Responding to the Challenge of White-Collar Crime Essay

August 12, 2022

Using the questions in the Reflecting on Your Capstone model above, discuss your experience this term. Did you achieve your goals for the final product that you set at the beginning? Do you expect to receive any feedback from the stakeholders in this project? If so, what might that be?

Note, this is an opinion, there is no right or wrong answer.

Discuss similarities and differences of this experience with your colleagues.

Unit 8 DB: Identity Theft Article

After having reviewed many traditional forms of white-collar crime during the course, we end the course with a look towards the future. Although identity theft has been a popular topic in recent years, its exponential growth warrants our study of it here.

Thus, I have selected two readings recently published, one from Police Chief magazine (the official publication of the International Association of Chiefs of Police) and the second from the FBI Law Enforcement Bulletin (the official publication of the FBI).

I did this to provide each of you with an example of what current police practitioners and decision makers are receiving on their desks so that you have an understanding for what is currently happening in law enforcement.

As current or future criminal justice practitioners, what are your responses to these two articles? What is you view of the future of this issue? What can the police do to combat it? What about individual responsibility to protect oneself from becoming a victim?

Responding to the Challenge of White-Collar Crime

The first step in any program for a more effective response to white collar crime calls for an elevated level of consciousness

Criminologists can play a role in fostering broader attention to white collar crime in the media by engaging in news making criminology which calls for criminologists to:

Appear on television and radio shows, write for and make themselves available for interviews with the press to reach a boarder public audience

Policy Options for Responding to White Collar Crime

White collar crimes inspire everything from outrage to pragmatism to apathy

Historically, the perception of “folk devils” and “moral panics” has focused more upon street crime than “suite” crime

White collar crimes differ than conventional crimes because they are closely associated with productive, desirable activities

Policy Options for Responding to White Collar Crime

One concern is that excessively restrictive and punitive responses toward such crime will deter such productive activities more than it will deter prohibited activities

Responses to white collar crime may be directed toward:

Structural, organisational or individualistic levels

Social control, opportunity structures or cognitive states

Persuading, appealing to reason or offering practical inducements, or relying on threats of intervention and punishment

Responding to White Collar Crime as a Moral Issue

Moral outrage is an understandable response to white collar crime

That large and powerful corporations would knowingly flout the law and defraud or endanger the lives of employees, customers and citizens is outrageous

Anger and disgust are natural reactions to the greed of educated or affluent professionals, entrepreneurs, and retailers who engage in such activities

Business Ethics in the Curriculum

One response to the perception of an ethics crisis in U.S. business was the much wider introduction of business ethics courses

Business ethics courses first began to be introduced into the curriculum in the 1950’s

Between the 1970’s and 1980’s, educational institutions increased five fold in the number of business ethics courses offered

Business Ethics in the Curriculum

The corporate crime scandals of the early 2000’s inevitably inspired a surge in demand for business ethics courses

Early in the 21st century, significant numbers of students began to express concern about the absence of attention to ethics in the business school curriculum

Unfortunately, it is not clear that integrating business ethics into the curriculum will measurably elevate the ethical behaviour of business people

Business Ethics within the Business World

Business ethics has become a big business itself

Many publications and conferences address business ethics

There are 3 ways in which businesses get themselves into trouble:

Ethical problems

Market failures

Liquidity problems

Business Ethics within the Business World

A code of ethics is the single most common element of corporate ethics programs

The success of any program incorporating a code of conduct significantly depends on the extent to which the targeted parties are consulted on and help formulate the codes rather than simply having the codes imposed upon them

Securing Compliance and Sanctioning White Collar Crime

A variety of specific sanctions can be used to respond to white collar crime

Sanction is most commonly equated with punishment

Sanctions can be:

Positive Grants, bounties, fees, loan guarantees, prizes and awards.

Negative Imprisonment, fines and occupational disqualification.

Law and the Coercive Response to White Collar Crime

The use of criminal law in response to white collar crime is generally more open to dispute than it is with respect to conventional crime

Since the 1970’s, the criminal law has in fact been more broadly applied to corporate wrongdoing such as worker safety violations, toxic dumping, and environmental pollution

Simpson (2002) studied corporate crime deterrence

She concluded that the criminal law has basic limitations as an effective device for addressing corporate crime

Civil Suits and Penalties

The use of civil procedures allows prosecutors to avoid meeting the criminal law’s stringent standards for establishing proof and culpability

The severity of judgements that can be imposed in civil proceedings is comparable to or exceeds criminal penalties

Collecting a substantial civil judgement is far more economical than imposing prison sentences

Civil Suits and Penalties

Private parties who have been injured by white collar crime offenders have always had the option of a civil lawsuit

Historically, corporations have often found it less costly to contend with civil lawsuits than to limit profits by fully complying with the law or correcting the hazards they created

Compliance versus Punitive Approaches to Corporate Crime

Ongoing debate centres on whether a response to white collar crime that relies on invoking criminal law as punishment is more appropriate and effective than a cooperative regulatory response that attempts to avoid using criminal sanctions

The compliance approach favours cooperative strategies and is rooted in the assumption that a cooperative strategy is both a practical necessity and a more effective way of limiting the harm of corporate activities

Compliance versus Punitive Approaches to Corporate Crime

For compliance to be achieved effectively, businesses and corporations have to be persuaded that the rules and laws directed at them are warranted and widely supported

Advocates argue that the criminalization of harmful corporate activity is long overdue and that the imposition of tough, punitive sanctions is either an essential component or the only strategy that is likely to have an impact on corporate crime

Deterrence and White-Collar Crime

Even though deterrence is surely one of the central objectives of the criminal justice system, little consensus exists on how and whether legal sanctions have a deterrent effect

Deterrence is the deliberate decision to refrain from engaging in illegal activity out of fear of legal sanctions

Deterrence and White-Collar Crime

Any theory of deterrence adopts the classical criminological model of human beings as rational creatures capable of making a calculated, cost-benefit analysis of prospective criminal activity

It is difficult to demonstrate conclusively that the threat of criminal sanctions deters white collar crime

Top management may be guided more by self-interest than by rational determinations of the corporation’s interest

Deterrence and White-Collar Crime

Altogether, we still lack an even remotely adequate base of knowledge and understanding of how complex of factors involved in corporate behaviour interact and of just which policies actually deter corporate illegality

Rehabilitation, Probation, and Enforced Self-Regulation

Rehabilitation is the most recent rationale for penal response to crime

It provides convicted offenders with the education and job training they need to be able to support themselves by legitimate activities

For many white-collar offenders, their educational credentials and job skills were often instrumental in putting them in a position to commit crimes in the first place

Rehabilitation, Probation, and Enforced Self-Regulation

To the extent white collar offenders become rehabilitated in prison, such rehabilitation is much more likely to be a personal realisation of the wrongfulness of their conduct and a wilful repudiation of such conduct in the future

Probation

Probation has typically been regarded as more appropriate for individual white-collar offenders than for conventional offenders

The white-collar offender is unlikely to be viewed as a direct physical threat to the community

He or she is also more likely to be viewed as capable of remaining in the community as a constructive, gainfully employed citizen

The U.S. Sentencing Commission established organisational probation as an option

Enforced Self-Regulation

John Braithwaite has advocated enforced self-regulation by corporations

He argued that a restorative justice system that privileges cooperative initiatives may deter, incapacitate, and rehabilitate more effectively than a punitive system

He contends that although corporations cannot typically be expected to adopt self-regulation on an entirely voluntary basis, they will be responsive to enforced self-regulation

Fines, Restitution and Community Service

White collar crimes are mainly thought of as a form of economic crime

Economic sanctions have been especially commonly imposed on convicted offenders

These sanctions can take the form of:

The forfeiture of assets

Mandatory restitution to victims

Criminal or civil fines

Fines, Restitution and Community Service

Fines can be punitive and even rehabilitative if they enable the corporation to pay for the harm done and compensate victims

Many additional issues are involved in imposing fines, including:

Challenges to setting the appropriate amount

Determining whether the fine should be based in losses to society or gains to offenders

Sentencing Guidelines for Fines

The U.S. Sentencing Commission’s attempts to establish guidelines for fines took onto account various factors:

Amount of loss, the offence “multiple” (difficulty of detecting and prosecuting, to ensure that the fine is both a deterrent and a just punishment), and the enforcement costs involved

Taken together, these factors produce a total monetary sanction of restitution, forfeitures and fines

Sentencing Guidelines for Fines

Various alternatives to traditional fines have been proposed:

Equity fines, days fines, instalment fines, pass-through fines and super added liability

Equity fines call for convicted corporations to issue equity securities and place them with a state-run victim compensation board

Restitution

White collar offenders are especially well positioned to make restitution to victims and to pay compensation for the losses they have caused

Community Service

Individuals and organisations may be required to perform community service

The most appealing dimension of this sanction is that a direct, positive benefit accrues to the community without significant costs

Occupational Disqualification

Occupational disqualification, or loss of license, can be a fairly drastic penalty for an individual

It is punitive and intended as a deterrent

It also incapacitates offenders by depriving them of opportunities for committing their occupationally related crimes

If occupational disqualification is to be effective, it must be administered from outside the corporation because corporations may be reluctant to disqualify their own executives

Incarceration

Few white-collar criminals are sent to prison

Rational agreements against imprisoning white collar offenders are many, but if it is indeed true that corporate executives and other white collar offenders fear imprisonment most, then incarceration is probably necessary in at least some cases

Organisational Reform
and Corporate Dissolution

Some of the most harmful white-collar crime is committed by or through an organisation

An ongoing debate centres on whether we should punish only the capable individual executives within an organisation or the organisation itself

Prosecutors may sometimes determine that both the organisation and some of its executives are appropriate targets

Organisational Reform
and Corporate Dissolution

Perhaps the most extreme sanction that can be imposed on a corporation is “capitalistic punishment” or the forced dissolution of the corporation

Such a sanction would seem to be justified for corporations involved in massively harmful activities over some extended period

Controlling Governmental Crime

Government crime has been treated here as a cognate form of white-collar crime

Such crime is extraordinarily difficult to control because those who commit the crimes also often have disproportionate power to shield themselves from criminal investigation and prosecution

International tribunals would have both the jurisdiction and the means to mount an effective response to state crime

Controlling Governmental Crime

The existing means of financing political campaigns are widely recognized to promote corrupt arrangements between public officials and corporations or other entities that donate money to their campaigns

Even though campaign-financing reforms have been undertaken, they hardly eliminate the problem of corrupt public officials

The revolving-door syndrome

Structural Transformation
as a Response to White Collar Crime

In an optimistic view, a substantial reduction of white-collar crime requires a transformation of society’s political, economic, and cultural structure

Critics regard the following to be fundamental factors contributing to socioeconomic inequality

The immense harms caused by the current model of capitalism must be fully recognised and addressed

A global movement has been a major force in challenging a world dominated by transnational corporations

Unit 8 DB: Identity Theft Article

A Chief’s View: Identity Theft: Resources for Police

By Stephen White, Chief of Police, Doylestown Township, Pennsylvania, and Monique Einhorn, Attorney, Identity Theft Program, Federal Trade Commission, Washington, D.C.

Identity theft seems to be on everyone’s radar screen. A 2003 study by the Federal Trade Commission found that identity theft affects almost 10 million consumers a year. Most states have enacted their own identity theft laws to assist law enforcement fight this crime.

When Congress criminalised identity theft in October 1998, it directed the Federal Trade Commission (FTC) to establish a national program that included a centralised complaint and education service for victims of identity theft.

Today, the FTC’s Identity Theft Program attacks the crime on three fronts: it coordinates victim assistance and education efforts; it assists law enforcement by providing investigative resources and facilitating information sharing; and it promotes prevention efforts and best practices through industry outreach.

These resources can make it easier for police to work with victims and investigate the crime. (Continued on page 38)

What’s New the Fair and Accurate Credit Transactions Act (FACT Act), a new federal law, provides identity theft victims with important new rights and remedies.

Although the identity theft provisions are mostly directed at victims’ recovery, they affect how police officers deal with this pernicious crime. The law makes police reports more important than ever as a tool to help victims recover.

That is because the new rights and remedies-such as blocking fraudulent trade lines on credit reports and obtaining the suspect’s credit application-are available only to victims who present a police report to help prove that they are victims of fraud.

One provision of the FACT Act that simplifies the investigation of identity crime relates to the documents used to open fraudulent accounts.

For example, if a company extends credit to a suspect using the victim’s personal information, the victim now can obtain the identity theft related transaction records at no charge from that company-but only if the victim provides a copy of a police report and other required documentation.

Law enforcement also benefit because investigators can get these documents without a subpoena if a victim authorises, in writing, that the business send a copy of the records directly to the officer.

Police reports are the first step in helping identity theft victims clear their names and recover from identity theft. Here’s what happens after a victim obtains a police report:

· Credit bureaus must block the reporting of inaccurate information identified by the victim as resulting from identity theft.

· Businesses where fraudulent accounts were opened must give victims (and police, at the victim’s written request) copies of applications and business records relating to transactions that the victim identifies as resulting from identity theft. This means that law enforcement agencies can obtain these documents without a subpoena.

· Certain information on a credit report that a victim claim is inaccurate because of identity theft can no longer be reported by a business to a credit reporting company.

· The big three nationwide credit reporting companies (Experian, Equifax, and TransUnion) must place an extended fraud alert in the victim’s credit file for seven years. It entitles the victim to free credit reports.

FTC Resources for Helping Victims Because prevention is always the first line of defense, the FTC has created a virtual library of information about identity theft for the general public, as well as for law enforcement. These materials are available to police departments as they coordinate community outreach efforts.

Local law enforcement outreach efforts to address identity theft can lead to real results. Law enforcement officers can take the following steps:

· Direct victims to the FTC’s ID theft Web site at www.consumer.gov/idtheft , where they can learn how to minimize the effects of the fraud, and find the ID theft affidavit.

· Advise consumers to read ID Theft: What’s It All About? and Take Charge: Fighting Back against Identity Theft. They can use the affidavit when disputing fraudulent accounts with the nationwide credit reporting companies or a business that extended credit to a suspect using the victim’s name. Many companies and all three credit reporting companies accept the affidavit.

· Order publications and the affidavit from publications@ftc.gov. The publications also are available on CD-ROM; agencies can print them with their own logo.

· Download the materials on the FTC’s Web site in English or Spanish.

· Encourage victims to file identity theft complaints with the FTC online at ( www.consumer.gov/idtheft ). Victims who don’t have Internet access can call the FTC’s toll-free ID theft hotline at 877-ID THEFT (TTY: 866-653-4261). It’s open Monday to Friday, 9:00 a.m. to 8:00 p.m., Eastern Time.

Partnerships Are Practical Since 1999 the FTC has developed and managed the nation’s central repository of victim complaint data on identity theft. The Identity Theft Data Clearinghouse is part of the FTC’s Consumer Sentinel system. It contains more than 700,000 identity theft complaints.

In addition to the victim-reported complaints, the clearinghouse contains complaint data entered by police officers and representatives of state and federal agencies.

Because it is the central source for identity theft complaints, the clearinghouse can facilitate cross-jurisdictional investigations and enable law enforcers across the country to spot trends and share critical information. For example, users can tag complaints with an alert to flag a particular suspect or address.

If other clearinghouse users retrieve that complaint, they will know that a fellow officer may have more information about the tagged item and they will have that officer’s contact information. The clearinghouse also allows users to review a group of complaints and spot trends or patterns that would not be apparent from one individual complaint.

The clearinghouse database has a custom search feature. For example, police working a case may have a cluster of suspect addresses.

The FTC’s identity theft investigator can search the clearinghouse to find additional information associated with those addresses. Or, in the course of an investigation, officers may discover a cache of social security numbers in a suspect’s possession.

The FTC can search the clearinghouse to see if it contains victim complaints associated with these numbers. If so, the FTC may be able to provide law enforcers with additional information. For help with a hot search, send an e-mail message to ( idtsearch@ftc.gov ).

The FTC also has worked with the International Association of Chiefs of Police and other law enforcement organisations to offer regional one-day seminars across the nation to give law enforcement managers information and tools to help generate successful identity theft investigations.

These workshops bring together police officers, prosecutors, representatives of state departments of motor vehicles, and industry fraud investigators to answer common questions: What information do I need to obtain from the victim? Whom should I contact for specific information?

What tools can I use to investigate and build a case? What’s the best way to package a case for prosecution? More than 1,800 law enforcement officers have attended these seminars to date. This year, training will be offered in Atlanta, Georgia; Santa Fe, New Mexico; and Columbus, Ohio.

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