white-collar crime
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What is white-collar crime?
White-collar crime is committed by individuals who exploit their social, economic, or technological power for personal or corporate gain, often through deceit and concealment rather than force or violence. It frequently involves abusing positions of trust and power.
Examples of white-collar crimes include fraud, bribery, money laundering, computer crimes, price collusion, and tax evasion. These crimes can be committed by individuals or as a collective, organized effort by a corporation to increase profits. Corporate crime, a subset of white-collar crime, refers to illegal activities carried out to benefit a company's economic interests.
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How is white-collar crime different from other types of crime?
White-collar crimes differ from other offenses because they exploit financial, technological, or social power for personal or corporate gain, often through deceit and concealment rather than force. These crimes frequently involve abuse of positions of trust, like public officials accepting bribes or corporate officers fixing prices. Unlike violent crimes, white-collar crimes don't involve physical harm, but their economic impact can be enormous, exceeding the costs of street crime. Examples range from fraud and money laundering to computer crimes and regulatory violations, with the cost to society including health risks, environmental damage, and job losses.
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What are some examples of white-collar crimes?
White-collar crimes are nonviolent illegal acts that exploit social, economic, or technological power for personal or corporate gain. These crimes often involve deceit, concealment, or violation of trust.
Examples include fraud, which involves obtaining money or services through false representation. Other examples are money laundering, bribery, embezzlement, insider trading, computer crimes, forgery, and regulatory offenses such as securities violations and tax evasion.
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Who usually commits white-collar crimes and where do they happen?
White-collar crimes are typically committed by businesspeople, high-ranking professionals, and politicians who exploit their social, economic, or technological power for personal or corporate gain. These crimes often involve deceit and concealment rather than force or violence.
White-collar crimes can occur in various settings, including corporations, government institutions, and even online. Corporate crime, a subset of white-collar crime, involves collective and organized efforts by a corporation to increase profits at any cost. Fraud is the most common type of white-collar crime and can involve telemarketing schemes and real estate. Computer crimes, such as securities fraud and identity theft, are also a means by which white-collar criminals exploit technology.
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What impact can white-collar crime have on people and businesses?
White-collar crimes, such as fraud, bribery, and money laundering, exploit social, economic, or technological power for personal or corporate gain. These crimes often involve deceit and abuse of trust, making them difficult to detect.
The impact of white-collar crime is far-reaching. It causes significant financial losses to individuals and businesses and poses health risks, environmental damage, and job losses. The cost to society is substantial, exceeding that of organized and street crime. Though difficult to estimate precisely due to underreporting, the cost of white-collar crime in the United States is thought to be at least ten times the combined costs of thefts, burglaries, and robberies.
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How do authorities detect and prevent white-collar crime?
White-collar crimes, often involving deceit and abuse of trust, are difficult to detect because losses aren't always obvious, and schemes can be sophisticated. Prevention involves regulatory bodies, law enforcement, and internal controls within organizations.
Detection often relies on whistleblowers and data analysis to uncover fraud, bribery, and other offenses. Authorities use measures like surveillance, audits, and legal frameworks to prosecute offenders and deter future crime. Penalties can include fines, imprisonment, and civil sanctions.
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white-collar crime, crime committed by persons who, often by virtue of their occupations, exploit social, economic, or technological power for personal or corporate gain. The term, coined in 1939 by the American criminologist Edwin Sutherland, drew attention to the typical attire of the perpetrators, who were generally businesspeople, high-ranking professionals, and politicians. Since Sutherland’s time, however, such crimes have ceased to be the exclusive domain of these groups. Moreover, developments in commerce and technology have broadened the scope of white-collar crime to include cybercrime (computer crime), health-care fraud, and intellectual property crimes, in addition to more-traditional crimes involving embezzlement, bribery, conspiracy, obstruction of justice, perjury, money laundering, antitrust violations, tax crimes, and regulatory violations.
Specific examples of activities that constitute white-collar crimes include price collusion (conspiring with other corporations to fix the prices of goods or services as a means of obtaining artificially high profits or driving a competitor out of the market), falsifying reports of tests on pharmaceutical products to obtain manufacturing licenses, and substituting cheap, defective materials for costlier components specified in the construction of roads or buildings but charging the customer for the full cost of the specified materials. At times such activities can be attributed to individual employees or executives acting on their own initiative, but it is often the case that they represent a collective and organized effort by a corporation to increase its profits at any cost.
White-collar crime that is part of a collective and organized effort to serve the economic interests of a corporation is known as corporate crime. In some cases corporate crimes are conducted by bogus entities that pose as legal corporations or partnerships. Although corporations cannot be incarcerated, they can be criminally punished with fines and other sanctions. Criminal liability in these cases is based on the acts or omissions of the company’s employees and executives.
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Common characteristics
Although white-collar crimes are quite varied, most have several characteristics in common. First, they involve the use of deceit and concealment, rather than the application of force or violence, for the illegitimate gain of money, property, or services. A defendant convicted of making false statements in order to obtain a government contract, for example, is considered a white-collar criminal.
Next, white-collar crimes typically involve abuse of positions of trust and power. Public officials who solicit and accept bribes, or corporate officers who fix prices to drive competitors out of business, are engaging in such abuse of their positions. White-collar crime is also often more difficult to detect than other types of crime, in part because losses may not be immediately apparent to victims but also because the crimes can involve sophisticated schemes and cover-ups. Many white-collar crimes require concerted criminal activity by coconspirators. For example, a case of real-estate fraud may involve the knowing participation of an escrow officer, a buyer, an appraiser, and a bank officer, all of whom were willing to sign false documents to perpetrate a fraud for personal gain.
Fraud, the most common type of white-collar crime, involves obtaining money or services by making false representations or promises. The key question in these cases is ordinarily whether the defendant intended to deceive the victims or merely failed in an honest business venture. One of the most common types of fraud involves telemarketing schemes that misrepresent the value, the terms of sale, or the use of the goods or services being sold.
Perjury, obstruction of justice, false statements, and witness tampering are also considered white-collar crimes. Although the goal is not necessarily to obtain money or services, these crimes are illegal because they interfere with the proper functioning of the justice system. Bribery and extortion are more general, in that they constitute illegal means of influencing persons in power in public or private institutions. Bribery involves the giving of something of value in exchange for an official’s exercise of power. Extortion is a threat made to obtain a benefit from either a public official or a private individual. Money laundering is a relatively new type of white-collar crime that is utilized by criminals wishing to conceal profits gained through illegal activities. Drug dealers and purveyors of counterfeit goods and currencies will create money-laundering schemes to hide the source of their earnings.
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A wide variety of regulatory offenses are also considered to be white-collar crimes. These may include violation of tax laws, avoidance of currency-reporting requirements, securities violations, and environmental crimes. In addition to criminal punishment, those convicted of regulatory violations may also be subject to civil and administrative penalties. Such violations, unlike common-law crimes, may not require any criminal intent by the defendant. Instead, they may be seen as “strict liability” crimes for which mere failure to comply with the legal standards is sufficient grounds to establish criminal liability.
Computer crimes represent one means by which white-collar criminals exploit technology. Common examples cover a wide variety of criminal activity, including using a computer as a mechanism for committing securities fraud, credit-card fraud, and identity theft. Computer crimes also may involve illegally accessing and tampering with other users’ computer files.