White-Collar Crime

Definition

White-collar crime refers to a range of non-violent offenses that are committed for financial gain. The term was coined by sociologist Edwin Sutherland in 1939 to describe crimes committed by individuals in high-status positions during the course of their occupation. These crimes typically involve deceit, theft, and other forms of misrepresentation or corruption.

Characteristics

Non-violent: These crimes do not involve physical harm but cause significant financial damage.
Deception: Central element involving schemes and fraud.
Occupational Scope: Predominantly committed by businesspersons, public officials, and professionals in their work settings.

Examples

Consumer Fraud

Consumer fraud involves deceptive practices that result in financial or other losses for consumers in the course of seemingly legitimate business transactions. Common types include false advertising and identity theft.

Bribery

Bribery involves offering, giving, receiving, or soliciting something of value as a means to influence the actions of an official or other person in charge of a public or legal duty.

Stock Manipulation

Stock manipulation, also known as securities fraud, involves the deliberate manipulation of the market to create an artificial price of securities. Insider trading is a common form of stock manipulation.

Frequently Asked Questions (FAQs)

What distinguishes white-collar crime from other types of crime?

White-collar crime primarily involves deceit and occurs within a professional setting, without direct violence involved.

Who are common perpetrators of white-collar crime?

Individuals with privileged access within organizations, such as business executives, public officials, and professionals in regulated industries, are common perpetrators.

Can white-collar crimes lead to imprisonment?

Yes. Individuals convicted of white-collar crimes can face significant fines and imprisonment, depending on the severity of the offense.

How does white-collar crime impact businesses and the economy?

White-collar crime can lead to substantial financial losses, undermine public trust, and increase the cost of conducting business due to the need for heightened security and compliance measures.

What agencies handle white-collar crime investigations?

In the U.S., agencies like the FBI, Securities and Exchange Commission (SEC), and the Internal Revenue Service (IRS) play key roles in investigating and prosecuting white-collar crimes.

Insurance Fraud

Fraud committed with the intent to fraudulently obtain payment from an insurer. Often involves falsified claims or staged accidents.

Embezzlement

The fraudulent taking of personal property by someone to whom it was entrusted, commonly occurring in employment settings.

Cybercrime

Crimes involving computers and networks such as hacking and identity theft, which may or may not overlap with white-collar crime.

Money Laundering

The process of concealing the origins of illegally obtained money, typically by means of transfers involving foreign banks or legitimate businesses.

Regulatory Compliance

Adhering to laws, regulations, guidelines, and specifications relevant to business operations. Regulatory compliance aims to prevent white-collar crime through standards and controls.

Online References

Suggested Books for Further Studies

“The Handbook of Fraud Deterrence” by Harry Cendrowski
“White-Collar and Corporate Crime: A Documentary and Reference Guide” by Gilbert Geis and Colin Goff
“Corporate and White-Collar Crime: Cases and Materials” by Kathleen F. Brickey
“The Crime of the Century: Richard Speck and the Murders That Shocked a Nation” by Dennis L. Breo
“Fraud 101: Techniques and Strategies for Detection” by Stephen Pedneault

Fundamentals of White-Collar Crime: Business Law Basics Quiz

### Which of the following best defines white-collar crime? - [ ] Violent crimes committed in professional settings. - [x] Non-violent offenses characterized by deceit and committed for financial gain. - [ ] Any type of misdemeanor. - [ ] Crimes committed in education institutions. > **Explanation:** White-collar crime refers to non-violent offenses committed in professional settings for financial gain, predominantly involving deceit. ### What is a common characteristic of white-collar crimes? - [ ] Physical force. - [ ] Involvement of minors. - [x] Deception and misrepresentation. - [ ] Public protests. > **Explanation:** A common characteristic of white-collar crimes is deception and misrepresentation to gain financial benefits. ### Which of the following is NOT an example of white-collar crime? - [x] Burglary. - [ ] Embezzlement. - [ ] Bribery. - [ ] Insider trading. > **Explanation:** Burglary is a violent property crime and not classified as a white-collar crime. ### What is often targeted in white-collar crimes? - [ ] Personal property. - [x] Financial assets and trust. - [ ] Physical security. - [ ] Public parks. > **Explanation:** White-collar crimes often target financial assets and trust, leveraging access and insider knowledge for illicit gain. ### Which agency primarily investigates securities fraud in the U.S.? - [ ] Federal Trade Commission (FTC). - [ ] Environmental Protection Agency (EPA). - [x] Securities and Exchange Commission (SEC). - [ ] Food and Drug Administration (FDA). > **Explanation:** The Securities and Exchange Commission (SEC) is primarily responsible for investigating securities fraud in the U.S. ### Who was the sociologist that coined the term "white-collar crime"? - [ ] Emile Durkheim. - [x] Edwin Sutherland. - [ ] Max Weber. - [ ] Herbert Spencer. > **Explanation:** Edwin Sutherland, a prominent sociologist, coined the term "white-collar crime" in 1939 to describe crimes committed by respected individuals in the course of their occupation. ### What element is central to white-collar crime? - [ ] Violence. - [ ] Physical theft. - [ ] Petty theft. - [x] Cheating and deceit. > **Explanation:** Cheating and deceit are central elements to white-collar crime. ### Which testimony is often crucial in prosecuting white-collar crime? - [ ] Eyewitness identification. - [ ] DNA evidence. - [x] Document and financial records. - [ ] Physical evidence. > **Explanation:** Document and financial records often provide crucial testimony in prosecuting white-collar crime. ### Why is white-collar crime considered particularly harmful? - [x] It can cause significant financial damage and erosion of trust. - [ ] It involves physical violence. - [ ] It is always committed by large corporations. - [ ] It predominantly affects public institutions. > **Explanation:** White-collar crime is considered particularly harmful because it can cause significant financial damage and erosion of trust in institutions. ### Which term often describes the laundering of illegally obtained money? - [ ] Tax evasion. - [ ] Counterfeiting. - [ ] Embezzlement. - [x] Money laundering. > **Explanation:** Money laundering describes the process of concealing the origins of illegally obtained money.

Thank you for exploring our detailed guide on white-collar crimes, complete with a comprehensive definition, examples, FAQs, related terms, online references, suggested books, and an interactive quiz to test your knowledge!