War Crimes and White Collar Crime - Term Paper Example

War Crimes Introduction The unabated notion of globalization and thriving competition among the commercial s are frequently observed as involved in different unlawful practices, violating the specified legal codes of conduct. A number of corporate managers and/leaders in the recent business environment have been observed to be involved in such unlawful practices and further lead towards the ultimate collapse of organization, following their criminal intent and selfish desires (Weissmann & Block, 2007). In relation to the recent observation of the corporate executives, ‘White Collar Crime’ has become an emerging issue for the countries that have further triggered numerous issues and have further led to materialize collapse of the organizations (Simpson, 2011). The term, ‘white collar crime’ is generally defined as a wide set of criminal activities involving unlawful acts, with high degree of restraint to overlook personal desires and gains, keeping organizational interests at stake. In various scenarios, the crime is often viewed as conducted by the white collar executives to gain competitive advantages over the rivals associated within a common business industry or market. The most common and widely accepted white collar crimes can be characterized into different types such as accounting and auditing fraud, money laundering and regulatory policy discrimination practices among others (Berkeley Journal of Criminal Law, 2009; Braithwaite, 1985). Correspondingly, the primary focus of this paper is to critically assess the influence of white collar crimes on the regulatory codes with different negative implications of this particular issue on the current business environment. Moreover, the paper also provides an in-depth understanding about the various ways corporate managers have become engaged in different illegal endeavors in the US government agencies and armed forces officials with the aim of protecting their interests. War Crimes in the US and around the World With reference to the press release of the United States’ White House, the act of white collar crime is a well-built regulatory act, which ensures justice for the individual(s) and tends to protect the interests of each worker along with other group of stakeholders. The act improves the quality along with clarity of financial reporting processes, independent audits as well as accounting practices for the publicly held institutions (McGraw-Hill Education, 2013). The doctrine associated with the white collar crime encompasses a wide range of regulatory norms that principally aims to protect the interests of the workers and other stakeholder groups and ensures transparent judicial processes against the fraudulent acts of the corporate executives. With respect to a number of studies, the term ‘white collar crime’ has been observed to be characterized into few major types. Few of the widely accepted crimes committed by the white collar personnel includes bankruptcy fraud, fraud against governmental regulations, fraud associated with securities, tax fraud along with consumer fraud that are frequently observed in the public and privately held institutions across the US. In addition, the frequently observed increasing number of bribery along with different types of corruptions and political frauds, have also been observed to be extensively practiced by the corporate personnel across the nation (Simpson, 2011). From the past few decades, there many arguments have been made concerning the claim that ‘Crony Capitalism and Political Corruption’ are the worst forms of white collar crimes. By the end of Second World War, the USA became the world’s only superpower that allegedly aimed to bring the rest of the world under its control and to increase the wealth of its corporations through capitalist ventures. However, in the recent times, the country itself has been struggling to cope with problems of white collar crimes such as crony capitalism and political frauds. In relation to the concern, the practice of white collar crime has often been influenced by the crony capitalism along with political frauds, which have further imposed indispensable impacts on the economic development. In the context of modern economic phenomenon, the practice of crony capitalism and political frauds are often observed to have major negative impact, owing to which the practices also deter the emergence of competitive entrepreneurship within a particular nation. With regard to the criminal acts committed by white collar individuals, there are multiple high profiled organizations that further weakened the political and economic development of the US. The US organizations, facilitated with strong financial performance and large market share have also been recognized to frequently influence the political and economic growth of the country and promote favoritism that further enabled them to gain huge scale of outcomes to capture the other overseas nations (Auken, 2000). White collar crimes in the US has also been observed by the renowned organizations, as a form of serious fraud in accounting and auditing practices that further led the companies to their ultimate collapse. In this context, the classic failure of Enron can be taken into consideration, which was a result of massive amount of scandals practiced by the higher level corporate personnel. The failure of Enron apparently indicated towards the influence caused by illegitimate practices of the white collar decision makers and auditors who had a major impact on the US along with the emerging global economy (Munzig, 2003). The issue associated with inappropriate financial declaration has also been witnessed to involve numbers of fraud activities conducted by the auditor, that had further made the company to face bankruptcy and caused severe demolition of the organization (Munzig, 2003). In addition, misappropriation of organizational assets, such as fraud in payroll, procurement and royalty among others, have also been witnessed to engage managers in different types of illegal endeavors with the public institutions. Correspondingly, in various cases, managers from different highly renowned organizations have also been identified to engage in illegal activities by underestimating or overstating the liabilities and organizational expenses causing fraudulency in accounting records. In this context, managers are likely to falsify compliance data that the organization has provided to the regulators. In this regard, they are often engaged in major conflicts with the governmental agencies and further led the company to face severe demolition (Croall, 2001). Implications of the War Crimes The implications of the white collar in the US have long been witnessed as a major concern for the nation to stimulate continuous refurbishment of the political as well as economic conditions. In relation to various scholar researches, it is evident that there are a number of factors that motivate managers and other white collar executives to involve in different unfair or illegal acts. With reference to the aforementioned discussion, there are various factors that might have major implications towards white collar individuals to commit such crimes. Fraudulent financial reporting processes, misappropriation of organizational assets along with underestimating organizational liabilities are few of the major concerns leading to white collar crime within the country’s publicly held institutions. It has further been argued that because the 21st century business structure provides a substantial degree of influencing strength to large corporations over political stability of a country, such crimes often take the shape of a war crime at a broader scale. Therefore, influencing factors leading to white collar crimes might have major implications that can severely demolish the political along with the economic performances of the country (McGraw-Hill Education, 2013; Croal, 2001). According to various scholarly studies, it can be identified that the white collar crimes are often formed by crony capitalism and fraudulent political practices having major implications on a particular country to maintain its economic development. The correlation of crony capitalism and political corruption has obstructed a well distributed economic growth worldwide. It is worth mentioning in this context that fraud in terms of crony capitalism undermines public confidence at market place. The government role in an economy should therefore be neutral and its policies, rules and regulations should facilitate the free exchange of goods and services (Issacharoff, 2012). However, often the government subsidy schemes and other corporate welfare schemes are formulated in a way that benefits a particular company or the group of companies with similar size and control at the costs of other businesses and taxpayers. Such policies and laws initiated by the federal, state and government, serve as crony capitalism to wealthy companies rather than promoting corporate equality. At the same time, the tendency of crony capitalism and political corruption tends to increase during financial crisis situations. In the course of financial crisis, wealthy companies, in order to sustain their business profitability and eliminate the risk of any possible government policy, often tend to influence the government personnel with handsome amount of monetary gains with a hope that the concerned person will take steps and policies in favor of the organization. Such actions of the political person may however lead to heavy government losses and may also act as a threat to nation’s integrity and security, leading to a situation of war (Frankel, 2010). Such actions of the political person might further impose major losses to the governmental resources and ignites risks for major economic decline for the nation. In the similar context, white collar crime can also impose severe negative impacts on different key areas in the contemporary social structure. Humiliation, by demolition of financial institutions and pension related frauds can further have radical impacts on the legitimacy of the global financial condition. In addition, fraud associated with tax or other legal doctrines in the public sectors have major implications on governmentally held resources. These impacts can further lead to the overall reduction of the development of education, healthcare along with different other welfare segments (Simpson, 2011). As stated above, the occurrence of crony capitalism and political corruption have serious socioeconomic impacts and may fuel war crimes at given situations. Crony capitalism is ubiquitous across all political systems. It has been identified that whenever a legal person politically intervene in economic affairs, they often tend to provide incentives for businesses to take crony capitalism or corruption actions in pursuit to ensure that political intervention for personal gains or make decisions in their favor. It should be noted in this regard that crony capitalism only emerges when there is political influence over resource allocation issues. The corrosive effect of crony capitalism on political environment may thus act as a major threat to democratic stability. It violates the rights of an individual as advocated by the democratic principles (Issacharoff, 2012). Referring to the case of the US, it can be observed that the emergence of white collar crime is often observed to increase the frequency of war crime victimization across the nation. In relation to a number of analytical researches, it has been critically observed that the emergence of white collar crime exposes radical impacts on the individuals, communities along with their quality of life. The practice of money laundering and bribery, associated with different business functions are few of the common practices of the corporate and public institutions that have imposed major risks for the various groups of stakeholders including customers, investors and employees among others. The development of white collar crime has further been observed to have major impact on the public or privately held institutions. The higher level practice of fraud and misrepresentation of reports are often observed to impose institutions and organizations as a common victim that in turn imposes major challenges to a large group of stakeholders (Barnett, n.d.). In addition, the crimes generally made by the white collar individuals since the last few decades have further been witnessed to negatively influence the national and global economies causing threat to war crimes. Offences made by the white collar personnel can also be considered to have different unidentified victims, whereas victims of few criminal acts are identifiable and can be compensated likewise. For instance, crime associated with selling of short-weight products or abstracting money from a large group of customers influence individual victimization. In these types of crime, the investors or the suppliers of the company face relatively a small amount of financial loss. However, crimes that have major impact on public health, such as food adulteration or safety related issues have immeasurable impact and is significantly different than the individual victimization concept where victims are identifiable (SAGE Publication, n.d.). Examples of White Collar Crime from Court Cases Crimes committed by the white collar personnel have been a long-standing issue in both commercial and public institutions across the US. In relation to a critical assessment made by the Federal Bureau of Investigation, crimes committed by large corporate institutions is estimated to cost more than US$300 billion annually across different states of the US. Although the US government tends to charge individuals for any white collar crime, the government bodies also have the sole authority to sanction corporations for these types of criminal offenses. However, the government of the US also provides opportunity to reduce white collar crime by limiting sanctions in terms of availing adequate support and cooperation of the defendants in their different investigation processes. Moreover, in the US, the defenses available to non-white collar defendants within the criminal court are also accessible to the individuals or groups who are accused of white collar related war crimes (Cornell University of Law, 2014). In this regard, it can be stated that a common refrain of organizations or individuals facing charges associated with white collar crime is often regarded as a defense of entrapment. In this context, the case of United States v. Williams, 705 F.2d 603 (2nd Cir. 1983) can be considered as a noteworthy example, arising from ‘Operation Abscam.’ In this case, the US senator, Harrison Williams, was observed to attempt unsuccessfully in making arguments against the governmental bodies. According to this argument, Williams had revealed that the government induced to accept bribe and further claimed judicial procedures. In this concern, the case of United States v. Williams (1983) is one of the major prosecutions that emerged with the criminal practices of white collar personnel in the US (Cornell University of Law, 2014). Moreover, numerous cases have been experienced by the US, which were quite different frauds and malfeasance practices of the white collar personnel. Few of the major and widely distinguished white collar crimes in the US have been briefly stated in the following discussion. Bayou Hedge Fund (1998) The case of Bayou Hedge Fund is one of the renowned examples of white color crime, investors were found to be defrauded through misappropriate funds. Samuel Israel III and Daniel Marino, the founders of the Bayou Group were identified to represent US4300 million of the total investments made by the investors from different commercial institutions. After representing a poor return in the year 1998, the founders of the hedge fund group took measures to falsify the return amount of the funds. Moreover, in order to more convincingly represent the loss, Samuel Israel III and Daniel Marino had also been legally charged for an attempt to establish a fake accounting organization with the aim of reporting misled accounting and audited results of Bayou Hedge Fund (Federal Bureau of Investigation, 2014). Enron (2001) The collapse of Enron in the year 2001 can also be considered as one of the biggest crimes made by its white collar personnel, which led various major consequences on individuals, groups and other business organizations. The concern associated with unethical practices in terms of misleading investors and other groups of stakeholders have been critically observed behind the classic failure of Enron in the year 2001, where the U.S government agencies were also alleged to be actively involved. The lack of fairness and accountability associated with the financial reporting of the white collar members had further given rise to a devastating scenario for Enron. Moreover, malfeasance of accounting information and misleading customers through the misappropriation of auditing results can also be considered to radically impose risks for the investors and other stakeholder groups. According to the observation, the auditing committee and other individuals from the white collar groups of the company had been witnessed to report a loss of US$638 million during the third quarter of the fiscal year 2001. The misleading auditing process further disclosed a reduction of US$1.2 billion regarding the value of shares of the company’s shareholders. In this concern, misleading information about the company’s ‘huge debt’, with each group of shareholders, imposed radical impacts on Enron and caused its financial breakdown leading to political controversies in the international paradigm, worsening intellectual relationship of the US with many of its major economic partners (Munzig, 2003). WorldCom (2002) The use of fraudulent accounting approaches and misleading shareholders with aggressive financial strategic decisions of the CEO Bernard Ebbers, can also be considered as one of the most prominent criminal practices of the white collar personnel. The strategy of increasing price of the WorldCom holdings within the telecommunication industry stocks had als been observed as an aggressive strategic direction taken by the leader. The implementation of aggressive business strategy, even during the period of economic downturn of telecommunication industry, led the company to suffer a serious hindrance that further reduced the value of WorldCom’s stock. Moreover, the leader was also identified to malfeasance company’s financial assets in different personal business sectors. As a consequence, in the year 2002, an amount of US$3.8 billion fraud financial record was exposed by the internal auditors and further faced by the white collar individuals to face judicial investigation (Fleming & Zyglidopoulos, 2009). Conclusion Throughout the past few decades, it has been observed that the corporate managers from different high profiled organizations involved numbers of illegal endeavors with the US government agencies and officials from the nation’s armed forces, although a lack of strong evidence was observed. According to various studies, the primary intentions of these organizations were to takeover governmental regulations and extend their regime across different overseas nations. In the context of the illegal endeavors, the fraudulent reporting process in disclosing financial performances can be regarded as a common way of the corporation with the US governmental agencies. In this context, the organizations within the nations that have performed criminal acts being actively involved improper revenue recognition or by either under stating or over stating organizational assets. Moreover, fraudulent activities in order to underestimate of organizational liabilities has also been recognized that engaged managers in different illegal endeavors with US governmental agencies and armed force officials. The unabated practice of frauds and malfeasance of financial information by the large commercial firms has further been witnessed to create major constraints for the US government to protect its strong economic resources. However, the adequate number of strategic measures and legal provisions associated with public and private institutions of the country has also been observed to reduce the numbers of frauds and different illegal practices derived from the white collar crimes. References Auken, K. (2000). The Celtic tiger?: The myth of social partnership out of print. United Kingdom: Manchester University Press. Barnett, C. (n.d. ). The Measurement of White-Collar Crime Using Uniform Crime Reporting (UCR) Data. U.S. Department of Justice, 1-10. 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