1. Enterprise Crime: White-Collar Crime and Organized Crime
Chapter Thirteen
Enterprise Crime:
White-Collar Crime and Organized Crime

2. Involves illicit entrepreneurship and commerce
Enterprise Crime
Involves illicit entrepreneurship and commerce
People twist the legal rules of commercial enterprise for criminal purposes
Corrupts the free market system
Can be divided into two distinct categories:
White-collar crime
Organized crime
Both forms can involve violence

3. White-Collar Crime
Any business-related act that uses deceit, deception, or dishonesty to carry out criminal enterprise
Involves illegal activities of people and institutions whose acknowledged purpose is illegal profit through legitimate business transactions
In the past it was considered only corporate crime
Now include middle-income Americans

4. Extent of White-Collar Crime
Difficult to determine the true extent
According to the White Collar Crime Center:
About half of households have experienced at least one form of white collar victimization each year
About 2/3 of all Americans will experience at least one white collar victimization in their life
Most common white collar victimizations include pricing fraud, credit card fraud, directly affected by corporate fraud
2/3 of victims report the incident
30% report to law enforcement agency

5. Components of White-Collar Crime
Stings and swindles
Chiseling
Individual exploitation of institutional position
Influence peddling and bribery
Embezzlement and employee fraud
Client fraud
Corporate crime

6. Stings and Swindles
A white-collar crime in which people use their institutional or business position to trick others out of their money

7. Chiseling
Using illegal means to cheat an organization, its consumers, or both, on a regular basis
Examples:
Professional chiseling
Securities fraud

8. Influence Peddling and Bribery
Using one’s institutional position to grant favors and sell information to which one’s co-conspirators are not entitled
Occurs in government as well as business

9. Embezzlement and Employee Fraud
Use of one’s position to embezzle company funds or appropriate company property for themselves
The company or organization is the victim
Committed by both blue-collar workers and management

10. Client Fraud
Theft by an economic client from an organization that advances credit to its clients or reimburses them for services rendered
Examples:
insurance fraud
credit card fraud
fraud related to welfare or Medicare programs
tax evasion

11. Corporate Crime
When a powerful institution or its representatives violate the laws that restrain these institutions from doing social harm or require them to do social good
Examples:
price fixing
illegal restraint of trade
false advertising
practices that violate environmental protection statutes

12. Causes of White-Collar Crime
Rational Choice/Greed
Rational Choice/Need
Rationalization/Neutralization
Cultural
Self-control

13. Rational Choice Greed Need
Greedy people choose to take shortcuts to acquire wealth
Most believe they will not get caught
Need
Some people turn to crime to fulfill a financial or psychological need

14. Rationalization/Neutralization
Use of rationalizations by offenders to resolve the conflict experienced over engaging in illegal behavior

15. Corporate Culture
Some business organizations promote white collar criminality
Place excessive demands on employees while maintaining a business climate tolerant of employee deviance
Enron

16. Self-Control
The motives for white-collar crimes are the same as for other criminal behaviors
Offenders have low self-control and are inclined to follow momentary impulses without considering long-term consequences

17. White-Collar Law Enforcement Systems
The Federal government has the authority to regulate white-collar crime
State and local agencies are now combating white-collar crime too
Controlling White-Collar Crime
Compliance strategies
methods of controlling white-collar crime that rely on the threat of economic sanctions or civil penalties to control potential violators, creating a marketplace to obey the law
Deterrence
detect criminal violations, determine responsibility, and penalize offenders to deter future violations

18. Organized Crime
Illegal activities of people and organizations whose acknowledged purpose is profit through illegitimate business enterprise
General characteristics
Conspiratorial activity
Continuous commitment of primary members
Economic gain is the primary goal (also power and status)
Not all activities are illicit
Use predatory tactics
Groups are quick and effective in controlling and disciplining
Not always the “Mafia”
Does not include terrorists dedicated to political change

19. Activities of Organized Crime
Narcotics distribution
Loan sharking
Prostitution
Gambling
Theft ring
Pornography
Stock market manipulation

20. The Concept of Organized Crime
Alien Conspiracy Theory
The belief, adhered to by the federal government and many respected criminologists, that organized crime is a direct offshoot of a criminal society that was imported to the U.S. by Europeans who have a policy of restricting membership to people of their own ethnic background
The Mob: Cosa Nostra
Some feel the “real” organized crime is made up of 25 Italian dominated families
Gambino, Lucchese, Bonanno, Genovese families
Made men

21. Contemporary Organized Crime Groups
Now organized crime groups are more considered a loose confederation of ethnic and regional crime groups
Chicano
Hells Angels Motorcycle Club
Middle Eastern
Chinese
African criminal enterprises
Balkan criminal organizations
Eastern Europe

22. Controlling Organized Crime
Racketeer Influenced and Corrupt Organization Act (RICO)
Allows prosecutors to bring additional charges against people engaged in 2 or more acts prohibited by 24 existing federal and 8 state laws
Features monetary penalties that allow confiscation of all profits from criminal activities
Intended for use against organized criminals; also used against white-collar offenders

23. The Future of Organized Crime
Successful arrests and prosecution are an indication that the traditional organized crime syndicates are in decline
The “Mafia” had been hurt by changing values in U.S. society
There are still new groups thriving
Always opportunities for illegal practices and huge profits
Always demand for illegal goods and services
Internet provides for new types of organized crime