Trump is a huge news media coverage dealing with his impeachment process. The “witch hunt” the President is referring to is the act of the House calling for impeachment of him for abuse of power and obstruction of congress (CNN). in a broad spectrum i believe this can be classified as a white collar crime if you consider the president as a high official who conducted (possibly) in behind the scene crimes for political and financial gain. If convicted of these crimes and impeached, this could go down in history as one of the biggest white collar crime cases ever committed.

Law should not be skewed to the rich and implicated more harshly to common people. Celebrities, government officials, politicians,etc do not get more rights than common people. The law is meant to keep peace and check the misuse of power. Even if celebrities get away easily with crime, it should be condemned by people. If they have committed a crime then they should be convicted as harshly or lightly as other people with the same crime committed. In conclusion, white collar crime happens in closed doors. We cannot see or hear it but the people who do eventually get sentenced for white collar crimes get off easier than those of regular crimes. Maybe the act of robbing a bank and being physically there is more aligned to a harsher sentence than someone embezzling, money laundering and creating fraud behind the scenes with no physical theft. I rather see the theft portion treated the same or even harsher than small robbery crimes. We need to change the way we view white collar crimes, because a simple fine would not stop them from doing it again. It has been shown that the biggest fear to those people is imprisonment. We should lock down on that idea and imprison more harshly to those who commit these white collar crimes.

Economic Crimes & White-Collar Crime, Blue Collar Crime. Impact On Business, Economy And People

In all of American history as far back as we have recorded, crime has been prevalent. It has taken place nearly everywhere. There are no exceptions. As technology advances and corporations grow, new crimes begin to surface that not only impact people, but businesses and the economy as well. Economic crimes as well as white collar crime and blue collar crimes continue to impact our society and structures of life in many different ways and are displayed throughout our everyday lives.

So, what exactly is white collar crime in the first place? White collar crime is, “the full range of frauds committed by business and government professionals. These crimes are characterized by deceit, concealment, or violation of trust and are not dependent on the application or threat of physical force or violence” (FBI.gov) Like every crime, there is usually a contemporary motive. The motive that usually resonates itself with white collar crime is financially based. These criminals wish to obtain or avoid losing money, property, or services or to secure a personal or business advantage. These crimes are usually labeled as fraud, identity theft, money laundering, exploitation and embezzlement. As technology continues to advance, white collar crimes become more sophisticated. These scams that are orchestrated can destroy whole companies as well as families and major investors. An example of white collar crime displaying this destruction is the Bernie Madoff Ponzi scheme. This case involved the former chairman of NASDAQ. Madoff managed to build a multi-billion dollar investment firm with false trading reports. It had appeared he had a business making billions, when in fact he was in a major embezzlement and the firm was in major debt, but stocks showed otherwise. Although he had been suspected of being fraudulent before, it wasn’t until 2008 that he was arrested after his corruption was reported by one of his sons. In 2009, he was sentenced to 150 years in prison and $170 billion in restitution. Due to this major scam, investors lost billions of dollars, and three people involved with the business committed suicide. This shows that white collar crime really can affect more than just the person who’s committing the crime. It tears investors lives apart because they’re essentially putting money into a broke company and evidently makes the investors broke. It hits the economy extremely hard as well, because once the business truly goes under, the stock market then takes a major hit. This then effects families because if the economy isn’t performing well, prices rise, unemployment rises and families cannot support themselves.

While white collar crime is involved with fraud, there is another criminal activity known as blue collar crime that reflects on the opposite. Blue collar crime is any crime committed by an individual from a lower social class as opposed to white-collar crime which is associated with crime committed by someone of a higher level social class. Blue collar crime has no definite legal classification because it holds to a specific group of crimes. Although blue collar crime is on a smaller scale, it still affects the economy, families and investors just as white collar crime does. Some crimes that are known as blue collar crime are labeled as drug production or distribution, sexual assault, theft, burglary, assault or murder. Blue collar crimes are significantly more common than white collar crimes. Impoverished or lower class people are typically the ones committing to these crimes. There are many aspects as to why these people commit these crimes, but many theorize that it has to do with low income, psychological problems, the broken windows theory or emotional issues. Blue collar crime doesn’t affect businesses or economy as much as white collar crime does, but it does affect families a great deal. Blue collar crime doesn’t affect businesses and the economy as much as other crimes because these crimes simply aren’t involved with business practices or the stock market. Blue collar crime is involved with small scale operations and tend to be located within the lives of lower income individuals. While these crimes don’t affect the economy as much, they do affect families. These crimes affect families, because the crimes can take the lives of many people living in families whether it be through murder, drugs burglary or sexual assault. These crimes are traumatizing and are on a much more common scale than white collar crime because there are a lot more people in lower classes than very high classes in our country.

Finally, the last type of crime regarding businesses, the economy and families is known as economic crimes. Economic crimes are the most similar to white collar crimes because they are more focused on money and the upper class are the ones committing these crimes. Economic crimes are simply defined as corruption. The corruption occurs within the economy and is mainly associated with finance. Economic crimes are also mainly called financial crimes because of their association with money. Economic crimes are opinionated to be some of the most dangerous crimes. They are believed to be some of the most dangerous crimes because they not only affect the upper class, but all people involved in the workforce, real estate, stock market and much more. The country can take a major hit and put itself into even more debt due to stupidity. One example of a major economic crime is when the HealthSouth founder ordered to pay nearly $2.9 billion to shareholders because of a massive accounting deceit that nearly bankrupt the rehabilitation chain. Scrushy was sentenced to 6 years and 10 months from a separate case for bribing his governor from Alabama. His mansions, luxury cars and boats are being auctioned off to pay the his massive fine. Corruption like this takes away money from hard working class families and major business as well. Crimes like this always tend to exist in our society and will always continue the trend of impacting our economy, businesses and families.

The term ponzi scheme is a widely known fraudulent scam where investors are promised a large sum of profit if investments are made without much risk. The term ponzi scheme came from the person known as Charles Ponzi. Charles Ponzi, an Italian college dropout, born in Lugo, Italy, came to the United States at age 21 in the 1920s and committed multiple schemes that are considered fraudulent. In the early 1900s, people would use International Reply Coupons which were a method of used by people in order to send postage to each other in different countries. He realized that due to post-war exchange rates from World War I, International Reply coupons are worth alot more in the United States than any other country, especially Europe, resulting in his most notorious Ponzi scheme. He was known for being a very charismatic talker and promised investors will make a 100% profit in 90 days by giving him start-up money, which was completely false. The money he used was for buying International Postal Reply Coupons and redeeming them in the United States which would lead him to a richer and more successful life.

Charles Ponzi would be involved in other schemes, such as using funds from his new investors in order to pay off his old investors. The Postal Offices in the United States started becoming more and more skeptical of Charles Ponzi as he gained more investors and notoriety. An investigation was made to see whether or not he is making a profit off the International Postal Reply Coupons, but not enough sales were made to prove if that was the case. Postal inspectors knew he was most definitely doing something illegal with knowledge that he is convincing his victims by mail, but they cannot arrest for committing fraudulent acts because nobody has complained about being scammed.

Ensuing the investigation, many newspaper articles were published with headers which questioned Charles Ponzi’s actions. Ponzi wished to refute his negative public outlook by having a meeting with the local, state, and federal authorities. The authorities heavily recommended Ponzi to audit his books, Ponzi agreed and began to stop taking investments in order to make the auditing easier. Although he wanted to make his reputation better, it actually has worsened. The day after the meeting, swarms of infuriated investors stormed his office and demanded their money back due to fear of Ponzi possibly running away with their cash.

The downfall of Charles Ponzi has just begun, he attempted to repay his a few of his investors back and tried to comfort the ones who he hasn’t paid back yet. Numerous investors started to retract their investments, causing extreme financial loss for Charles Ponzi. It wasn’t until August 9th, Joseph Allen, the Massachusetts Bank Commissioner, demanded the private bank, Hanover Bank Company, to no longer fulfill Ponzi’s checks. Three investors of Ponzi’s have created a petition in court to officially consider Charles Ponzi as bankrupt. Still unable to pay these investors back, Charles Ponzi was charged with mail fraud, but released on a $25,000 bail, he was later arrested again for larceny. The public feared due to these releases, Charles Ponzi might escape the United States and seek freedom from his fraudulent crimes. Later on, Ponzi was federally indicted and charged with 86 counts of mail fraud, intended to face a lifetime in prison. Instead he was charged with a single count and was sentenced to five years in federal prison. He was released 2 and a half years early and was once again indicted for larceny.

After multiple trials regarding his larceny, he was proven guilty on his third State trial and continued to receive requests to invest with Ponzi and Christmas cards in his jail cell. He was sentenced seven to nine years in 1925. When Charles Ponzi was free on bail, he moved to Jacksonville, Florida where he promised investors small amounts of land and a 200% profit in 60 days, which yet was another fraudulent scam. Ponzo was again indicted in Florida, in 1926 and sentenced for a year in Florida State Prison. Ponzi reversed his conviction and was freed by paying a $1500 bond, shaved his head and grew facial hair and moved to Tampa, Florida. While disguising himself, he tried getting on a merchant crew ship, on its way to Italy, in an attempt of escaping the United States.

Unfortunately, he wasn’t successful and was caught in New Orleans, where he was sent back to Massachusetts to finish his prison sentence, spending another seven years. In 1934, Charles Ponzi was released, but as soon as he was released, an order was made to deport him to Italy, eventually leading to his deportation on October 7th of 1934. He attempted to continue his fraudulent schemes in Italy, but weren’t successful. During World War II, Ponzi found a job in a Brazilian airline which he worked for some time. Unfortunately, the airline went out of business as the war went on. Charles Ponzi spent the rest of his days in misery and poverty, until Charles Ponzi’s death in Rio de Janeiro, Brazil on January 15, 1949. Although Charles Ponzi may be no longer living, the term Ponzi scheme lives on as the definition of a well orchestrated financial scam.

Economic crimes is a growing issue in today’s society. Many individuals are accused and sentenced by the federal government. Throughout the years there has been many businesses and individuals that have committed economic crimes. These crimes range from money laundering to selling fake stocks, and even printing fake money. Nowadays there many groups monitoring and preventing economic crimes. From the SEC monitoring the stock market to the secret service removing conterfits from our economy. One of the most well known accused of economic crimes was Jordan Belfort. Jordan belfort was accused and charged with money laundering and securities fraud. Money laundering is the crime of transforming money which you illegally obtained into legitimate assets through a business. Securities fraud also known as stock fraud is a practice used by stockbrokers to persuade a investor into buying stocks through false information. Investors are later to believe that the investment they made lost money when really it made money and the stockbroker pockets the money the believe they lost. These are examples of economic crimes.

Before Jordan Belfort began is period of securities fraud he was a meat salesman which eventually failed. He got entered the stockbroker business through a family friend. He started as a trainee at L.F Rothschild which we would eventually be fired due to the black monday crash of 1987. After being fired from L.F Rothschild Jordan Belfort founded Stratton Oakmont through Stratton Securities that mainly focused on penny stocks. Jordan Belfort stole from his investors through the pump and dump method of stock sales. The pump and dump method a form of securities fraud is illegally increasing the price of a stock that is owned through false statements so the stockbroker could sell the cheaply purchased stocked at a higher price. Then the stockbroker will dump sell their shares so the price falls and investors lose their money.

Jordan Belfort was extremely successful with this method. Stratton Oakmont was continued growing and at its peak once employed one thousand stockbrokers and had issued stock totalling over one billion dollars. Jordan Belfort made it easy for law enforcement to catch on what he was doing. He was living a lifestyle of drugs and parties which lead to his downfall. Ever since Jordan Belfort founded Stratton Oakmont they were always monitored by National Association of Securities Dealers. They are a non government organization who regulates, and enforces operation of the new york stock exchanged. They mainly regulate brokerage firms and exchange markets. The main enforcer in securities that is supported by the government is the Security and Exchange Commision (SEC). The SEC hold many responsibilities such as creating new laws for the economy, enforcing the laws, and regulating the United States stocks and exchange. The SEC monitors financials reports for large companies to make sure they are not committing any illegal law they have created. The SEC was created in 1934 in order to prevent the possibility of economic crash to occur.

With the National Association of Securities Dealer catching up what he was doing it was only a matter of time until they found out. In December 1996, the Nation Association of Securities Dealers expelled Stratton Oakmont from dealing in the stock market putting it out of business. Soon enough the Federal Bureau of Investigation soon looked into what Stratton Oakmont was doing and pressed charges on Jordan Belfort for money laundering and securities fraud. Through interviewing former employees from Stratton Oakmont and wiretapping Jordan Belfort years of partying, drugs, and stealing from investors have all come to a end. In 1999, Jordan Belfort was indicted for his crimes. He was sentenced to four years in prison. Jordan Belfort only served twenty-two months in prison in exchange of a plea deal with the the Federal Bureau of Investigation. For the scam he ran the led investors to lose close to two hundred million dollars. Jordan Belfort was ordered to pay one hundred and ten million dollars to those he stole. Jordan Belfort was required to pay 1,513 clients by 2009.

Jordan Belfort was just a meat salesman before he founded a brokerage firm that issued stocks totaling more than one billion dollars. From 1989 to 1996 Jordan Belfort was able to scam investors and obtain two hundred million dollars. Jordan Belfort left a model for the SEC to follow so no one could ever do this again. Popular in today cultures movies of Jordan Belfort crimes are told shown in The Wolf of Wall Street. Today he is a motivational speaker talking about his successes and his failures to others teaching them the wrongs. After the end of Stratton Oakmont the SEC heavily monitors the stock market and businesses to prevent money laundering and security fraud like this from ever happening again. The trial of Jordan Belfort shows the precaution the United States takes to prevent economic crimes from happening as billions of dollars flow from it. From its government funded organization the Securities and Commision Exchange to its non government funded organization the National Association of Securities Dealers there are plenty of eyes looking at our economy. The Jordan Belfort founded Stratton Oakmont brokerage firm showed a great example of how a economic crime occurred through securities fraud and showed who are those responsible in enforcing these laws to prevent it from happening.

Throughout United States history white collar crimes, blue collar crimes, and economic crimes have affected our nation. Starting from Charles Ponzi crimes in the 1920s to Jordan Belfort crimes in the early 1990s and finally to Bernie Madoff billion dollar scheme which is known as the biggest economic crime. It is very important to secure the investments, and finances of our nation. Without it being secured it could collapse businesses, ruin our stock market and ruin families. We learn from these crimes occuring and we grow stronger and smarter in stopping it from ever happening again. As a nation we have many divisions to help prevent the crimes of our finances. With the SEC it ensures that our stock market will always be monitored. With obtaining financial statements they make sure all the money is going to the right place. It creates rules and regulations to help prevent and business or individual from ever committing a white collar, blue collar, or economic crime. Our nation is the best in fighting these crimes and will continue to grow for the future.

Works Cited

1. Dunn, Donald. Ponzi, The Incredible True Story of the King of Financial Cons. Broadway Books, 2004
2. “10 White Collar Crime Cases That Made Headlines.” Criminal Justice USA, 12 Oct. 2012, www.criminaljusticeusa.com/blog/2011/10-white-collar-crime-cases-that-made-headlines
3. Delevingne, Lawrence. “The Decade’s 10 Biggest Financial Crimes.” Business Insider, Business Insider, 21 Dec. 2009, www.businessinsider.com/the-decades-10-biggest-financial-crimes-2009-12.
4. “White-Collar Crime.” FBI, FBI, 3 May 2016, www.fbi.gov/investigate/white-collar-crime.
5. “White-Collar Crime.” Study.com, Study.com, study.com/academy/lesson/blue-collar-crime-definition-statistics-examples.html.
6. Zuckoff, Mitchell. Ponzi’s Scheme: The True Story of a Financial Legend. Random House, 2006
7. Belfort, Jordan, and Stephen Galloway. “Real-Life ‘Wolf of Wall Street’: ‘It Was Awful What I Did, But I Was on Massive Amounts of Drugs’.” The Hollywood Reporter, 27 Feb. 2014, www.hollywoodreporter.com/news/wolf-wall-street-jordan-belfort-682968.
8. Gray, Geoffrey. “The Wolf of Wall Street Can’t Sleep.” NYMag.com, nymag.com/news/features/jordan-belfort-2013-12/.

The Effects Of Bill C-74 On White Collar Crime

Bill C-74, the omnibus budget implementation bill, contains provisions that propose to amend the Criminal Code to add a new system of remediation that can be triggered prior to a trial for corporations accused of offences such as bribery of public officials, frauds on government, municipal corruption, prohibited insider trading or false prospectus. The bill includes provisions that deal with how white-collar crime that takes place in the jurisdiction of Canadian courts is prosecuted and proposes a system of remediation that can ensure that corporate offenders avoid conviction if they co-operate with the Crown and the courts.

Opposition MPs in the House of Commons have likened the proposed changes to being “soft” on white-collar crime as it allows corporations to “avoid jail time,” but lawyers in the field dispute that assertion. Lawyers say the proposed changes could promote good corporate citizenship and bring Canada into line with other jurisdictions. The proposals in the bill, which is still before the House of Commons, would apply to any organization or corporation — except for public bodies, trade unions and municipalities — that is being prosecuted in Canada under the Criminal Code or the Corruption of Foreign Public Officials Act.

Danielle Royal, partner with Stikeman Elliott LLP in Toronto says the bill could help in situations where the corporate misfeasance was years ago and current shareholders are being punished for something that happened before their time. Brian Weingarten, a sole practitioner in Toronto, says this process accelerates restitution to victims in cases where it’s applicable. He says the major difference is that this ensures that trial and conviction can be avoided, which may be advantageous to companies, not only saving the resources of a trial but avoiding triggering other anti-corruption legislation.

Falling stock prices, jail time and public embarrassment of powerful leaders are a common occurrence in world news today. Corporations funding political campaigns and shareholder involvement at state and federal level have been on a steady increase over time to try and minimize the amount of damage large white collar crime scandals can cause to a business entity. Bill C-74 is another example of the powerful creating rules and regulations to benefit their own agenda. This trend is described by the conflict perspective proposed by Karl Marx, noticing the influence of power distribution on social change. Large corporations are taking advantage of political opportunities for personal gain with campaign funding and other various supports. Bill C-74 removes the ability of dominant corporations to receive jail time, and lose reputations making rewards greater than risks, allowing justifications of white collar crime to become more probable. Using theories like rational choice, routine activities and differential association will provide useful insight on why this bill will increase white collar crime rates. In this paper, I argue that passing bill C-74 will increase the prevalence of white collar crime because it removes the deterrence of committing crime, encourages others to adopt criminal practice, and creates a norm of using deviance to achieve success, that will be taught to future generations.

Prior to any significant decision being made corporations weigh out the costs and benefits of the choice they are about to make. Important choices like investing, expanding and other major decisions that impact the whole company are well thought out and calculated. When a company is faced with a choice for example to spend money on clean disposal of products or receive criminal charges for illegally dumping toxins, they are analyzing the costs and the benefits of each choice. Laws are in place for the purpose of creating this consequence for wrongful acts. These consequences must be carried out for the corporation and other onlookers to learn and not commit crime, for their own benefit and the benefit of the communities in which they operate. Bill C-74 will remove the consequences put in place to deter corporations from choosing the often cheaper yet less safe option.

Hooker Chemical Company was faced with such a decision and chose wrong, disposing toxic chemicals into a river then selling that land to the cities school board creating a medical emergency for the city’s population. This ended up causing many deaths and birth defects in newborns (Valentine 2019). This instance is an example of a corporations analyzing personal and situation factors, components of rational choice theory, and determining that the costs of getting caught do not outweigh the benefits of their wrong doings for their business.

The example of Hooker Chemical Company is one of many that can be explained by the theory of rational choice. Rational choice theory is when people calculate the expected consequences of their options and choose the one they believe serves them best (Hechter and Kanazawa 1997). Eliminating the possibility of imprisonment removes fear of punishment, increasing the potential gains from white collar crime in the cost benefit analysis (Schmideberg 1968). The laws and consequences for corporations breaking them are already arguably not strict enough to deter corporate giants from manipulation the judicial system in their favors with their large influence and resources, however making the system even more open to self-regulation will only increase the amount of white collar crime in our society. Bill C-74 removes some deterrence of committing a crime, creating an environment where the costs do not outweigh the benefits, increasing the prevalence of white collar crime, so cases like the crisis in Niagara Falls with the Hooker Chemical Company can increasing occur.

Removing the deterrence of committing crime will increase its prevalence, however that’s not the only affect Bill C-74 has. Passing the bill creates a lack of a capable guardian; a key element of routine activities theory developed by Laurence Cohen and Marcus Felson. The theory states that the likelihood of crime occurring depends on the interaction of 3 things, a fitting target, a lack of capable guardian and a motivated criminal (Tillyer and Eck 2011). For any corporation, society by default becomes the suitable target, and the motivation for increasing profits is constant as well. Allowing the disability of corporations to receive criminal charges by law removes the significant guardianship over crime, increasing its prevalence. Corporations who were once successfully deterred from crime due to these imposed consequences will now have no deterrence towards crime at all.

Enron transitioned from a company chasing the American dream to spiraling out of control. Enron’s demise was due to the lack of suitable guardian, among other things. No government body was able to investigate Enron thoroughly enough to stop their fatal fall before it was too late. This caused society like most times to be the suitable target losing millions of hard earned assets. Their top executives were not deterred by the threat of criminal charges, but others are. White collar crime goes undetected easier than any other type of crime (Valentine 2019). Without the threat of criminal prosecution, and the low probability of being caught only to pay a fine well within the budget of these corporate giants, there is little to discourage these companies from using illegal methods to achieve their goals. Bill C-74 will encourage others who weren’t willing to be deviant due to consequences before, to be deviant now.

With the passing of Bill C-74, white collar crime will inevitably become more prevalent within our society. Due to the lack of capable guardian as previously mentioned, white collar crime will crime will go increasingly undiscovered and insignificantly punished, creating a consensus that criminal methods are the most effective way to make a business successful. As generations flow one to the next white collar crime motivations and techniques will be taught to the future of the business world.

The teaching of criminal activities is a major component of differential association theory proposed by Edwin Sutherland and Donald Cressey. They believe the basis of this theory is that criminal behavior is learned just like any other conventional behavior within social groups (Valentine 2019). Deviants pass on the favorable definitions towards criminality to the generations after them to adopt. Once the habits of criminal behavior to achieve success are formed, reversing them is extremely hard.

The Italian or Russian mafia for example that has been teaching their next in lines how to run business is not even considering to begin teaching an honest, legal way to earn profits. This is due to the fact they have enormous power, profits and success dealing with their business affairs in the way that they do and there is no reason to go back to honest non-violent, legal methods because all they would do is lose money, their prime motivation for keeping the business in the first place. The comparison here is that corporations and the mafia are not structurally that different. Corporations follow the same framework; they have the same bosses in charge of business that dictate the practices the corporation employs and teaches the future bosses how to be just as successful to keep their legacy alive. Allowing corporations to be seemingly above the law, protected from significant punishment and without deterrence from criminal activity allows deviance to become the norm of corporate business practice over time, being taught from generation to generation.

In the Law Times article, it is mentioned that there are two reasons why this bill is a good idea. Reason one being that it addresses the unfairness when you have a large company with one rogue senior officer who has bribed somebody and the whole company takes a hit (Smith 2018). This point is valid however in a large company, structurally they are checks and balances in place for these reasons. One person cannot simply make a choice affecting the whole company without compliance from other parties. Smaller corporations may have this issue, but they also have a much smaller societal reach, while large corporations can affect the lives of millions of people. Almost all of Enron’s executive officers were involved in their fraudulent activities as well as endless amounts of staff, and an entire accounting firm. Companies need to be held accountable for the choices they make. They cannot be allowed to hide from their crimes behind the corporation.

The second reason, was that this bill would promote honesty from other businesses and good corporate citizenship (Smith 2018). In a perfect world good corporate citizenship would come with less regulation, however why does that only apply to corporations? Why not remove criminal charges from all small businesses and people, would this not promote good societal behavior? In this paper examples of Enron and Hooker Chemical Company were used as supporting evidence for theories explaining the increase in prevalence of white collar crime due to Bill C-74; however, they can also be used as examples of times when corporations were given plenty of opportunities to be honest with good corporate citizenship. Hooker Chemical Company had endless chances to tell the truth about the contaminated land, and Enron executives denied all involvements in the collapse of their own company. Jeffrey Skilling, Enron’s CEO has still not admitted to knowing anything even after he has been charged and sentenced.

The article’s reasoning assumes that corporations are the victims in these cases when really, they are the ones causing physical, financial and emotional harm to our society. Corporations that are involved in criminal activity must be held accountable for their actions and their choices.

In this paper, the arguments focus on the increase in prevalence of white collar crime. However ultimately, the discussion necessary to have is, how will this increase impact our society? Power is a social construct provided to the government by public support and further declines in faith of the system are detrimental to social structure (Valentine 2019). Within populations, crime originates from common structures of dominant/subordinate relationships. Allowing the more dominant groups more freedom within legislation creates an increasingly more toxic divide (Williams and Drake 1980). Society relies on the criminal justice system to protect their interests and distribute fair consequences to wrong doers. Constant revisions of regulations forwarding the welfares of large corporations has led to an overall decline in trust (Rudolph, Chanley, and Rahn 2000). In the past, when society as a whole becomes desperate and with nothing to lose, chaos, and social unrest are not far behind.

In conclusion, this paper argues that passing bill C-74 will increase the prevalence of white collar crime because it removes the deterrence of committing crime, encourages others to adopt criminal practice, and creates a norm of using deviance to achieve success, that will be taught to future generations. These are all relatively short term consequences. The more broader discussion of societal affects predicts a more serious effect than just an increase in white collar crime. As the government allows corporate intervention into their political campaigns, they are just fueling our societies anger towards the dominance these corporations have over our lives, and the untouchability of their executives with selfish goals and principles. Like most reform, nothing begins significant change until the people themselves riot and risk everything for the greater good. It is a shame large corporations are not able to do the same and put the fairness of the people that keep their stock in the green before their own selfish interests.

References

1. Chanley, Virginia A., Thomas J. Rudolph and Wendy M. Rahn. 2000. ‘The Origins and Consequences of Public Trust in Government: A Time Series Analysis.’ Public Opinion Quarterly 64(3):239-256
2. Hechter, M., & Kanazawa, S. 1997. “Sociological Rational Choice”. Annual Review of Sociology, 23, 191-214.
3. Schmideberg, Melitta.1968. “Re-evaluating the Concepts of Rehabilitation and Punishment.” International Journal of Offender Therapy and Comparative Criminology 12(1):25-28
4. Smith, Dale. 2018. “Bill Aims to Change Way White-Collar Crime Punished.”
5. Law Times. Retrieved October 3, 2019 (https://www.lawtimesnews.com/practice-areas/crossborder/bill-aims-to-change-way-white-collar-crime-punished/263082).
6. Tillyer, M. S., & Eck, J. E. 2011. Getting a handle on crime: A further extension of routine activities theory. Security Journal, 24(2), 179-193.
7. Williams, Kirk R. and Susan Drake. 1980. ‘Social Structure, Crime and Criminalization: An Empirical Examination of the Conflict Perspective.’ The Sociological Quarterly 21(4):563-575
8. Valentine, Grant. 2019. “Typologies, Theories and Motivations.” SOC208 Crime and Organizations. September 25.
9. Valentine, Grant. 2019. “Introduction to White Collar Crime.” SOC208 Crime and Organizations. October 2.