Enterprise Crime

Enterprise Crime

White Collar Crime
1. Illegal activities of people and institutions whose acknowledged purpose is profit through legitimate business transactions.
2. In the late 1930s Edwin Sutherland first used the phrase "white-collar crime" to describe the criminal activities of the rich and powerful. He defined white-collar crime as "a crime committed by a person of respectability and high social status in the course of his occupation.
3. Experts place its total monetary value in the hundreds of billions of dollars, far outstripping the cost to society of any other type of crime.
  1. In 2009, investor Bernard Madoff was convicted of a fraudulent scheme that resulted in investor losses estimated at $65 billion; Robert Allen Stanford, owner of Stanford Financial Group and other affiliated companies, was charged with defrauding investors of approximately $7 billion (chiseler)
4. White-collar fraud - people using their institutional or business position to trick others out of their money .
  1. Pyramid schemes - These schemes involve selling phony franchises.
  2. Repair frauds - Shady contractors offer unusually low prices for expensive repairs and then use damaged or used merchandise on the job.
  3. Contract fraud - People are urged to sign long-term agreements but are not informed that the small print included on the sales contract obligates them to get high-priced services they did not really want in the first place. Another ploy is to trick the victim into thinking the contract is from a legitimate vendor because it has a familiar look.
5. Chiseling - regularly cheating an organization, its consumers, or both.
  1. Medical Chiseling - Pharmacists have been known to alter prescriptions or substitute low-cost generic drugs for more expensive name brands.
  2. Financial Chiseling - A lot of chiseling takes place on the commodities and stock markets, where individuals engage in deceptive schemes to defraud clients.
    1. Churning - A stockbroker manipulates a client's account by repeated, excessive, and unnecessary buying and selling of stock.
    2. Front running - A broker places personal orders ahead of a customer's large order to profit from the market effects of the trade.
    3. Bucketing . A broker confirms an order to a client without actually executing it and then waits to see how the stock performs. If the stock price increases, the customer is charged the higher price; if the stock price goes lower, the broker buys the stock at that price, places it in the customer's account at the higher price, and keeps the difference.
    4. Insider Trading - Illegal buying of stock on the basis of information provided by someone who has an interest in the company.
6. Exploitation - the victim has a clear right to expect a service, and the offender threatens to withhold the service unless an additional payment or bribe is forthcoming.
7. Influence Peddling - Using an institutional position to grant favours and sell information to others who are not entitled to it.
  1. Payola - the practice of record companies paying radio stations to play songs without making listeners aware of the bribes.
8. Embezzlement
  1. Blue Collar Fraud - Pilferage - Theft of company property by employees.
  2. Management Fraud - Converting company assets for personal benefit; fraudulently receiving increases in compensation (such as raises or bonuses); fraudulently increasing personal holdings of company stock; retaining one's present position within the company by manipulating accounts; and concealing unacceptable performance from stockholders.
9. Client Fraud
  1. Health care fraud - techniques as "ping-ponging" (referring patients to other physicians in the same office), "gang visits" (billing for multiple services that were not actually provided), and "steering" (directing patients to particular pharmacies that give the doctor a kickback).
  2. Tax Evasion - "Passive neglect" means simply not paying taxes, not reporting income, or not paying taxes when due. On the other hand, "affirmative tax evasion," such as keeping double books, making false entries, destroying books or records, concealing assets, or covering up sources of income, constitutes felony.
10. Corporate Crime
  1. Illegal restraint of trade - A contract or conspiracy designed to stifle competition, create a monopoly, artificially maintain prices, or otherwise interfere with free market competition. Sherman Antitrust Act.
  2. Price fixing - Two or more business competitors conspire to sell the same or similar products or services at an agreed-on price. The purpose: to maximizing prices, reduce the costs of competition, and sell the product at a price higher than would be possible with normal competition
  3. Deceptive pricing - contractors provide the government or other corporations with incomplete or misleading information on how much it will actually cost to fulfill the contracts on which they are bidding, or use mischarges once the contracts are signed.
  4. False claims advertising - knowingly and purposely advertise a product as possessing qualities that the manufacturer realizes it does not have,
  5. Worker safety/environment - Illegal disposal of hazardous waste, export of hazardous waste without the permission of the receiving country, Illegal discharge of pollutants to a water, removal and disposal of regulated asbestos-containing materials in a manner inconsistent with the law and regulations, Illegal importation of certain restricted or regulated chemicals, tampering with a drinking water supply, mail fraud, wire fraud, conspiracy and money laundering related to environmental criminal activities.
11. Theories
  1. Rationalisation - Offenders use these and other rationalizations to resolve the conflict they experience over engaging in illegal behavior. Rationalizations allow offenders to meet their financial needs without compromising their values.
  2. Corporate culture view - some business enterprises cause crime by placing excessive demands on employees, while maintaining a business climate tolerant of employee deviance.
  3. Self control view - White-collar criminals have low self-control and are inclined to follow momentary impulses without considering the long-term costs of such behaviour.
12. Travis Hirschi and Michael Gottfredson claim white-collar crime is relatively rare because, as a matter of course, business executives tend to hire people with self control.
Cyber Crime
1. Any act of criminal enterprise that involves the use of communication, computer, and Internet networks
2. Cyber theft
  1. Computer fraud - Theft of information, "Salami" fraud (the perpetrator carefully "skims" small sums from the balances of a large number of accounts), software theft, manipulation of accounts/banking systems, corporate espionage.
  2. Pornography & prostitution - The number of visits to pornographic sites surpasses those made to Internet search engines.
  3. Denial of service attack - ttempt to extort money from legitimate users of an Internet service by threatening to prevent the user from accessing the service.
  4. Distributing dangerous drugs - 80% of websites offer prescription drugs for sale without proof of a prescription.
  5. Illegal copyright infringement - Warez - pirated software illegally obtained, stripped of its copyright protections and posted to download.
  6. Internet securities fraud - Market manipulation, fraudulent offerings of securities, Illegal touting.
  7. Identity theft - a person uses the Internet to steal someone's identity and/or impersonate the victim to open a new credit card account or conduct some other financial transaction. Phising.
  8. Etailing fraud - failure to deliver on promised purchases or services, and others involve the substitution of cheaper or used material for higher-quality purchases.
3. Cyber vandalism
  1. Viruses, worms (self replicate), trojan horses, web defacements.
  2. Stalking - using the Internet, email, or other electronic communications devices to stalk another person.
  3. Cyber bullying - willful and repeated harm inflicted through the medium of electronic text.
4. Cyber terrorism
  1. An effort by covert forces to disrupt the intersection where the virtual electronic reality of computers intersects with the physical world.
Organised Crime
1. Illegal activities of people and organizations whose acknowledged purpose is profit through illegitimate business enterprise.
2. It has conspiratorial activity involving the coordination of numerous people in the planning and execution of illegal acts or in the pursuit of a legitimate objective by unlawful means
3. It appeals to greed to accomplish its objectives and preserve its gains.
4. It has economic gain as its primary goal, although power and status may also be motivating factors, employs predatory tactics, such as intimidation, violence, and corruption.
5. Its activities are not limited to providing illicit services. They include such sophisticated activities as laundering illegally acquired money through legitimate businesses, land fraud, and computer crime.
6. It employs predatory tactics, such as intimidation, violence, and corruption. It appeals to greed to accomplish its objectives and preserve its gains.
7. By experience, custom, and practice, organized crime's conspiratorial groups are usually very quick and effective in controlling and disciplining their members, associates, and victims.
8. Most income comes from narcotics distribution, loan-sharking (lending money at illegal rates), prostitution, gambling, theft rings, pornography,
9. Alien conspiracy theory - organized crime is a direct offshoot of a criminal society—the Mafia —that first originated in Italy and Sicily and now controls racketeering in major U.S. cities.
10. One contemporary change in organized crime is the interweaving of ethnic groups into the traditional structure. African American, Latino, and Asian racketeers now compete with the more traditional groups, overseeing the distribution of drugs, prostitution, and gambling in a symbiotic relationship with old-line racketeers.
11. Eurasian Crime Groups Eastern gangs trace their origin to countries spanning the Baltics, the Balkans, Central/Eastern Europe, Russia, the Caucasus, and Central Asia. Although ethnically based, they work with other ethnic groups when perpetrating crimes. Trading in illegal arms, narcotics, pornography, and prostitution, they operate a multibillion-dollar transnational crime cartel.
12. Racketeer Influenced and Corrupt Organization Act (RICO) - Legislation that enables additional charges against people engaged in 2 or more acts already prohibited.

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	Created by Wendy Frogley about 10 years ago