White Collar Crime in America - Research Paper Example

 White Collar Crime in America Introduction: The whole of America is engulfed in white collar crimes. Such criminals are plundering the gullible citizens on the one hand and on the other hand government has spent billions of dollars to acquire new tools to fight such crimes, without tangible results. All types of crimes are on the increase and the conviction rates are highly discouraging. The latest technology has turned out to be the latest weaponry for the white collar criminals. Without firing a shot, they are able to achieve their objectives of profiteering and cause tangible loss to the purse and psyche of their clients. “White-crime statistics are drearier still. Though, two out of every three Americans have been the victims of a white-collar crime, 85 percent of victims don't file reports with the authorities. An untold number may never even know they have been the victims of crimes such as stock manipulation, double billing for purchases, unnecessary home or auto repairs, embezzlement, or as evidenced by recent events, Ponzi schemes.” (O’donnell, Jan, 29, 2009.) Is there a permanent solution to root out white collar crimes from the American society and if so what are the measures to be initiated? Definition of “white collar crime” White collar crime baffles definition. The industrialization and the internet revolution which are the foundation stones of the materialistic civilization have contributed much to the advancement of the white collar crime. Explaining the inability of the thinkers and writers on the subject to come to an acceptable conclusion to tender a definition that is acceptable to all, David O Friedrichs goes to elaborate the major crimes which can be classified as white collar crimes. He writes, “Some of these terms include economic crime, commercial crime, business crime, marketplace crime, consumer crime, respectable crime, “crime at the top”, “suite” crime, elite crime and deviance, official crime and deviance, political crime, governmental crime, state (or state-organized) crime, corporate crime, occupational crime, employees crime, vocational crime, techno crime, computer crime ….”(Friedrichs, 2006, p, 5) That which is evident needs no further appreciation, explanation or elaboration. White collar crime has taken hold many segments of the society and is growing in all directions like the octopus. This is also a contentious topic- whether one is committing a legitimate business activity in a free enterprise system which is the hallmark of a capitalist society or indulges in white collar crime. The businessmen with fraudulent intentions take undue advantage of the loopholes in the system of jurisprudence. “Consumer fraud entails the use of deceit, lies, or misrepresentations to entice customers to buy goods or services.”(Rosoff, Stephen M et. el. 2006, p.30) American history of fraud: American history of fraud is as old as the history of America. Only it began to be investigated with a determined approach by the government during the last few decades. A few cases histories of white collar crimes would indicate the gravity and ingenuity of the perpetrators of the crime. “A Seattle television advertiser told children to “call Santa Claus” by holding their phone up to the television speaker—which then emitted electronic tones that automatically dialed a 900 number and billed the household.”(Rosoff, 2006, p, 27) In another case, “For years, one urban furniture store held a “Going out of Business” sale every Friday. The owner invariably changed his mind over the weekend and opened for business as usual on Monday.” (Rosoff, 2006, p, 30). It would be the subject matter for an encyclopedic exercise if detailed history of frauds in America is to be enumerated. Take one area of such frauds. Some of biggest tax evasion frauds of the decade are: Richard Hatch was sentenced in May 2006 for 51 months in prison, and three years of supervised release. Edward and Elaine Brown sentenced to five years in prison for failing to report over $2 million in taxable income, in January 2007. Tom Coughlin, vice-chairman of Wal-Mart Stores was convicted of tax evasion, theft and embezzlement in 2006.He was sentenced to 33 months of in-home detention in 2006 and asked to pay $450,000 in restitution to Wal-Mart Stores. Walter Anderson was involved in the biggest tax evasion case in U. S. History. He was sentenced to nine years in prison in 2005. b).Grandfather of “white collar crime.” What was historically known as “fraud” turned in to “white-collar-crime”, a term coined in 1939 by Professor Edwin Sutherland. Today’s fraud-stars are educated and use advanced techniques. They are experts in online, share and health care scams. (www.fbi.gov/...) c) The man you first challenged white collar criminals. This is an area of crime that has been neglected in the past because of "lack of research". The white collar criminals are generally educated and intelligent, well-versed in the laws of the land and they know how to subvert the justice system. They pull off million dollar heists with astonishing regularity and almost always get away with it. The man I first challenged was the owner of a departmental store who sold spurious drugs. Government intervention: When did the government first step in? Traditionally, the concentration of the law enforcing agencies has been on street lawbreaking. Before the term “white-collar- crime” was coined in to the fraud history, the government tackled such crimes in a disorganized style, as and when the complaints were filed by the complainants. “Since the 1990s, tremendous growth of and involvement in the securities and commodities markets at the institutional, corporate, and private investor levels have led to great numbers of individuals involved in intentional corporate fraud and misconduct, particularly senior corporate executives.” (www.fbi.gov/...)The strong intervention of the FBI and the pressure from the consumers spurred up the various investigating agencies, and FBI at present is looking into 189 major corporate frauds. Health Care Frauds are the major source worry for the government. Large-scale mortgage frauds is another area that is receiving the special attention of FBI What steps were taken against these criminals? Though the legal process of seeking convictions is arduous and long drawn one, “The FBI continues to meet its traditional responsibilities to uphold and enforce federal criminal laws of the United States. We pursued major corporate fraud schemes that accounted for billions of dollars in losses; The FBI has had successes against public corruption and continues to aggressively protect civil rights.” (www.fbi.gov/....) Apart from its independent investigating machinery, the FBI with its effective relationship with regulatory agencies is making strong efforts to instill public confidence in the markets and financial institutions. It works to ensure the integrity of government expenditure, protects the individuals and businesses by the engineered frauds by the unscrupulous agents of white-collar-crimes. c) What is being done now? The important development in the area of white collar crimes is the awareness of the government as for the seriousness of the issue and the determination of the various crime controlling agencies to meet the challenge. The Non-governmental Organizations are coming to the fore to assist the citizens and the government. One such agency is the National White Collar Crime Center(NW3C) “ The mission of the National White Collar Crime Center (NW3C) is to provide training, investigative support and research to agencies and entities involved in the prevention, investigation and prosecution of economic and high-tech crime.” (http://www.nw3c.org/) They own a combination of critical support services and offer training to the state, local Tribal and federal law enforcement agencies. The necessary skills and resources are also provided to meet the challenges of the economic and cyber crime problems. They assist the people through their website to notify the concerned authorities the crime complaints. Many new technologies are being introduced to combat crime. Police departments have installed gunshot audio equipment. Surveillance cameras are being placed in. New DNA testing technologies have been introduced. Forensic evidence gathering and testing methods are being improved. “Law enforcement officials increasingly believe that data mining will be a crucial crime-fighting technology in the years ahead, because of its ability to access a mother lode of hard-to-access information. New York's police department has heralded the creation of its Real Time Crime Center, which promises to allow investigators access to billions of police and other public (as well as some private) records.”(O’donnell, 2009) The RTCC has successfully solved serious crimes by linking suspects and their victims. There is the need provide proper education at the school and college level and to teach the importance of ethical behavior. The noble inner convictions of an individual should never be destroyed for amassing wealth. “First, there is nothing more important than making an organization healthy. Regardless of the temptations to dive into more heady and strategically attractive issues, extraordinary executives keep themselves focused on their organization’s health.” (Lencioni, 2006, p, 180) When such high quality executives manage the business empires, white-collar-crimes will disappear from the business organizations. d) What future steps can the government take? In future, investigating agencies will be able to use modern snooping devices to listen in on suspects. GPS devices are being fitted on the police vehicles. Text messages, smart cards, ATM receipts have proved to be important tools of investigation “and the predicted transition to a cashless society promises to provide the police with grand opportunities to track the movements of victims and offenders alike. A big buzz has arisen over reports that functional MRI imaging might become a reliable lie detector—a tool that has long been elusive. Researchers are also readying voice identification analysis machines for market and efforts are also planned to create a national database of ballistics evidence.” ( O’donnell, 2009) Tackling the white-collar crimes is one of the important agenda points of Federal Bureau of Investigation. Of its ten priorities, in the order of priority, Director Mueller has placed the item “Combat major white collar crime” at number seven. “Protect the United States against cyber-based attacks and high-technology crimes” is placed at number 3. (www.fbi.gov....)As for the forecast of White Collar Crimes, the FBI observes thus: “Major White collar crime will impact the U.S. economy over the next five years. Corporate fraud has undermined the public’s confidence in American business institutions, and the aggressive investigation and prosecution of major corporate fraud will be a key factor in restoring long-term confidence in our business leaders.” (www.fbi.gov/....) FBI has taken into its strategic planning, the adverse effects of money laundering on national security, the ability of terrorist and criminal organizations to influence social, political and economic institutions and use advanced computer technology to their advantage, and to prevent frauds in government purchases, including Health care misappropriations. The best tool to combat white collar crime and increase the integrity of financial information for companies is to have strong internal controls which are reviewed by external independent auditors who are properly educated, skilled, trained and experienced. Strong internal controls create barriers to crime and result in the increased integrity of financial information. Why do individual commit these crimes? Individuals commit white collar crimes because of human tendencies of greed and aggrandizement for wealth. According to Sam E. Antar, “The main pillar of our capitalistic free market economic system, which is a cornerstone of democracy, is the integrity of financial information. Without reliable financial information, capitalism cannot and will not survive. However, the integrity of financial information can only be achieved through building blocks such as sound internal controls and independently verifiable financial information. The well educated, skilled, and experienced accountant is the first line of defense for the capitalist system."(Antar, 2006) The inner core of every individual is essentially divine, even of the worst villain. It needs to be revealed to him to help him align himself with his true personality. The revelation is not possible through outer means of by inflicting severe punishments for the offender. The highest world bodies like UNESCO and UNDOC are on record to say that the socio-spiritual organizations can play the dominant role to prevent the downward march of the criminal to self-destruction and to make one a worthy individual and citizen. Individuals commit crimes due to ignorance, revengeful attitudes, greediness and various other social factors. Proper values are not taught to the children right from childhood, value systems are not imbibed at the college levels, and therefore they are led astray easily. Spirituality empowers an individual to face the crisis in its proper perspective. But unfortunately many do not appreciate its importance and think that spirituality is an after-retirement project and has no importance in the society that cares for materialistic comforts. Who does this affect? Prison is the most tortuous place for a white collar criminal to live in. The most systematic suppression is caused to his spirit within the four wall of the prison. The pre-conviction period is worse as compared to the post-conviction time. When an under-trial prisoner is convicted, he becomes sure about one thing-the duration of the punishment. He has something to look forward to, howsoever unpleasant and dark that may be! That certainty within the uncertainty! Moreover, all laws, just because they are laws of the land are not faultless aphorisms! A difficult law implemented in a worst manner is the ultimate calamity for the under-trial. Such a law, if not amended or withdrawn quickly, can even ruin the delicate social structure based on human relationships. Embroiled in an unfriendly system of jurisprudence, the white collar criminal gets physically, emotionally and economically crushed. Celebrities that have become criminals: Who are they? Celestial angels or two-legged devils! In the list of celebrities of criminals you will find individuals belonging to all sections of the society—politicians, administrators, actors, sportspersons, industrialists, bankers, exporters, drug peddlers etc. c) Where can I get help if I’m a victim? “For the general public, NW3C provides information and research so they too may become proactive in the prevention of economic and cyber crime. Victims of crimes can rely on NW3C to help them register Internet crime complaints through their website at www.ic3.gov and notify the appropriate authorities at local, state, and federal levels promptly, accurately, and securely.” (http://www.nw3c.org/) At the highest level, the FBI is rendering active assistance and takes appropriate legal action against the perpetrators of the crime. Conclusion: The pages of American business and commercial history, daubed in the dirt of white collar crimes, ask the crying question. How to make this country heaven-like? The answer is simple and straightforward. Eyes full of understanding, hearts full of love and the life that refuses to compromise with integrity-enough, these personal qualities alone are enough! Works Cited: Friedrichs, David O: Book: Trusted Criminals: White Collar Crime In Contemporary Society (Wadsworth Contemporary Issues in Crime and Justice) Paperback: 464 pages Publisher: Wadsworth Publishing; 3 edition (June 6, 2006) Language: English ISBN-10: 0495006041 ISBN-13: 978-0495006046 Lencioni, Patrick: Book: The Four obsessions of an extraordinary executive: Pages: 184 Publisher: Wiley India Pvt.Ltd, Edition: 2006 ISBN: 81-2650677-6 Rosoff, Stephen M (Author) Pontell, Henry N(Author), Tillman, Robert(Author)Book: Profit Without Honor: White Collar Crime and the Looting of America (4th Edition) Publication Date: July 23, 2006 Paperback: 624 pages Language: English ISBN-10: 0131722328 ISBN-13: 978-0131722323 http://www.fbi.gov/whitecollarcrime.htm http://www.nw3c.org/ Antar, Sam E: Submission of Comments to the Securities and Exchange Commission and the Public Company Accounting Oversight Board for its May 10, 2006. Conference on Sarbanes Oxley and Internal Controls O’donnell, Eugene, Newsweek Web Exclusive, Jan 29, 2009 Introduction: http://www.newsweek.com/id/182266 Read More