Chapter 13 Crimes of Power: White- collar, Corporate, and Organized Crime
- Crimes of the marketplace known as enterprise crimes, which are divided into
three categories: White-collar, Cybercrime and organized crime.
- Enterprise Crimes: Crimes of opportunity for financial gain that involve
breaking regulatory rules but not personal victimization
- White-collar crimes: Illegal acts that capitalize on a persons status in the
marketplace, e.g, embezzlement, fraud, market manipulation, restraint of trade,
and false advertising.
- Cybercrime: Using computer technology for illicit gain, such as fraud, and for
moral crimes, such as child pornography and stalking.
- Organized crime: Crime committed by a gang, e.g, drug trafficking
Redefining White-collar crime
- An illegal act committed by nonphysical means to obtain money or property or to
obtain business or personal advantage.
- Todays definition of white-collar crime includes all individuals who use the
marketplace for their criminal activity, from middle-income Canadians to
- White-collar individuals use their positions of trust in business or government to
commit crimes, such as pilfering, soliciting bribes or kickbacks, and
embezzlement. Other white-collar criminals victimize the public, for example in
land swindles, securities thefts etc. Also some white-collar criminals become
involved in criminal conspiracies designed to improve the market share or
profitability of their corporations such as false advertising and price fixing.
Occupational Crime: Crime committed by employees for personal gain using the
structural advantage provided by their employment
- Society has begun to recognize the seriousness of white-collar crimes such as a
judge taking a bribe to give a light sentence, a doctor cheating on medical
- Gilbert Geis says white collar crime is more serious than street crime
- White-collar crime occurs in other countries as well.
- Offences grouped into 4 categories
1. Corporate Crime: In which legitimate companies commit crime in the course of
their usual business, fostered by a strongly competitive environment
2. Government crime: Includes illegal acts committed by government officials or
with their knowledge and support as well as cover-ups of other persons crimes
3. Occupational crime: Involves people making extra money by bending or breaking
4. Organized/ professional crime: Involves people or groups of people whose
primary source of income is illegal Edehlhertz divides white-collar crime into 4 categories
1. Ad-hoc violations: Committed for personal profit, such as welfare fraud or tax
2. Abuses of trust. Committed against an organization, eg Bribery
3. Collateral business crimes. Committed to protect business, eg concealing
4. Con games. Committed to cheat clients, eg Fraudulent
Types of White collar crime
1. Swindling: First type of white-collar crime: Staling through deception by
individuals who try to bilk people out of their money, e.g, door-to door sale of
-Financial Swindles and Religious swindles
2. Chiselling Second type of white-collar crime: Cheating an organization or its
- Professional chiseling: professionals can use their positions to chisel clients
- Securities Fraud: Chiselling can also take place in the commodity and stock
- Churning: A white-collar crime in which a stock-broker makes repeated trades
to fraudulently increase his or her commissions.
- Insider trading: Illegal buying of stock in a company based on information
provided by someone in the company, such as an employee, attorney, or
accountant retained by the firm
Arbitrage: The practice of buying large blocks of stock in companies that are
believed to be the target of corporate buyouts or takeovers.
-Internet Fraud: using the internet to intentionally manipulate the securities
marketplace for profit. Three types of internet security fraud:
a. Market Manipulation: An individual tries to control a price of a stock
b. Cyber smear: Works in reverse, negative information is spread online about a
c. Fraudulent offerings of securities: a criminal creates websites designed to
fraudulently sell securities by inflating the value of assets, overstating returns and
understanding risks. rd
3. Individual Exploitation of Institutional Position 3 type of white-collar
crime: individuals can exploit their power to take advantage of others. Example:
a fire inspector can demand that a restaurant owner pay him to be granted an
- Exploitation in Government- Government figures have used their positions to
profit from bribes and kickbacks
- Exploitation in Industry- Purchasing agents in large companies can demand a
kickback for awarding contracts to suppliers and distributors.
4. Influence Peddling and Bribery 4 type of white-collar crime: Individuals
in important institutional positions can sell power, influence, and information to
outsiders such as government employees taking kickbacks from contractors in
return for awarding them contracts.- One major difference between influence peddling and exploitation of an
institutional position: Exploitation involves forcing victims to pay for services to
which they have a clear right, while influence peddlers and bribe takers use their
institutional positions to grant favors and sell information to which their co-
conspirators are not entitled.
Corruption in the Criminal Justice System
- Corruption in the criminal justice system is disturbing. Society looks and expects
a higher standard of moral integrity from people empowered to uphold the law.
- Credibility of the justice process is weakened when officials who hold power over
other people engage in criminal behavior. th
5. Embezzlement and Employee Fraud: Is the 5 type of white-collar crime.
Individuals use of their positions to embezzle company funds or appropriate
company property for themselves. In this case, the company or organization that
emplys the criminal is the victim of the white-collar crime.
- Blue- collar Fraud: Employee theft can reach all levels of the organized structure.
Blue-collar employees have been involved in systematic theft of a company
commonly known as pilferage.
- Pilferage: Theft by employees through stealth or deception
- Management Fraud:
Converting company assets for personal benefit
Fraudulently receiving increases in compensation such as bonuses or raises
Fraudulently increasing personal holdings of company stock
Retaining a position within the company by manipulating accounts
Concealing the unacceptabth p