White Colar Crimes

White Collar Crimes: Types and Reaction to it

Introduction:
White-collar crime is crime committed by a person of responsibility and high social status in the course of his or her occupation. It differs from conventional crime in that the victims may be unaware of the crime and the offender may not view himself as a criminal. White-collar crimes are committed by the affluent, “respectable” people in the course of their daily business activities. These are organized crimes because they are often perpetuated through the role of one’s occupation.

A wide variety of crimes are now classified as white-collar crimes such as income tax evasion, stock manipulation, consumer fraud, bribery, and extraction of kickbacks, embezzlement, and misrepresentation of corporate information.

A newer type of white-collar crime is computer crime. The use of such high technology allows one to carry out embezzlement or electronic fraud without leaving a trace, or to gain access to a company’s inventory without leaving one’s home.

In addition to the financial costs of this form of crime, that run into billions of rupees per year, white-collar crimes have distinctive social costs, including a decline in the quality of life, inflation for general public, and weakening of the social order. If those at the top of the nation’s economic, power and social structure feel free to violate the law, less privileged citizens can certainly be expected to follow suit.

Given the economic and social costs of white-collar crimes, one might expect this problem to be taken quite seriously by the criminal justice system of Pakistan. Yet white-collar offenders are more likely to be very leniently treated than any other class of criminals. They are not arrested because bails-before-arrest are granted to them quite readily, hearings against them proceed with much delays in the courts, and eventually only financial penalties are imposed upon them. Moreover, convictions for such illegal acts do not generally harm a person’s reputation and career aspirations nearly so much as conviction for a petty everyday crime would. Thus, if an offender holds a position of status and influence in Pakistani society, his or her crime is treated as less serious and the sanction is much more lenient.

What is White-collar Crime?
White-collar crime is a financially motivated, nonviolent crime committed for illegal monetary gain.
Nolo’s Plain-English Law Dictionary defines the term White-collar crime as:
A variety of nonviolent financial crimes, generally committed by businesspeople or public officials, involving commercial fraud, consumer fraud, swindles, insider trading on the stock market, embezzlement, bribery, or other dishonest schemes.

Historical Background:
The phrase "white-collar crime" was coined in 1939 during a speech given by Edwin Sutherland to the American Sociological Society. Sutherland defined the term as "crime committed by a person of respectability and high social status in the course of his occupation."
Sutherland was a proponent of symbolic interactionism and believed that criminal behavior was learned from interpersonal interactions. White-collar crime is similar to corporate crime as white-collar employees are more likely to commit fraud, bribery, Ponzi schemes, insider trading, embezzlement, cybercrime, copyright infringement, money laundering, identity theft, and forgery.

Edwin Sutherland defined the term as a "crime committed by a person of respectability and high social status in the course of his occupation" in a speech entitled "The White Collar Criminal" delivered to the American Sociological Society. Sutherland hypothesized that white-collar criminals had different attributions and motives than typical street criminals.
His theory was the result of his attempt to study two fields, crime and high society, which had previously lacked empirical correlation. His goal was to demonstrate a correlation between money and social status and the likelihood of going to jail for a white-collar crime. Although the percentage has risen, number still show a large majority of those in jail are poor, blue-collar criminals.

Many attribute the social climate following the Great Depression as the factor that led to Sutherland 's theory. He noted that in his time, "less than two percent of the persons committed to prisons in a year belong to the upper class". The United States passed antitrust laws in the 1920s and social welfare laws in the 1930s; after the Great Depression, people went to great lengths to rebuild their financial security, and it is theorized this led workers—who worked hard and long and felt underpaid—to take advantage of their positions.

Much of Sutherland 's work was to separate and define the differences in blue-collar street crimes, such as arson, burglary, theft, assault, rape, and vandalism, which are often blamed on psychological, associational, and structural factors. Instead, white-collar criminals are opportunists, who learn to take advantage of their circumstances to accumulate financial gain. They are educated, intelligent, affluent, confident individuals whose jobs involve unmonitored access to large sums of money. Precisely because these criminals were held to such high esteem, Sutherland claimed that society turned a blind eye to the crimes they committed.

What Crimes Qualify as White-Collar Crimes? Although there has been some debate as to what qualifies as a white-collar crime, the term today generally encompasses a variety of nonviolent crimes usually committed in commercial situations for financial gain. Many white-collar crimes are especially difficult to prosecute because the perpetrators use sophisticated means to conceal their activities through a series of complex transactions. The most common white-collar offenses include: antitrust violations, computer and internet fraud, credit card fraud, phone and telemarketing fraud, bankruptcy fraud, healthcare fraud, environmental law violations, insurance fraud, mail fraud, government fraud, tax evasion, financial fraud, securities fraud, insider trading, bribery, kickbacks, counterfeiting, public corruption, money laundering, embezzlement, economic espionage and trade secret theft. According to the Federal Bureau of Investigation, white-collar crime is estimated to cost the United States more than $300 billion annually. Although typically the government charges individuals for white-collar crimes, the government has the power to sanction corporations as well for these offenses. The penalties for white-collar offenses include fines, home detention, community confinement, paying the cost of prosecution, forfeitures, restitution, supervised release, and imprisonment. However, sanctions can be lessened if the defendant takes responsibility for the crime and assists the authorities in their investigation. Any defenses available to non-white-collar defendants in criminal court are also available to those accused of white-collar crimes. A common refrain of individuals or organizations facing white-collar criminal charges is the defense of entrapment. For instance, in United States v. Williams, 705 F.2d 603 (2nd Cir. 1983), one of the cases arising from "Operation Abscam," Senator Harrison Williams attempted unsuccessfully to argue that the government induced him into accepting a bribe.

Both state and federal legislation enumerate the activities that constitute white-collar criminal offenses. The Commerce Clause of the U.S. Constitution gives the federal government the authority to regulate white-collar crime, and a number of federal agencies (see sidebar), including the FBI, the Internal Revenue Service, the Secret Service, U.S. Customs, the Environmental Protection Agency, and the Securities and Exchange Commission, participate in the enforcement of federal white-collar crime legislation. In addition, most states employ their own agencies to enforce white-collar crime laws at the state level.

Definitional issues:
Modern criminology generally rejects a limitation of the term by reference, rather classifies the type of crime and the topic:

1. By the type of offense, e.g., property crime, economic crime, and other corporate crimes like environmental and health and safety law violations. Some crime is only possible because of the identity of the offender, e.g., transnational money laundering requires the participation of senior officers employed in banks. But the FBI has adopted the narrow approach, defining white-collar crime as "those illegal acts which are characterized by deceit, concealment, or violation of trust and which are not dependent upon the application or threat of physical force or violence" (1989). This approach is relatively pervasive in the United States, the record-keeping does not adequately collect data on the socioeconomic status of offenders which, in turn, makes research and policy evaluation problematic. While the true extent and cost of white-collar crime are unknown, the FBI and the Association of Certified Fraud Examiners estimate the annual cost to the United States to fall between $300 and $660 billion.

2. By the type of offender, e.g., by social class or high socioeconomic status, the occupation of positions of trust or profession, or academic qualification, researching the motivations for criminal behavior, e.g., greed or fear of loss of face if economic difficulties become obvious. Shover and Wright (2000) point to the essential neutrality of a crime as enacted in a statute. It almost inevitably describes conduct in the abstract, not by reference to the character of the persons performing it. Thus, the only way that one crime differs from another is in the backgrounds and characteristics of its perpetrators. Most if not all white-collar offenders are distinguished by lives of privilege, much of it with origins in class inequality.

3. By organizational culture rather than the offender or offense which overlaps with organized crime. Appelbaum and Chambliss offer a twofold definition: a. Occupational crime which occurs when crimes are committed to promote personal interests, say, by altering records and overcharging, or by the cheating of clients by professionals. b. Organizational or corporate crime which occurs when corporate executives commit criminal acts to benefit their company by overcharging or price fixing, false advertising, etc.

Relationship to other types of crime
Blue-collar crime
The types of crime committed are a function of what is available to the potential offender. Thus, those employed in relatively unskilled environments and living in inner-city areas have fewer "situations" to exploit than those who work in "situations" where large financial transactions occur and live in areas where there is relative prosperity. Blue-collar crime tends to be more obvious and thus attracts more active police attention such as vandalism or shoplifting. In contrast, white-collar employees can incorporate legitimate and criminal behavior, thus making themselves less obvious when committing the crime. Therefore, blue-collar crime will more often use physical force, whereas in the corporate world, the identification of a victim is less obvious and the issue of reporting is complicated by a culture of commercial confidentiality to protect shareholder value. It is estimated that a great deal of white-collar crime is undetected or, if detected, it is not reported.

Corporate crime
Corporate crime deals with the company as a whole and always benefitting the investors or the individuals who are in high positions in the companies or corporations. The relationship white-collar crime has with corporate crime is that they are similar because they both are involved within the business world. Their difference is that white-collar crime benefits the individual involved, and corporate crime benefits the company or the corporation.

One well-known insider trading case in the United States is the ImClone stock trading case. In December 2001, top-level executives sold their shares in ImClone Systems, a pharmaceutical company that manufactured an anti-cancer drug. The U.S. Securities and Exchange Commission investigated numerous top-level executives, as well as Martha Stewart, a friend of ImClone 's former chief executive who had also sold her shares at the same time. The SEC reached a settlement in 2005.[6][7]

State-corporate crime
The negotiation of agreements between a state and a corporation will be at a relatively senior level on both sides, this is almost exclusively a white-collar "situation" which offers the opportunity for crime. Although law enforcement claims to have prioritized white-collar crime,[8] evidence shows that it continues to be a low priority.[9]
When senior levels of a corporation engage in criminal activity using the company this is sometimes called control fraud.

Organized Transnational Crime
Organized Transnational Crime is organized criminal activity that takes place across national jurisdictions and with advances in transportation and information technology, law enforcement officials and policymakers have needed to respond to this form of crime on a global scale. Some examples include human trafficking, money laundering, drug smuggling, illegal arms dealing, terrorism, and cybercrime. Although it is impossible to precisely gauge transnational crime, the Millennium Project, an international think tank, assembled statistics on several aspects of transnational crime in 2009:[6] * World illicit trade of almost $780 billion * Counterfeiting and piracy of $300 billion to $1 trillion * Global drug trade of $321 billion

Occupational crime
Individuals may commit crime during employment or unemployment. The two most common forms are theft and fraud. Theft can be of varying degrees, from a pencil to furnishings to a car. Most employees do steal and the expense is high. Insider trading, the trading of stock by someone with access to publicly unavailable information, is a type of fraud.

Occupational Death
A death that occurs while a person is at work or performing work related tasks. Occupational death is the third-leading cause of death in Canada. An example of occupational death is the death of three workers at the Langley Mushroom farm. The three workers died after inhaling fatal doses of toxic fumes in September 2008. Two other workers were left with brain damage.

Punishment and Penalties for White Collar Crime |
The most frightening part of being a defendant in a white collar criminal case — or any criminal case — is the potential penalties if convicted. Most white collar defendants have no prior experience with the criminal justice system, and the uncertainty of their future looms understandably large in their minds. In addition to criminal penalties, many white collar offenses may give rise to civil lawsuits, brought either by the federal or state government, or by the victims of the offense. Any civil liability imposed as a result of these suits is in addition to, and not a substitute for, the penalties imposed in the criminal case. A white collar defense attorney can give you specific information on the possible penalties in your particular case. Call today to schedule a consultation.

Criminal penalties
The criminal penalties for white collar crimes vary. Most of the laws authorize a monetary fine, a prison sentence or a combination of the two. The criminal laws authorize maximum penalties, which are often quite severe. Most defendants, however, receive less than the maximum sentence. Courts often follow sentencing guidelines, which may vary depending on the jurisdiction. These guidelines are meant to ensure that criminal sentences are uniform, so the sentencing judge is often given very little discretion on the sentence imposed. The guidelines take into account the crime for which the defendant has been convicted, and any prior criminal record of the defendant. In some cases, the court may consider factors that will allow it to depart, or impose a sentence different from the sentence required by the guidelines.
Defendants without a significant criminal record may be sentenced to probation, a suspended jail sentence or a jail sentence far shorter than the maximum. They may have fines levied against them, and may be required to forfeit any profits or pay restitution to their victims.

The "easy time" myth
There is a common belief among many members of the public that defendants convicted of white collar crime get to do "easy time" in comfortable, minimum-security institutions. This is a myth.

While many sentences for white collar crimes are served in minimum-security institutions, there is no guarantee that this will happen. The decision on where a person convicted of a crime serves his or her sentence is usually a matter left to the discretion of the correctional authorities (in the federal system, this is the Federal Bureau of Prisons). While efforts are made to place prisoners in an appropriate facility, there is no certainty that a white collar defendant will always be in a minimum-security prison.

Civil liability
A civil case that arises out of a white collar criminal prosecution could be brought by the government, by the victims of the crime or by both.
A civil action brought by the government might seek disgorgement, or turning over to the government, any profits obtained because of the crime, restitution or repayment, to the victims of the offense or other damages that may be provided by law. In some cases, the government may be able to seek asset forfeiture, which means that anything purchased with the proceeds of the offense would be seized by the government.
Victims of white collar crimes may choose to bring their own civil actions. These actions would seek to recover for any financial losses suffered because of the offense.

Employment and social consequences
In addition to criminal and civil penalties, a person who is convicted of a white collar crime may have difficulty finding employment and face social stigma. Because so many white collar crimes involve deceit or dishonesty, employers may be reluctant to hire an individual who has been convicted of such a crime. In addition, a criminal conviction may prevent a person from obtaining a professional license or be cause for losing such a license.

Further, if a non-United States citizen is convicted of a crime, he or she may face removal and other immigration issues. For example, if a lawful permanent resident, who is lawfully living and working in the United States on a work visa, is convicted of a white collar crime, he or she may be removed. In addition to removal, a conviction may adversely affect a lawful permanent resident 's ability to become a United States citizen.
Speak to a criminal defense lawyer

The potential for civil liability in addition to criminal liability is an added, troublesome factor to consider when preparing to defend a white collar criminal prosecution. It is important to consult with an experienced attorney who has experience with criminal and civil white collar actions to learn more about potential liability.

National Accountability Bureau:
Under Art.199 of Islamic Republic of Pakistan High Court has jurisdiction to issue writ against National Accountability Bureau and its functionaries. The Chairman NAB shall have the, at any stage of the investigation under this Ordinance, to direct that the accused, if not already arrested, shall be arrested. Accused must be informed of the grounds of his arrest. In nutshell, sentences for white-collar crimes may include a combination of imprisonment, fines, restitution, community service, disgorgement, probation, or other alternative punishment. These punishments grew harsher after the Jeffery Skilling and Enron Scandal, when the Sarbanes–Oxley Act of 2002 was passed by the United States Congress and signed into law by President George W. Bush, defining new crimes and increasing the penalties for crimes such as mail and wire fraud. In other countries, such as China, white-collar criminals can be given the death penalty. Questions about sentencing disparity in white-collar crime continue to be debated.

Conclusion:
One common misconception about corporate crime is that its effects are mainly financial. For example, pharmaceutical companies may make false claims regarding their drugs and factories may illegally dump toxic waste. Indeed, the Hooker Chemical Company (later acquired by Occidental Petroleum Corporation) dumped toxic waste into the abandoned Love Canal in Niagara Falls and sold the land without disclosing the dumping. It was sold in the 1950s to a private housing developer, whose residents began experiencing major health problems such as miscarriages and birth defects in the 1970s.

Additionally, employees of a company can become victims of white-collar crime. Regardless of whether they know about their company 's criminal activities or not, employees risk losing their jobs if their employer is charged with a white-collar crime such as fraud or embezzlement, incurs losses, and declares bankruptcy. Another way employees can be victimized occurs when employers are aware of physical harm to their employees.

♣♣♣♣♣♣♣♣♣♣♣♣♣♣♣♣♣THE END♣♣♣♣♣♣♣♣♣♣♣♣♣♣♣♣♣♣♣

Bibliography

1. Sutherland, Edwin (1949). White Collar Crime. Dryden Press. Retrieved 1 June 2012.

2. Clarke, Ronald V. (1997). Situational Crime Prevention: Successful Case Studies (2nd edition). New York: Criminal Justice Press.

3. Friedrichs, David O. (2003) Trusted Criminals: White Collar Crime in Contemporary Society, Wadsworth. 4. Shapiro, Susan P. (1990). "Collaring the Crime, not the Criminal: Reconsidering the Concept of White-collar Crime", American Sociological Review.

Bibliography: 1. Sutherland, Edwin (1949). White Collar Crime. Dryden Press. Retrieved 1 June 2012. 2. Clarke, Ronald V. (1997). Situational Crime Prevention: Successful Case Studies (2nd edition). New York: Criminal Justice Press. 3. Friedrichs, David O. (2003) Trusted Criminals: White Collar Crime in Contemporary Society, Wadsworth. 4. Shapiro, Susan P. (1990). "Collaring the Crime, not the Criminal: Reconsidering the Concept of White-collar Crime", American Sociological Review.