Chapter 10 White-Collar and Organized Crime

Introduction ► White-collar crimes – criminal offenses committed by people in upper socioeconomic strata of society, usually in the course of the occupation or profession of these people. ► These include: antitrust violations, bid rigging, price fixing, money laundering, insider trading, and tax fraud.

Introduction Continued: ► Organized crime – offenses committed by people who conduct their business through illegal enterprises.

Legal Principles Governing White- Collar Crimes ► Scope of Authority – corporations are held criminally liable for the acts of their agents committed within the scope of an agent’s authority within his office or employment.

Common Federal White-Collar Crimes ► Sherman Antitrust Act – makes it a crime to enter any contract or engage in any combination or conspiracy in restraint of trade. This act protects and preserves a system of free and open competition. To prove a criminal violation of the act the government must establish: 1. 2 or more entities formed a combination or conspiracy 2. combination or conspiracy produces an unreasonable restraint of trade or commerce 3. restrained trade or commerce is interstate in nature 4. defendant’s general intent to violate the law

Common Federal White-Collar Crimes Continued: ► Computer Abuse Amendments Act – it is a crime to knowingly cause the transmission of a program, information, code, or command in interstate commerce with an intent to cause damage to a computer exclusively used by a financial institution or the US government.  Also a federal crime to knowingly with intent to defraud produce, use, or traffic in counterfeit access devices which include cards, plates, codes, and electronic serial numbers, etc..

Common Federal White-Collar Crimes Continued: ► False Statement Act – federal statute making it a crime for a person to knowingly make a false and material statement to a U.S. government agency to obtain a government benefit or in connection with performing work for the government. ► False Claims Act – federal statute that makes it unlawful for a person to knowingly present a false or fraudulent claim to the U.S. government.

Common Federal White-Collar Crimes Continued: ► Mail Fraud – scheme devised or intended to defraud or to obtain money or property by fraudulent means and the use or causing to use the mails in furtherance of the fraudulent scheme. ► Money Laundering Control Act – 1986 act of Congress prohibiting the act of disguising illegal income to make it appear legitimate.

Common Federal White-Collar Crimes Continued: ► Securities and Exchange Act – 1934 act of Congress regulating the sale of securities in interstate commerce. ► Churning – applied to transactions in a customer’s account without regard to the customer’s investment objectives simply to generate commissions for the broker.

Organized Crime ► Organized Crime Control Act – 1970 federal law dealing with organized crime. Title IX of the act is entitled Racketeer Influenced and Corrupt Organizations, also known as RICO.  The new RICO statute provided for forfeiture of property used in criminal enterprises and permitted the government to bring civil actions against such enterprises.

Organized Crime ► Enterprise – any individual, partnership, corporation, association, or other legal entity, and any union or group of individuals associated in fact although not a legal entity. RICO was conceived as a weapon for prosecution for organized crime, but it has become the basis of prosecution against the white-collar criminal as well. Prosecutors have difficulty in securing convictions of organized crime leaders. Through RICO a prosecutor can circumvent statutes of limitation and seek to inflict multiple punishment for the same offenses. Through RICO a prosecutor can circumvent statutes of limitation and seek to inflict multiple punishment for the same offenses.