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The term "white collar crime" was introduced by Edwin H. Sutherland in 1939, emphasizing the fact that criminal activity in the United States was to a great extent, taking place in everyday business by respectable individuals of high socio-economic status. The main feature of the crime was violation of trust, carried out while the offender performed his occupational activities (Ball, 2001). The National White Collar Crime Center in 1996, defined the term as "illegal or unethical acts that violate fiduciary responsibility or public trust, committed by an individual or organization, usually during the course of legitimate occupational activity, by persons of high or respectable social status for personal or organizational gain" (Helm Kamp et al, 1996, p.351).
Thesis Statement: The purpose of this paper is to investigate white-collar crime, identify their significance and various types, discuss the related laws and their enforcement, and examine the impact of white-collar crime on society.
White-Collar Crime: The Different Methods and Significance
According to Coleman (1985), white-collar crime is caused by an integration of various factors: motivation to commit the crime, the presence of opportunity, and the removal of ethical beliefs that restrain criminal behavior. Organizational white-collar crimes are of different types under various categories: these consist of fraud and deception, attempting to take control of the marketplace, lack of corporate social responsibility in the disposal of toxic chemicals, violation of human rights and civil liberties, bribery and corruption. Organizational crimes are also related to employee theft such as that of savings accounts, embezzlement of company funds, bribery, evasion of taxes, power brokering, and various large-scale profit-making malpractices in the legal, financial and medical professions.
Croall (1992) adds computer crimes, tax frauds, violating safety norms for employees and the public, stating that the foundations of white-collar crime lie in criminal organizations, entrepreneurial enterprises and various aspects of business activities. Consumer fraud through unethical and illegal methods of manufacturing and selling of sub-standard products for building huge profits forms the most significant of all white-collar crimes (Rosoff et al, 2002).
White-collar crime is considered to be a highly serious form of crime in the United States, next in significance only to face-to-face violence. According to the U.S. Bureau of Justice Statistics (Barnett, 2000), it is estimated that in terms of financial loss, white-collar crime impacts the public more adversely than all other forms of crime combined. Other forms of crime which are collectively dwarfed by the financial costs of white collar crime" (Ball, 2001, p.432) include robbery, burglary, vehicle theft, and others besides extraction of public funds by organized criminal families and drug trafficking networks who make huge profits from illegal dealings.
The Laws Regulating White-Collar Crime, and their Enforcement
The federal government has the authority to regulate white-collar crime in the United States. Detection and enforcement of relevant laws are the responsibility of administrative departments and agencies including the "Federal Bureau of Investigation (FBI), the Internal Revenue Service, the Secret Service, U.S. Customs, Environmental Protection Agency, and the Securities and Exchange Commission" (Siegel, 2008, p.387). Criminal violations are differentiated from civil violations, according to the seriousness of the case, the intent of the perpetrator of the crime, their earlier record, and actions to conceal the crime.
Some of the laws related to white-collar crime include: Antitrust law, Occupational Safety and Health Laws, Environmental Protection Laws, Racketeer-Influenced and Corrupt Organizations (RICO) Law, and several others (Friedrichs, 2009). Enforcement of law and application of legal principles is usually reactive rather than proactive. Thus, law is implemented on complaints, rather than through involvement in activities or monitoring of business procedures. Investigations are carried out by the various federal agencies and the FBI. Attorneys from the "criminal, tax, antitrust, and civil rights divisions of the Justice Department" (Siegel, 2008, p.387) handle cases of criminal prosecution. When criminal prosecutions cannot be carried due to insufficient evidence, the case is handled civilly or administratively by some other federal agency.
In antitrust or merchandizing fraud cases, the Federal Trade Commission can issue a cease and desist order. With significant increase in the number of state-funded technical assistance offices, more than forty states offer such services. In controlling consumer fraud and a great many other areas, law enforcement officials have made progress on the state and local levels (Siegel, 2008).
The Impact of White-Collar Crime on Society
Financial losses to individuals and organizations are extensive, due to white-collar crime. An example was the crash of the savings and loans (S & L) industry in the 1980s in the United States. The exact cost running into trillions of dollars cannot be estimated, since it depends on future interest rates paid on loans taken by the government to cover the shortfall. Individual taxpayers lost amounts equivalent to being robbed of several hundred dollars each month for the next twenty years (Ball, 2001).
Although the financial losses caused by white-collar crime are enormous, "even greater damage is done in terms of injury, debilitation, and death inflicted upon American citizens" (Ball, 2001, p.433). In relation to these harmful effects also, the damages are far greater than the total of all other forms of crime. Some of the worst dangers confronting the American public are caused by environmental crimes such as illegal pollution of water and air, and the dumping of toxic waste causing soil pollution. To a great extent the public and workers are exposed to the emissions and residual waste products of manufacturing processes, which are illegal and dangerous substances such as cotton dust, radioactivity and several others. These cause inestimable damage to the health of the population, causing heavy financial strain for medical treatment, and also leading to early death of several tens of thousands of people. Asbestos poisoning results in approximately 10,000 deaths every year.
Some criminologists believe that the greatest damage to the public is done by the "erosion and corruption of American society from cancerous criminal activity" (Ball, 2001, p.433) by important personnel in the country's economic and political organizations. These cause even more severe impacts on the public than the financial losses and increasing prevalence of injury, disease and death. While the Uniform Crime Reports indicate a decline in other forms of crime such as street crime, but in the case of white-collar crime there is a rapid increase, with new methods being created steadily. For example, computer crime and credit card frauds which were unheard of twenty years ago, are shaking the roots of the country's economic system. Edelhertz (1970) reiterates that the monetary impact of white-collar crime may be measurable, but the psychological, social and economic costs are beyond estimation, since the crime is deep-rooted in the economic fabric of society.
This paper has highlighted white-collar crime. Evidence from the research indicates that as compared to other crimes, white collar crimes are the most significant in terms of financial losses, injury, disease and death caused to the public. Numerous types of white-collar crimes exist, and they are increasing in number, in contrast to other types of crimes which are declining in incidence. The crimes occur in a wide range of institutions and organizations including business, the medical field, government, religious organizations, and others. Of all the types of white-collar crimes, consumer fraud is the most prevalent, with high profits made on substandard or dangerous products. Corporate irresponsibility resulting in environmental offenses and adverse impacts on occupational health and safety are other major areas of white-collar crime.
Various laws are enforced by federal administrative departments and agencies to check the prevalence of white-collar crime. The economic, environmental and human consequences of the crime are inestimable. Hence, urgent and effective measures need to be taken by law enforcement, to stem the increasing damage being done.