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PSYC39 - Psych and the Law - Lec 6: Economic Crime (near-verbatim)

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David Nussbaum

PSYC39 Lecture 6: Economic Crime PY Date: Oct 22, 2012 Which crimes are most severe? -rape/murder, treason = back in the old days when Canada had capital punishment, treason was a capital crime (therefore, = severe crime) -why was/is treason such a serious crime? -ex) naval officer supplying secret info to Russians info about where Canadian ships were in the Arctic etc; -charged under 2 things: Criminal Code and Queens Rules -will probably get life sentence -the reason why treason is serious when ppl are engaged in acts of treason against ones country, its not simply a crime with only one or two victims jeopardize many ppls lives and the security of the country; if this info is compromised, that makes ALL of us vulnerable -this is why treason is seen as a particularly serious crime even though nobody is killed; theres potential -incest (esp if large age diff; goes against societal norms; child cant say anything; it impacts ability to trust ppl; PTSD; power differential; laws prohibiting incest if power differential; in the case of brother and sister = still against the law even if they both consent but the penalty may be less than in the case of parent and child) - and financial/economic crimes are also severe Slide 2: Types of Economic Crime White-collar crime o ppl who are in positions of trust/power/authority/responsibility in large org (like corporations, banks, financial institutions ) have lot of opportunities to steal huge amounts of money Theft (diff from robbery) o Robbery = direct confrontation of the victim (violent even if no assault occurred; the potential for violence is still there) Fraud o More typical of white-collar crimes although not limited to ppl in corporations (ex: writing a cheque at a store when you know you have no money in your account and you dont do anything to pay back the money owed) Prostitution Human trafficking o In the last 10-15 yrs it has become much more of serious crime worldwide much related to prostitution o 100s of thousands are kidnapped and enslaved in prostitution; these women often cope using drugs Drug trade o Virtually no limits o There are 2 sides to the drug trade; many lives are destroyed by substance abuse & addictions what can you do about it? 1 PSYC39 Lecture 6: Economic Crime PY Date: Oct 22, 2012 Two polar options: 1) wage the war on drugs try as hard as possible to find the ppl who are distributing drugs more widely incarcerate; hasnt been successful o Cant be successful even if you arrest a few ppl; the profits are so astronomically high that another 10 ppl will move into their position; so youre just changing who is making the money; you arent getting rid of it 2) other approach is to legalize drugs and take the profit motive out of the game o In 1920s, tried to outlaw alcohol; bootleggers became very wealthy, there were gangwars; came up with prohibition of alcohol o Once prohibition lifted; gvt takes huge tax on alcohol; no wars over alcohol o But when you legalize things like cocaine, kids who initially wouldnt have done it if it were illegal, would try it and become addicted; so we cant exactly legalize it, incidence will skyrocket Slide 3: White-collar crimes Occupational crimes (ex: tax evasion) o Do as an employee o If no taxes, theres no wealth to re-distribute o There really isnt a lot of opportunity in Canada now because about 25 yrs ago, gvt started taxing at the source = employer removes the taxes before you even get your paycheque this tax sent to the gvt o Ppl who have the best opportunity to do tax evasion are ppl that work for themselves if you work for yourself (run a bsn), ppl come in and pay you money, you can do a few things: If ppl pay you cash, dont have to write it down, so theres no record of it then its very hard for gvt to say that youve earned a certain amount of money; say to customers that if they pay cash, they dont have to pay the tax; youre not really saving the customers tax money, but you just want to get out of paying the tax yourself If there are cheques, then they are traceable Another way to evade taxes = claim all sorts of expenses that never really happened = reduces their earning; ex) take a vacation but write it off as a business meeting Corporate crimes (ex: price fixing) o May have more serious consequences compared to tax evasion (but tax evasion is serious enough crime b/c it deprives the gvt of the funds that are needed to run services) 2PSYC39 Lecture 6: Economic Crime PY Date: Oct 22, 2012 o Corporate crimes: Pricing war: back in the day, gas = 5 cents/L; lets say the gas station is selling for 27 cents and the one across the street is losing customers, so they lower it to 26 cents; then the other gas station lowers theirs to 25 cents pricing wars are good for the consumer Even with pricing wars, ppl wouldnt sell at such a low price that they would lose money; its still reasonable for them to lower the price to that extent Now: all gas prices are the same, so it appears that all gas stations come together to decide on the price for a certain day; collusion If anybody had evidence that this was happening via collusion then this is the crime of price fixing and they would be charged hundreds of millions of dollars; because affects a lot of ppl Although theres no evidence, although it looks like they are price fixing; one of their defenses (of the gas companies) is that they all buy gas @ the same price from producer; and they all have roughly similar profit margins built in so they all charge the same; but consumers see that when price changes of one company, they all change the same way More political than criminal psycholgoy Slide 4: White-collar Offenders - Profile Profiles are often misleading b/c they are general
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