THE ROLE OF CONFLICT IN EXPLORING WHITE COLLAR CRIME

    It is complicated to prove mens rea in the scope of white collar crime.  The means is substantial because some people in business and other work force environments commit crimes unknowingly.  Changing laws complicate one's ability to live completely within the scope of the law.  With this notion, it is nearly impossible to separate the boundaries between mistake and intended crime.

    Most white collar crimes are committed by highly educated individuals.  For example, a corporate executive who is laid off from his or her job retaliates against the firm by selling business secrets to his former employer's competitors.  This would be a white collar crime, under the assumption that the former employer signed contracts agreeing to reserve confidentiality of business strategies.  However, if the fired executive was hired by the former employer's competitor, contributing knowledge acquired from the former agency would not be a criminal offense.  What complicates the abovementioned example is the borderline between the two.

    How will one be able to determine if the former executive would not reveal defense mechanisms to his new employer?  There is not one way of reaching the conclusion because no one act is committed the same way.  Is there a correlation between the two employing agencies?  Will the employee strike against the new employer if they were to fire him?  Who knows.  This study will serve as a scientific investigation exploring the role of conflict in white collar crime.  It intends to surface and narrow a broad topic by examining case studies, statistical research, and by selecting specific typologies associated with white collar crime.

LITERATURE REVIEW

    White-Collar Crime Fighter (WCCF at www.wccfichter.com) is a website dedicated to providing special reports, and articles that examine probable measures of fighting fraudulent crimes. This website covered the Enron stock market scam case, and provides detailed information explaining its ethical woes. "The Real Enron Story: How the Failure of Ethics Compliance Led to Bankruptcy (WWCF 2000)." It is a fact that Enron distributed to its employees an official Code of Ethics. In that 64-page handbook, last updated in July 2000, it is stated that:

    · Every employee is expected to conduct business with other employees, partners, contractors, suppliers, vendors and customers keeping in mind respect, integrity, communication and excellence.
    · We are dedicated to conducting business according to all applicable local and international laws and regulations…with the highest professional and ethical standards.
    · No officer or employee should make investments or perform services for his or her own...interest in any enterprise…where, by reason of the nature of the business conducted by such enterprise there is, or could be, a disparity or conflict of interest between the officer or employee and the Company (Enron 64).

    "Problem: Many observers argue that Enron executives had little use for these standards. And that, say experts, was fundamental to the erosion of a culture of honesty, integrity and fair dealing throughout the company (WCCF)."

    "Reason: When top management of any company displays a lack of regard for the company's ethical conduct, employees get wind of this attitude very quickly. And-when disregard for ethical standards pervades a business, the chances that unethical, if not flagrantly illegal, behavior will crop up within the organization are extremely high (WCCF)."

    A Code of Ethics is essentially worthless if there are no programs and procedures to train employees in the specifics and importance of ethics standards, and to aggressively enforce and monitor the effectiveness of those standards (WCCF)." All Rights reserved by WWCF
Another Website that contained valuable information that supports my topic is www.umsl.edu/~rkeel/200/wcolcrim.html. This website belongs to the University of Missouri St-Louis; it explains in great detail the similarities and distinct differences of white collared crimes when compared to other types of crimes. Most white collar crimes are hidden in businesses. They are committed by highly educated and /or successful individuals. Most are driven to commit crimes out of personal greed, or economy scares, such as war, terrorist invasions, and recessions. The University of Missouri St-Louis below lists correlative features of White Collar Crime

    Crimes committed by the affluent in the course of normal business activities
    · Conspiracies==>use position for gain
    · Expanded by some to include a wider range of "middle-class" criminality and "high-tech" crimes
    · Legitimate business, deviant activity (usml)
    Versus Organized crime-- organization directed towards deviance
    · "White-collar crime is not a classic, clear-cut case of deviance. It has one foot in conventionality and one foot in deviance.
    · Most of us hold the conception that "crime" is what street people, or at least poor people, do. Thus, there is, a certain incongruity in seeing an affluent, 60 year-old banker in handcuffs and a prison uniform (usml)".

Why is white-collar crime so much more lucrative than ordinary burglaries, robberies and larcenies?

    · "White-collar criminals steal by manipulating symbols, which means that they can steal money they don't even have to pick up and carry away.
    · White collar crime is not a "one shot deal" it is made up of a number of interrelated actions that extend over a period of time - months, years, even decades.
    · White-collar crime is rarely prosecuted; when prosecuted and if a conviction is obtained, penalties tend to be extremely light .
    · With respect to prosecution, evidence indicating that they have taken place is not as clear-cut as with street crime.
    · Relative to their incidence, arrests are very rarely made (usml)."

    The Federal U.S. Sentencing Commission found that for white collar crimes prosecuted by federal courts between 1984- and 1987, sentences against convicted corporations tended to be extremely light; nearly half entailed a fine of $5,000 or less, 80% were fined $25,000 or less, and even probation against executives was imposed less than one-fifth of the time. Jail or prison time tends to be almost nonexistent.

    · "White-collar crime does not fit our stereotype of "real" crime; it is rarely condemned to the same degree that street crime is, and there is very little public stigma attached to white-collar crime.
    · The Media tend not to cover white collar crime in as complete or detailed a fashion as in the case with street crime because they do not make "good copy" or juicy sensationalistic stories that get page one coverage and a prominent place on the six o'clock news
    · As a result of its lack or correspondence to a crime stereotype and its lack of stigma white-collar criminals, even after being convicted rarely think of themselves as "real criminals". They insist that that, even though they engaged in the action of which they were accused, what they did wasn't a crime(usml)".

ARE ALL WHITE-COLLAR CRIMINALS RICH AND POWERFUL?

    · "Most white-collar offenders are ordinary people who got into financial difficulty and who saw their way out of it through illegal and fraudulent measures. Business fraud is "as familiar in their business context as are street crimes in poor communities.
    · It is the "small fry" who gets caught, while the "big fish" get away because the "big fish" are more capable of insulating themselves from prosecutional scrutiny.
    · When it comes to conviction, the higher the socioeconomic status of the offender, the stiffer the sentence juries vote for.
    · Thus, the cards are not always stacked against the small fry. Goals must be achieved, but often this can be accomplished only by cutting corners.
    · Top management does not have to "get their hands dirty" by directly ordering subordinates to break the law. "It is not difficult" to structure their affairs so that all of the pressure to break the law surface at a lower level of their organization or a subordinate organization.
    · There are more people occupying small time white-collar positions. So, it would be remarkable if there were many "big fish" arrested, since they are so rare to begin with (usml).

White-collar criminals are motivated by two factors:
1. Economic difficulty (usml)".
2. Greed (usml)". All Rights Reserved By The University of ST. Louis Misouri

The abovementioned information serves as an outline that will be used to support further research.

RESEARCH METHODS

Edwin H. Sutherland is credited for introducing the idea of white-collar crime in 1939. White-collar crime is defined as an illegal or harmful act carried out by elites and respectable members of society, who shield themselves behind legitimate organizations.  “White collar crime is a generic term for the whole range of illegal, prohibited, and demonstrably harmful activities involving a violation of a private or public trust, committed by institutions and individuals occupying a legitimate, respectable status, and directed toward financial advantage or the maintenance and extension of power and privilege”(10 Friedrichs).

The statistical research reflects a generic explanation, supporting Edwin Sutherland’s definition of white-collar crime. “ The movement against white color crime today is rooted in an evolving legitimating crisis and crisis confidence, both which are products of the tumultuous 1960’s.  A crisis of confidence refers to a precipitous erosion of confidence or trust in major institutions and their leadership, including government, business, and the professions; a legitimating crisis more properly refers to a loss of faith in the system itself” (Friedrichs17).  A recent example of crisis confidence can be associated with America’s attitude towards the Red Cross during September 11, 2001.  Many private and public, profit, and non-profit organizations took this situation and donations given for granted. 

Neutralization, Rationalization, and Accounts

    “The interrelated concepts of neutralization, rationalization, and accounts play an especially central role in efforts to make sense of white-collar criminality. White-collar offenders are not, with few if any real exceptions, classic “outlaw” types – that is, people who are utterly contemptuous of law and conventional standards of proper conduct. White-collar criminals most typically conform to most laws and social conventions and are unlikely to identify with or endorse the activities of conventional offenders” (Friedrich 230).  Friedrich suggests that white-collar criminals are typical people, who are in the median income range, or are either of the elite class.  Typically, white-collar criminals are not hardcore murderers, they are simply educated people driven by a desired lustful attraction to wealth and greed.  “The capitalist system dehumanizes people, transforms many objects and dimensions of the human environment into commodities, and promotes “false needs” that generate a significant amount of property crime” (Friedrich 233).

White-Collar Crime Arrest Rate

Data Available Under the Traditional Summary Reporting System

“Under the traditional Summary Reporting System, there is a limited amount of information available on white-collar crime. The white-collar offenses that are measured are fraud, forgery/counterfeiting, embezzlement, and all other offenses. Because white-collar crimes are not Index crimes, the only information available on these offenses is arrest information, which includes age, sex, and race of the arrestee. Additionally, the all other offenses arrest category is very limited in its ability to measure the white-collar offenses included in its counts. This is due to the inability to differentiate the white-collar offenses from the others that also fall in this category. Based upon the most recently published data from the FBI, the arrest rates for the offenses of embezzlement, fraud, and forgery/counterfeiting are much lower than the arrest rates for property crime (table 1) or for total crimes in general”(2 Barnett). 

SUMMARY AND CONCLUSIONS

    White collar crime indeed, is an interesting and yet complex area of crime. How do we know who is honest in the workforce? Should we worry about the mishaps and thefts that occurs within legitimate organizations. When our country was rediscovered, by British influences was crime not committed? I will allow you to decide for yourself, but take in consideration that our country was founded by those utilizing a system of crime. You will have to decide for yourself if this statement is true.

    Earlier, I introduced the idea that It is complicated to prove mens rea in the scope of white collar crime, because some people in business environments commit crimes unknowingly. Who's responsibility is it to follow growing legislature. Since changing laws complicate one's ability to live completely within the scope of the law, How do we decide the acceptable forms of crime from the unacceptable. It is nearly impossible to separate the boundaries between mistake and intended crime. However, crimes with strict liability does not require intent. Maybe if this penalty was implemented in the area of white collar crime, it would deter white collar criminals from committing crime. 

    For some, WHITE COLLAR CRIME is not viewed as a "crime" at all, because of its non-violent nature. Violent crime has an immediate and observable impact on its victim which raises the ire of the public, whereas WHITE COLLAR CRIME frequently goes undetected or is viewed as a bending of the rules. Yet WHITE COLLAR CRIME can create the greater havoc. The victim of an assault will recover, however, the impact of a fraud can last a lifetime. This is especially true when the elderly are victimized, as they have little or no hope of re-establishing themselves in financial terms. Contrary to the popular belief, White Collar criminals are thieves and the methods used to conceal their offenses are both artful and ingenious. Concealment of the crime is always an objective of the offender, and it becomes an element of the crime itself. Because it is an artful form of deceit which is skillfully disguised , the investigation itself is often long and laborious as far as proving criminal intent is concerned. The offence itself may be disguised in a maze of legitimate transactions, which are quite proper if viewed in isolation, however, the cumulative effect is the commission of a criminal offence. From the standpoint of the criminal, the ideal white collar crime is one that will never be recognized or detected as a criminal act"(RCMP's).

    Ironically, white collar crime goes undetected because it is a non-violent crime. However, some are skeptical because it allows the rich to get richer. For example: Organized is also shielded behind legitimate organizations. Most businesses that Mafia's and gangs shield behind are impoverished, low waged, legitimate organizations. " Organized crime infiltrates legitimate businesses which are low tech (such as garbage collection), have uniform products, and operate in rigid markets where price increases will not reduce demand. If someone operates such a business, they are a prime target for mob infiltration. Other businesses are sought after solely to provide a "front" or for money laundering operations"(O'Connor). The only distinct difference it the violent aspect of Organized crime. Both Organized and White Collar crime impose financial barriers on society.

    "Bands" of young delinquents active on a temporary basis in context of social and spatial disorganization, and groups of older and more firmly established "urban gangsters," prevalent in the inner cities and metropolitan areas, and active in also smaller cities (13 Arlacchi)." Most inner cities and urban areas are poverty stricken. Many youth when given the opportunity partake in organized crime in hopes of seeking profit. People who lack education and are unemployed by legitimate means are more likely to become involved in illegitimate crimes; more so than well rounded college educated secure individuals, with secure jobs and income are.

    Most organized criminals begin their career of crime in legitimate work areas. Some organized criminals are well-educated. Organized criminal activities are often influenced by and associated with white-collar crime. White-collar crimes are committed by highly educated individuals, whose anonymity is concealed behind legitimate businesses.

    "The United States Justice Department says that $10 billion is stolen from US banks yearly by computer crimes. Criminals do not only use the Internet to steal money, but also to hide the money that they make through their illicit activities. $1 billion of illicit capital moves through financial markets daily. Offshore banks allow for easy disposal of this money. Offshore banks particularly hurt developing nations as the nations lose the tax revenue from the money being laundered there" (Shelley 2).

    The legitimacy of the businesses in which these criminals use to conceal their identities is what complicates legal officials' ability to invade alleged criminal organizations. Money and power are obvious motivation factors for those who support organized crime. Therefore, Mobs', Mafias' and other organized gangs target low or non-profit businesses to shield behind. Does poor people always catch the rough end of the deal? Should organized crime be targeted more so than White Collar crime, Or should both be equally weighed within the scope of the law?

REFERENCES

    Barnett, Cynthia. The Measurement of White-Collar Crime Using Uniform Crime Reporting Data. U.S. Department of Justice, FBI (1996) http://www.fbi.gov/ucr/whitecollarforweb.pdf    

    Boatright, John, Business Ethics Program, Loyola University, Chicago, and former Executive Director, Society for Business Ethics, jboatri@luc.edu The Corporate Compliance Program by Stephen M. Hudspeth, partner, Coudert Brothers LLP, attorneys, 1114 Avenue of the Americas, New York, NY 10036, www.coudert.com Interviews with Big Five insiders who insisted on anonymity

    Flood, Susan and Arlacchi, Pino. Illicit Drugs and Organized Crime: Organized Crime and Criminal Gangs. 1991, Chicago, Illinois, The Office of International Criminal Justice.  

    Friedrichs, David O. Trusted Criminals White-collar crime in Contemporary Society. Wadsworth Publishing Company, 1996

    Keel, Robert. URL: http://www.umsl.edu/~rkeel/200/wcolcrim.html Owner: Robert O. Keel rok@umsl.edu References and Credits for this Page of Notes Last Updated: Wednesday, October 24, 2001 9:13 AM

    Murphy, Joseph E., Partner, Compliance Systems Legal Group and corporate compliance attorney, Haddonfield, NJ, JEMurphy@cslg.com Enron Code of Ethics Handbook, July 2000.

 O'Connor, T.  2001.  MegaLinks in Criminal Justice http://www.faculty.ncwc.edu/toconnor/ Last Updated: 03/16/02

    RCMP's. White Collar Crime. www.3.sk.sympatico.ca/ rcmpccs/wcc.htm Copyright 1996-2001 Regina RCMP CCS Created: October 10, 1996 Updated: February 25, 2002

  Shelley, Louise I.  Crime and Corruption in the Digital Age. Journal of International Affairs.  Spring 1998, 51, no. 2. Summary by Brett Sears

    White-Collar Crime Fighter source: Organizational Guidelines And Compliance, United States Sentencing Commission.

Other comments: I touched up what light editing was needed.  You appear to be on the mark, and the only problem I see so far is in keeping you from writing too much rather than too little.  But, you seem to write well.

There's a few minor formatting problems that might mean a reworking of the lit review, but you've got enough to move on.

On 04/24/02, I added your Third section. On 05/05/02, I added your summary and refs.