SOC 1500 Chapter Notes - Chapter 13: Extortion, Salami, Cybercrime

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7 Apr 2012

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Chapter 13: Crimes of Power
It has become easy in our global economy to use illegal tactics to make a profit. We
refer here to these crimes of the marketplace as enterprise crimes and divide these
into 3 categories:
- White-collar crime
- Cybercrime
- Organized crime
Enterprise crimes: crimes of opportunity for financial gain that involve breaking
regulatory rules but not personal victimization
White-Collar Crime
White-collar crime: the illegal activities of people and institutions whose
acknowledged purpose is profit through legitimate business transactions.
- Illegal acts that capitalize on a person’s status in the marketplace
- Ex: embezzlement, fraud, market manipulation, restraint of trade and false
Today’s definition of white-collar crime includes all individuals who use the
marketplace for their criminal activity, from middle-income Canadians to corporate
- Experts place the cost of white-collar crime at hundreds of billions of dollars.
Occupational crime: crime committed by employees for personal gain using the
structural advantage provided by their employment
- Occupational crime alone amounts to billions of dollars per year
International White-Collar Crime:
Corporate crime: legitimate companies commit crime in the course of their usual
business, fostered by a strongly competitive environment
Government crime: includes illegal acts committed by government officials or with
their knowledge and support, as well as cover-ups of other persons’ crimes
Occupational crime: involves people making extra money by bending or breaking
the rules, perhaps because of financial straits or other business related problems
Organized/professional crime: involves people or groups of people whose primary
source of income is illegal.
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Four categories of white-collar crime:
Ad-hoc violations: committed for personal profit, such as welfare fraud or tax
Abuses of trust: committed against an organization, such as embezzlement, bribery
or kickbacks
Collateral business crimes: committed to protect business
- Ex: concealing environmental crime
Con games: committed to cheat clients
- Ex: fraudulent land sales, sales of bogus securities
Types of White-Collar Crime
Swindling: stealing through deception by individuals who try to bilk people out of
their money
- Ex: door to door sale of faulty merchandise
Chiselling: refers to cheating an organization or its consumers.
- Chisellers are looking to make quick profits and might charge for bogus auto
repairs or cheat customers on home repairs.
- Can take place in the commodity and stock markets
- Churning: repeated and unnecessary buying and selling of stock with either
the intent to defraud the client
- 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
o Speculate on the stock of companies that are rumoured to be takeover
targets and make a profit on the difference between current stock
prices and the price the acquiring company is willing to pay
There are 3 major types of internet security fraud:
Market manipulation: an individual tries to control the price of stock
- In a pump and dump scheme, erroneous information is posted online to get
unsuspecting investors to become interested in a stock and then selling
previously purchased stock at an inflated price
- Cyber smear: negative information is spread online about a stock, driving
down its price, enabling people to buy it at an artificially low price before the
company offers rebuttals
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