White Collar Crime and Organized Crime Lecture Outline
Lecture & Some Group Discussion points:
White-Collar crime (definition)
2 types: 1. Occupational Crime 2. Organizational / Corporate Crime (Barkan ch. 13)
Occupational crime example--Healthcare Fraud. Local Hospital & Heart Surgeon example. Part of larger problem nationwide, Healthcare fraud $100 BN year (Barkan Ch. 13)
Healthcare fraud cost in $ and lives (unnecessary surgery) (Barkan Ch. 13). Local Salisbury heart surgeon example….
Frequency of White-Collar crime by Corporations (Corporate Crime) & typical prosecutions
Fraud & betrayal of trust—Key part of much White-Collar Crime
Accounting Fraud (Barkan Ch. 13) -- Lehman Bros. accounting fraud example, as key aprt of start of the Great recession 2008 onward (Gordon et al. web rdg.)
Showed video clip on Lehman Bros. Bank accounting fraud, “Repo Transaction” as example of graud technique, that led to largest bank collapse in US history in 2008 and started economic crisis. (goes with Gordon et al. web rdg.)
Cost (human and economic) of White-collar crime Vs. Cost of Street Crime (Barkan ch. 13)
Leniency of WC crime enforcement (some fines and little jail time, etc.) – Barkan ch. 13
Why White Collar criminals get away with it (invisible, low penalties, etc.)
Showed portions of Video “Inside Job” on Wall Street / High Finance deviance and crimes leading to 2008 economic crisis. Key role of more and more government deregulation of finance and banks over apst 3 decades. Increases opportunities for crime and fraud. IN lead up to crisis, much related to home aggressive risk-taking in mortgages, derivative and securitization of loans by Wall St. Banks & ratings agencies, then selling bundles of mortgages to investors, massive growth and profits in this but lots of fraud involved and risk hidden… Ultimately the bubble burst and collapsed…
Fits with web readings ((Marketplace et al.) on debate over regulation or not of derivatives, and (Gordon et al.)
Financial fraud.
Organizational Crime is more rational than other types of crime
-- Cost-Benefit decision making -- Ford Pinto case…(Barkan ch. 13)
How can white-collar crime be violent? Worker (un)safety, product (un)safety, and Pollution & health effects (Barkan ch 13)
Wells Fargo/Wachovia Bank & HSBC banks drug money laundering for Mexican drug cartels—Amount of money involved, link to violent crime groups, lack of oversight, but some internal & ignored, too big to fail so little fine. Role of Internal Whistle Blower. Too big to prosecute? Compare to low level drug dealer? (Smith et al. web rdg.)
What sort of false advertising and false info. did Pharmaceutical companies spread re: some best selling products? And what kind of financial fraud commit also? (Thomas et al. web drg.; Barkan Ch. 13)
Explanations for White-Collar Crime-- Why is white Collar crime so common & so hard to prosecute (explanations for it)? What are typical penalties for it? & How to reduce White-Collar Crime (increase press attention & penalties, etc.) (Barkan ch. 13) Case of “fabulous fab” at Goldman Sachs as example… (Gordon et al. web drg.)
Other Things to be aware of but not covered in class (or not much):
Tax Fraud –Who most likely to commit vs. who is most likely to be audited? (BArkan, ch. 12)
Why is fraud fairly easy in massive derivatives trade business ($450 Trillion)? What was view of fraud among top economic officials? (Marketplace et al.)
Also, for list of key issues in readings (overlap lots wwith lecture), see White-Collar Crime -- Group Discussion Issues: (all from Barkan Ch. 13 unless otherwise noted)
Occupational Crime Vs. Organizational / Corporate Crime—What’s the difference?
Occupational Crime: Savings & Loan Embezzlement– How much & how did they do it?
Healthcare Fraud – How widespread & costly ? Deaths?
Financial Fraud – “insider trading” Madoff example: What did he do and cost? (Marketplace et al.)
Organizational / Corporate Crime
Corporate Financial Crime: Fraud, Cheating & Corruption
· What is accounting fraud & how common is it and what are its costs? What did Enron do?
· Defense Industry -- How common is fraud and what types of things?
· Why is fraud fairly easy in massive derivatives trade business ($450 Trillion)? What was view of fraud among top economic officials? (Marketplace et al.)
· What types of sales & accounting fraud did Goldman Sachs and Lehman Bros. investment banks engages in, respectively ? Related to economic crisis? (Gordon et al.)
· What misconduct US banks done for Drug Cartels? How much $? Why so little oversight? (Smith)
· What is LIBOR rigging, why important? What was the “London Whale” scandal? (BBC, et al.)
Price Fixing & Gouging & False Advertising
What is Cost overall, & per family per year in US ?
General Electric case (fines vs. profits). Gas prices Vs. profits
· What sort of false advertising and false info. did Pharmaceutical companies spread re: some best selling products? And what kind of financial fraud commit also? (Johnson et al.)
Corporate Violence
How can white-collar crime be violent? Pollution & health; Products & workplace death & injury
· Ex. of drug companies & deception & health probs. (Thomas et al. web rdg)
· How is Bank Money Laundering related to violence in drug trade? (Smith)
· What safety violations and mistakes at Texas Fertilizer plant explosion in April 2013? How many people died? (Gillum and Masti web rdg.)
Cost-benefit decision making & white-collar crime: Ford Pinto case
Cost of White-Collar crime for Society Vs. Cost of Street Crime.
How does White-collar crime compare to Street crime in terms of $ and lives lost?
Explanations for White-collar crime
Typical law enforcement for white-collar crime, & reasons for that & role of Media
Does White-Collar Crime pay? (benefits vs. risks/costs) How to reduce White-Collar Crime
How common / frequent is white-collar crime? (summarize various studies in Barkan)
Fraud (ch. 12 , p. 308-312)
Costs of check fraud, credit card fraud, and ID theft Welfare Tax Fraud,
Insurance Fraud (how big a problem?) Types of computer crime?