RLG201H5 Study Guide - Midterm Guide: National White Collar Crime Center, White-Collar Crime, Subprime Mortgage Crisis
March,2,2018
WHITE COLLAR CRIME AND CORPORATE CRIME
White collar crime
• Broad definition: offense committed by workers in the course of their commercial
activities (Sutherland, 1949-1983 Sutherland came up came up with differential
association)
• Include CEOs and owners of the company (they are workers of the company too)
Term first used by Sutherland
• Distinguished white collar crime from ordinary or street crime
• Seeing that while collar criminals are not needy criminals who commit crimes out
necessity
• Not a MAJOR TOPIC in criminology until the 1990s
• White collar criminals are not needy criminals but still engage in various types of crime
The Elements of White Collar Crime
Criminal Events Perspective
Examines white-collar crime in combination of offender, victim, and context in
which the crime takes place (not only studying the offender or accessing the
damage by the victim or studying environments of crime but looking at all these
elements together)
Occupation
Special status: confers power, trust, and identity
Context in which individuals lead their lives
Crimes within ‘Legitimate’ occupation ( for example: drug dealing is a
illegitimate occupation so if white collar crime occurs it doesn’t count)
Illegitimate occupation: not white collar crime
Legitimacy provides opportunities
Law
Often, white collar crimes involve violations of administrative or regulatory law
Not criminal law in a traditional sense
Yet, they ARE crimes can in fact be prosecuted in criminal courts
Fraud
Use of deception to acquire unlawful gain (money, power, etc.)
Most white-collar crimes are examples of fraud
Power or Trust
White collar criminals abuse the power and trust that comes with their legitimate
occupation ( example: doctors)
They are ‘respected’ and ‘trusted’; often use their appearance of respectability to
commit crime.
Characteristics of White- Collar Crime
find more resources at oneclass.com
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Most important thing to know: White collar criminals and crime do not match well with
the images and understandings of conventional criminals and crimes ( goes back to what
Sutherland says, white collar criminals are not mean criminals)
White-collar crimes are sophisticated and involve considerable planning
Committed by offenders who ‘should know better’
Again, different from other conventional offenders
It’s rarely that these offenders did not have a choice
Characteristics of White- Collar Offenders
Sophistication
Requires high-level of knowledge
Knowledge of occupational and legal context and training
You have to know well enough to commit crimes
Example: insider trading (for example what the goals are what’s going to happen
to happen in a few years)
Planning
Offenders are meticulous about planning their crimes
They understand the risks involved and try to see it from all angles
Self-Concept
Offenders regard themselves as respectable citizens and not as criminals; crimes
are extensions of their legitimate occupations ( this is because the crimes they
commit are extensions of their occupation, they are still doing their job)
Hold high social standing and rarely engage in other types of ‘traditional’ or
‘conventional’ crimes: helps them to maintain noncriminal identity
Relatively easy to neutralize their behaviors
Criminal careers of White-collar offenders
Do not have extensive ‘track record’ as other conventional offenders
Some offenders do have extensive histories of ‘white-collar’ criminality
Explaining White- Collar Crime
The usual motive of white-collar criminals
Money (most popular motive, even for CEOS for a huge corporation)
The difficulty of explaining white collar criminals
Do not fit the pattern envisaged by most traditional theories of criminality
They were mostly good kids growing up, and continue to be good adults
Researchers explain white-collar crime as a combination of opportunity and learning
environments
Coleman’s (2005) three factors:
1) Motivation
2) Culturally learned neutralizations
3) Opportunity to commit crimes
Corporate ethical environment
Criminals can also learn techniques, rationalizations, norms, and attitudes
associated with their offenses from their co-workers, employers, occupational
subcultures
find more resources at oneclass.com
find more resources at oneclass.com
Other protective measures for white collar criminals
They are often isolated from unfavorable definitions of their illegal activities
1) Mass media: tends to condemn conventional crimes, but much more lenient
with white collar crimes
2) High-status occupations: shield offenders from government officials (they need
donations to run for offices)
3) The in-group mentality and association among themselves
Corporate Crime Behaviour
Corporate crimes are criminal act are not individual specific but focused on collections of
people such as corporations , organizations and their management.
Ex) Some members of leadership within an organization may participate in insider
trading by providing information to outside sources about decisions that will impact stock
prices.
Enron Scandal (2001)
Deflating debt and inflating profits
Accounting fraud and fixing
Martha Stewart (2001)
Insider trading
Worldcom (2002)
Capitalized costs
Subprime mortgage crisis (2007)
Nature Types of Corporate Violations
Crimes against consumers
Manufacturers making unsafe products
Retailers tricking customers
Repair specialists swindling consumers
Ex) Automotive industry, Pharmaceutical industry, Tobacco industry
Crimes against owners
Committed by people within the organization who have knowledge of
organizational practices and how to get around rules and regulations governing
organizational behavior.
Crimes can be directed against the owners of the companies or against the
management and senior leaders of the organization
Falsifying reports; misrepresenting financial success or failure
Hard to detect; usually brought to attention by ‘whistle-blowers’
Crimes against employees
Companies violate health and safety laws leading to employee injury
Loss of jobs and unemployment due to company failures
Crimes against the community at large
Pollution
Costing taxpayer’s money
Both white-collar and corporate crimes can overlap the number of victims
(shareholders, customers, employees, and the community) with a single crime
“Enronization” of corporate criminality (Clinard, 2006)
find more resources at oneclass.com
find more resources at oneclass.com
Document Summary
White collar crime: broad definition: offense committed by workers in the course of their commercial activities (sutherland, 1949-1983 sutherland came up came up with differential association) Include ceos and owners of the company (they are workers of the company too) Special status: confers power, trust, and identity. Context in which individuals lead their lives. Crimes within legitimate" occupation ( for example: drug dealing is a illegitimate occupation so if white collar crime occurs it doesn"t count) Often, white collar crimes involve violations of administrative or regulatory law. Not criminal law in a traditional sense. Yet, they are crimes can in fact be prosecuted in criminal courts. Use of deception to acquire unlawful gain (money, power, etc. ) Most white-collar crimes are examples of fraud. White collar criminals abuse the power and trust that comes with their legitimate occupation ( example: doctors) They are respected" and trusted"; often use their appearance of respectability to commit crime.
