History of white collar crime

White collar crime has been around  longer than people may think. Over the years the types of crimes that fell under the white collar crime category grew larger and larger. It wasn't until recently when we finally got a definition, a very vague definition but one at the very least, on white collar crime. 

One of the very first types of white collar crime that was brought to our attention was embezzlement, bribery, and monopolizing businesses. These were the first types of white collar crimes and they actually came from the 15^th century and originated in England.  These crimes were the first actions of white collar crime, but it wasn't until the industrial revolution in the Western industrial society that white collar crime became widespread and people became more aware of it. In order to stop businesses from creating more power for their own company, something had to be done. The Unite States had seen a huge growth in monopolizing businesses.  In order to stop that from consistently occurring, congress passed the Sherman Antitrust Act. The Sherman Antitrust Act of 1890, made it illegal to monopolize businesses in the United States (McGrath, 2008).

             Although there were laws and regulations that were being passed by congress, we still didn't have a definition for white collar crime. So, white collar criminals were getting away with their crimes and were not being punished like the street criminals. In 1939 sociologists Edwin Hardin Sutherland, from the American Sociological Society, came up with this definition for white collar crime. He decided to come up with a definition because he saw how bad white collar crime was becoming in the United States.  Police officers didn’t do anything about these crimes, because they were not violent or theft crimes (McGrath, 2008).  Sutherland defined white collar crime as, “crime committed by a person of respectability and high social status in the course of his occupation” (Podgor & Israel, 2009).

             Now that we have a definition for white collar crime, does it really fit the description of crimes that are consistently occurring in the United States? The definition that Sutherland gave many years ago, no longer defines all of the crimes that fall under the white collar crime category because it has grown over the years. The United States  started off with just bribery, embezzlement, and monopolizing businesses We have grown into more crimes such as insider trading, computer crimes, many different types of fraud, etc. Since white collar crime has grown, laws and regulations had to grow too. Over the years, more laws and regulations were made for each type of white collar crime because they are different in their own way.

              In the future,  maybe another sociologist, can “coin” another definition for white collar crime as Sutherland did in the 1930’s.  We do need a new definition that can cover all of the new crimes that have come along with white collar crimes. It is a growing crime and we need to grow with it. We need to be sure that we can continue to grow with the definitions for the crimes and also the punishments for these crimes. If we don’t, we will have more people committing white collar crimes and they will continue to live in society with the rest of us. 

Work Cited:

McGrath, J. (2008). How white collar crime works. How stuff works. Retrieved from    
             http://money.howstuffworks.com/white-collar-crime2.htm

Podgor, E., & Israel, J. (2009). White collar crime in a nut shell. (4th ed., p.1). St. Paul, MN: Thomson                            
             Reuters.

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California Penal Code 529

            There are many different types of crimes that fall into the category of white collar crime. You  have crimes such as, embezzlement, various types of fraud, cyber-crime, and the list goes on. With these various types of crime, there are also different types of laws and regulations for each crime.

            One of the most common crimes is identity theft. According to the official California legislative information, penal code §529, anyone who falsely impersonates another by either his/her private or official capacity and assumes that person’s identity through the means of (1)if one becomes bail or surety before a court or officer authorized to take that bail or surety for any proceeding; (2) uses the name of another person to verify, publish, acknowledges, or proves to be someone else in a written manner; (3) does any type of act such as, being liable for any suit or prosecution, having to pay any sum of money, forfeiture, or penalty, or have any benefits by falsely impersonating one’s identity. Doing any of the above can have you prosecuted by a fine that does not exceed ten thousand ($10,000) dollars, imprisonment in a county jail not exceeding one year, or both the fine and imprisonment.

            The state of California clearly defined what is meant by identity theft. By impersonating another person through any type of means from above will have consequences. The laws and regulations written for identity theft are flawless, in my eyes. It contains the right amount of information that is needed. There are many types of white collar crime and in order to have a strong penal code against every crime, they broke them up into its own code. This is why the penal code for identity theft is well written. The only thing that should change is the punishment. The punishment for identity theft is either imprisonment or a fine, or possibly both. The fine is only up to ten thousand ($10,000) dollars and imprisonment is only up to one year. Why would that stop a criminal from continuing to steal or sell someone else’s identity?

Work Cited

Official California Legislative Information. Penal code. (n.d.). Retrieved from http://leginfo.legislature.ca.gov/faces/codes_displayexpandedbranch.xhtml

Prevention

White collar crime has become a widespread dilemma. It has grown to be what seems like an unstoppable and never ending crime. So, how can we prevent any type of white collar crime occurring in our lives? Unfortunately there is no one way to prevent this type of crime from occurring because there are so many different types of white collar crime. Some of the most common white collar crimes that all of us can run into are ponzi schemes, cyber crime, or identity theft.

            According to the United States Securities and Exchange Commission, a ponzi scheme is “an investment fraud that involves the payment of purported returns to existing investors from funds contributed by new investors.” As an investor, you want to make sure that the money you are investing will have a good return. So, how can you prevent fraud as an investor? There are questions that you can ask yourself in order to be sure you are making the correct decision by investing. Before investing, you want to check if the seller is licensed, if the investment is registered, what is the risk and potential returns are if the investment is clear, and lastly who can I ask for help (U.S. Securities Exchange Commission)? If you can’t answer these questions, you most likely do not want to invest in that particular investment.

            Cyber-crimes can be hard to detect when comparing it to street crimes. It is hard to detect because cyber-criminals are becoming more educated. cyber-criminals are learning how to duplicate websites, such as your banking website, in order to collect personal information from people. These days, we all rely on technology and using the internet more often than before. Not to say the internet is not safe, but how can we protect ourselves from being scammed online? To better protect yourself and your computer, you should have preventative steps in order to secure your personal information. Make sure to turn on a pop-up blocker, which will prevent fraudulent e-mails or phishing e-mails from getting  into your e-mail account; have some type of anti-virus software on your computer to help scan for viruses or malware; be sure to use your firewall system that is located in your computer system itself, to prevent hackers; use encryption for important information because it can “eat” your information up if a hacker tries to steal it; if you are an online shopper be sure to only shop at sites that are secured with “https” to help prevent credit card fraud (eHow).

            Cyber-crimes is not the only growing crime. Another crime that is starting to become an issue around the world is identity theft. According to The National Crime Prevention Council (NCPC) there are little things that everyone can do in order to prevent identity theft from occurring to them. When we receive mail or even when we send mail, we don’t think that something could happen. Unfortunately, criminals do steal inbound and outbound mail in order to obtain your personal information. How can you be sure your mail is safe? Drop off any outbound mail at your local post office and make sure your mail is safe at the post office if you’re out of town. Another way you can protect your personal information is to shred your mail. As I mentioned earlier, if you are using the internet to do things, such as paying bills or shopping online, remember to check that the site you are using is secured. If it doesn't seem secured, don’t use that site. Other ways you can prevent your identity from being stolen is, keeping your personal information in a safe place. For instance, do not carry your social security number on you and do not give it out to others; keep your insurance card information in a safe spot and not in your car; and have your car registration in a safe place inside your home (NCPC, 2005). These are just some preventative steps that you can take to protect yourself.

Work Cited

Bureau of Justice Assistance, National Crime Prevention Council. (2005). Preventing identity theft: a guide for consumers. Retrieved from website: http://www.ncpc.org/cms-upload/prevent/files/IDtheftrev.pdf

eHow Contributor. (n.d.). How to prevent cybercrime. Retrieved from http://www.ehow.com/how_4967690_prevent-cyber-crime.html

U.S. Securities and Exchange Commission, (n.d.). Ponzi schemes – frequently asked questions. Retrieved from website: http://www.sec.gov/answers/ponzi.htm

Most common type of white collar crime

White collar crimes are more serious than what people view it as. Although on the outside, it doesn't seem to hurt people physically it does hurt people financially. No one can run away from being a victim of white collar crime like they can from being a victim of another type of crime. White collar crime is a large category that can be broken down into different sub-categories. The most common types of white collar crime are fraud and schemes/scams.  These white collar crimes are affecting America today. White collar crime is costing the United States about $300 billion dollars annually (Cornell University Law School, 2010). In order to prevent white collar crime from taking place, we need to learn about the most common types of white collar crimes.

Fraud is one of the most common type of white collar crime, because there are different types of fraud., Such as, health care fraud, corporate fraud, and debit card fraud. People in the United States cannot afford health care but yet there are health care providers or hospitals that are willing to lie. They will defraud people, like you and me, in various ways like charging more for services, billing you for services that you never had, or upcoding you for services (FBI, 2011). Recently, federal agents uncovered the largest health care fraud in history. There were false billings to over 100 people for about $450 million dollars. The people being charged for falsifying bills are all over the United States going from Los Angeles, California to Miami, Florida (Freiden, 2012). Now, is this any fair to you or to me that health care providers or hospitals would do this? Are they that desperate for extra money? 

Small businesses or corporations are no better than health care providers or hospitals. They too can defraud people, which are considered a corporate fraud. Corporate fraud is done through the means of falsifying accounting entries, corporate insiders leaking proprietary information, misuse of corporate property, kickbacks, etc (FBI, 2011). An example would be the Galleon group hedge fund in New York. The founder, Raj Rajaratnam, was convicted in May 2011 for his insider trading activities (FBI, 2011).

Debit card fraud can happen to anyone and done by anyway. Skimming cards and selling the information on the web is not new news. Waiters and waitresses are the ones who can do this easily without anyone finding out until victims like you and me, check our statement or card activity via online. Ken Stalcup, a certified fraud examiner (CFE) shared his story with investipedia.com. Ken gave a waitress his debit card, while eating out at a restaurant, and she just so happened to be out of his sight. While Ken was waiting for her to come back with the credit card slip to sign, she had already copied his card and later would either sell or use his card online. Ken was unaware of this happening until he got a call from his bank (Fontinelle, 2012).

There are various different types of schemes, but one of the most common is the Nigerian scheme, also known as the “advance fee fraud” scheme (U.S. Securities and Exchange Commission, 2010). Emails or letters are sent to people to help fund officials of a government. The email or letter will tell a story to sway you into helping out. By doing so you would give a fee upfront and you are promised a certain amount of money in the end, which obviously never happens (Mikkleson, 2010).

References:

Cornell Univeristy Law School. White collar crime. (2010, August 19). Retrieved from http://www.law.cornell.edu/wex/white-collar_crime

Federal Bureau of Investigations , (2011). Financial crimes report to the public. Retrieved from website: http://www.fbi.gov/stats-services/publications/financial-crimes-report-2010-2011

Fontinelle, A. (2012, May 07). The most common types of consumer fraud. Investopedia, Retrieved from http://finance.yahoo.com/news/most-common-types-consumer-fraud-185647511.html

Frieden, T. (2012, May 2). 107 charged in health care fraud bust. CNN. Retrieved from http://articles.cnn.com/2012-05-02/justice/justice_health-care-fraud_1_health-care-largest-bust-community-mental-health-centers?_s=PM:JUSTICE

Mikkleson, B. (2010, February 01). Nigerian scam. Retrieved from http://www.snopes.com/fraud/advancefee/nigeria.asp

U.S. Securities and Exchange Commission, (2010). "advance fee fraud" schemes. Retrieved from website: http://www.sec.gov/answers/nigeria.htm

An overview on White Collar Crime

Edwin Sutherland was the first person to come up with the term “white collar crime.” It was referring to those who worked in a high respectable occupation, who was also high in social class (Strader, 2002). When white collar crime first started back in the mid-1970’s, the types of crimes in this category were much smaller than what it is now. Before white collar crimes were crimes such as, securities fraud or tax fraud; these types of crimes were also only done by those who were high in social class. Now, we have middle class or lower class committing securities fraud or tax fraud. So, Sutherland’s definition of white collar crime is now evolving and is becoming outdated.

Why commit a white collar crime? Sutherland describes these types of criminals as wealthy; these criminals have money and yet they want more. James Coleman wrote about understanding white collar crime. In his book, Coleman states that wealthy people who commit white collar crimes do not want to lose what they have because they worked so hard to get where they are. They don’t want to become someone in middle class or lower class; these wealthy criminals want to keep their high social status and will do anything to make sure the money keeps flowing in.

FBI's  suspicious activity reports (SARs)

What is considered a white collar crime? There are many different types of crimes that fall under the “white collar crime” category. These crimes vary from different types of fraud, schemes and identity theft. White collar crimes affect everyone. It can either affect you as an individual or as a company. Depending on what type of white collar crime occurred, would depend on how much damage was done. For example, mortgage fraud targets our nation’s financial institutions; this can be done by an individual or by an organized crime group. There are a variety of methods in which mortgage fraud can be accomplished, whereas the most known include misstatement, misrepresentation, or omission relating to a real estate transaction (FBI, 2010-20122). 

suspicious activity reports (SARs)

Another example would be identity theft; which affects you as an individual. Identity theft can happen to anyone, no matter what age you are. According to the Bureau of Justice Statistics (BJS), in 2010 they found that ages 12 and older have experienced one or more types of identity theft in the United States. Click the identity theft statistics for more information.

When white collar crimes occur, who are the ones benefiting from these crimes? The white collar criminals are the ones who benefit from these types of crimes. If the criminal(s) are targeting the nation’s financial institutions, they are giving themselves a lump sum of money. If the criminal(s) are targeting individuals, they are gaining some type of the victims’ identity. They can steal their social security number, debit and/or credit cards; they can get a loan, a car, or even a house with your information.

Protection starts with you. We are all responsible for what we have and we are the only ones that can make sure our information is protected. Be smart about where you use your debit or credit card(s) or who you give your social security number to. Our government, such as the Federal Bureau of Investigations (FBI), is now taking action. The FBI has resources available to us which helps stop white collar crimes early or even prevent them from occurring. Knowledge about white collar crime can only help you protect yourself from future incidents. 

References:

Federal Bureau of Investigations , (2012). Financial crimes report to the public. Retrieved from website: http://www.fbi.gov/stats-services/publications/financial-crimes-report-2010-2011

Coleman, J. (2006). The criminal elite. (Sixth ed., pp. 193-209). New York, NY: Worth Publishers.

Langton, L. (2011, November 30). Identity theft reported by households, 2005-2010. Retrieved from http://bjs.ojp.usdoj.gov/index.cfm?ty=pbdetail&iid=2207

Strader, K. (2002). Understanding white collar crime. Lexis Nexis, Retrieved from http://www.lexisnexis.com/lawschool/study/understanding/pdf/WhiteCollarCh1.pdf

U.S. Department of Justice, Bureau of Justice Statistics. (2011). Identity theft reported by households, 2005-2010. Retrieved from website: http://bjs.ojp.usdoj.gov/content/pub/pdf/itrh0510.pdf