212 terms

White Collar Crime Terms

debunking motif
Peter Berger's concept of looking for levels of reality other than those given in the official interpretations of society
The Jungle
Upton Sinclair's expose on the meat-packing industry
Sherman Antitrust Act of 1890
forced companies to merge rather than collude
E. A. Ross's idea that a person that enjoys a public image as a pillar of the community and a paragon of virture, but has a persona only concerned with personal gain
Federal Trade Commission
measures identity theft only by victim reports
cross-sectional study
civil claims/lawsuits, victimization reports at one point in time
Most commonly victimized by
car/automobile industry and price scams
doping company; started by Conte who was a bassist in a band
demoralization costs
society loses faith when they realize that a person or institution is caught in a scandal (social, political)
Conservatives sought to reduce government intervention in the 1980s
Ponzi scheme
paying off early inventors with new investors' money, thereby attracting more and more investors
Ponzi scheme aka
pyramid scheme
sings praises of the arrangement/company involved in the crime
sheep, pigeon, or whale
investor that is scammed (and that has alot of money)
con mens use this (relationship, religion, race) to get an "in" with the victim
Big 3 of White Collar Crime
defense, savings & loan, and securities industries
white-collar crime percentage
represents 94% of the total monetary amount of crime
blue-collar crime percentage
represents 6% of the total monetary amount of crime
byproducts of white collar crime
environmental damages, medical costs, demoralization (society) costs, [Tobacco industry]
caveat emptor
buyer beware so that you don't get cheated because cops won't come help
telemarketing steps
front, drive, and close
the front
step 1. the pitch and the literature
the drive
step 2. constant pressure on the victim
the close
step 3. get your money
the use of probabilities to catch someone by telling them "inside information"
4 types of consumer fraud
false advertising, price fixing, dangerous products, quackery
bait & switch
bring you in for a product that they no longer have, then charge you for a more expensive one
four-square technique
technique used by auto salesmen by finding the buyer's weak spot
dead peasants insurance
taking out life insurance policies on a company's low-level employees with the company, receiving all the benefits when they die
types of advertising
informative, puffing, deceptive
movie about the tobacco industry and how it does not want an educated public
customer for life
Big Tobacco's marketing ploy in which they gave out free cigarette boxes
Big Tobacco Industry (example of)
postponed violence
tobacco kills
1200 people each day
Joe Camel problem
attracts little kids to smoking & the subliminal sexual message: his face looks like a penis
Ford Pinto
$11 car click next to gas tank that the company refused to recall
Unsafe products in many industries
auto (cars that flip over, tires, GM windshield, seatbelts), baby products, pharmaceuticals & kitchen utensils
White-collar crime paradox
someone who probably wouldn't hurt you as an individual, but the corporate shield makes them perceive you as a number
Quackery victims
teenagers and elderly are very susceptible to worthless products; often desperate for a cure
3 main quackery industries
Nutrition (herbal life, monavie), Miracle drugs (penis pills), and magic devices (crystals)
Wholesome Meat Act of 1967
states were required to at least match federal inspection standards
federal meat inspections
sometimes occur only every 10 years
Food and Drug and the Meat Inspection Acts of 1906
came about from Upton Sinclair's The Jungle; not applied to meat sold in interstate commerce-processed and sold within a single state (about 25% consumed in the U.S.)
very pathogenic (salmonella); often inject it with growth hormones to plump them up
Food and Drug Administration; regulates pharmaceuticals, but not all meds are regulated under this
sleep medication with "no side effects;" George Bush took and past out in another country; many were committing suicide and undergoing personality changes
controversial medications
phenphen, bendectin, thalidomide, oraphlex
thalidomide controversy
fined $80,000 but made $18 million; aimed to reduce cholesterol
oraphlex controversy
fined $25,000; 15,000 exec
pharmaceutical misconduct
company puts product out ASAP, but government wants to do multiple tests, so company deliberately cuts corners, fabricates research results, and ignored risks
Rely Tampons
P & G; FDA didn't react until women died, experts didn't testify because P & G paid them to research, women got toxic shock syndrome
harmful female products
breast implants, birth control, tampons, Dalcon Shield-IUD
Dudley Leblanc
tonic to cure; King of Quacks
Mark Sevigny
Cardiff Giant
Cardiff Giant 1869 scam
workers dug a well and found fossilized 10ft man-not really a fossil, made out of gypsum rock (the farmer placed it there); charged people to see it, toured with it, no test could prove it was real; kept raising prices, religious leaders said it was legitimate
P. T. Barnum
bought the Cardiff Giant for $50,000; circus guy (The Greatest Show on Earth); the farmer said "a sucker is born every minute
"It is a capital mistake..."
"...to theorize before data"
Only stupid people steal with
guns; get less than $1,000; pen and paper gets so much more
"Con man" is short for
violates trust
any crime can be done better and faster
on the Internet (as long as it doesn't require personal contact)
All frauds
are WCC, but not all WCC is fraud
Robert Citron
treasurer of OC (college dropout)
first thing to do on a fraud investigation
follow the money & watch the patterns
fraud investigation steps
organize and analyze evidence, clarify, and simplify the fraud
Postponed violence of environmental crime
don't get it from media or religion; toxins in the water or air
EPA determined environmental crime is
a crime of violence because people die; the motivation might not be violent, but the outcome is
1977 melted snow
dioxin and benzine seeped into basements; health problems in excess of statistical averages; the company knew in the 50s but kept it quiet to save money
WHO (World Health Organization) found
75% of human disease is waterborne; usually from underground water contaminated by fuel
Boston Harbor
medical waste hit public beaches
Types of contaminants
organic, inorganic, and radioactivity
organic contaminants
often lead to cancers
inorganic contaminants
metals that lead to developmental problems
leads to prenatal damage
Number 1 cause of environmental crime & the damages that people incur
criminal negligence
asbestiosis & lung scarring
air contamination leads to
respiratory diseases
Hemloch, Michigan
DOW chemicals resulted in levels 6x higher than other places
used in frying pans, carpets, clothing, eye-glasses, electrical wires, and fast-food packaging; some is known to cause cancer and other problems in animals; DuPoint (producer); found in water, fetal cord blood, deformed children
perfluorooctanoic acid, a waxy, soaplike chemical used to make Teflon that may cause cancer, birth defects, and other serious medical problems; substance in the blood of people worldwide (in more than 90% in US); exposure to even low levels could be harmful
Not in My Backyard concept (NIMBY)
toxic terrorism & environmental racism
toxic terrorism
exporting toxic waste to 3rd World countries and creating unsafe working environments
environmental racism
disproportionate amount of environmental damages in areas of minorities
Reagan's deregulation era
companies profit more; when something did happen and there wasn't overwhelming evidence of proof, it was a "good faith" accident
construction of American-owned polluting factories that have crossed the Rio Grande because labor is cheap and environmental regulation is lax
1980 Superfund Act
(Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA); remedies for uncontrolled and abandoned waste sites; company that dumped it has to get rid of it or pay gov't to get rid of it; most ineffective piece of legislation-takes waste from one area to another
Walmart has paid
over $1 million dollars in environmental damages
Deterrence for environmental crimes
nontraditional sanction: $ to the community for betterment, and restitution: corporate probation
Asbestos creators
knew it was harmful: family workers of those who worked in the factor were affected, too; brown lung disease
whistleblowers of companies with radioactivity
had radioactive agents put on their clothing, or their mask would have a hole
Karen Silkwood
mysterious death of whistleblower
lightweight metal used for weapons, delayed violence (15-20 years later), dust causes diseases
industrial accident at Tyson Foods
two workers died in a vat of decomposing chicken parts; fined (slap on the wrist); fine was about 4cents in comparison to their profits
steelmaking industry
loss of limbs and lives
companies save money by
not maintaining machines' safety features
untrained employees, unsafe machines; amputations and burns were routine
employees have been told to
work on machines while they're turned on, work in an unsafe area of the factory for higher pay (Brazil)
Companies often move hazardous plants
to other countries to save money and avoid litigation
Just deserts
the incarceration of environmental criminals-with the attendant loss of liberty and employment, and acute embarrassment
mens rea
sometimes isn't present with environmental crime, so it is difficult to prosecute
ringer or shill
placed in a broadcasted church audience to make it appear that people are being healed
social costs of WCC
become cynical, demoralizing costs, violates trust, and social disorganization
Some unethical church leaders
Benny Hinn, Schulers, Paul and Jan Crouch; often ordain family members & employees to avoid paying taxes
Robert Merton
white-collar crime mirrors American culture, with its strong emphasis on achievement and what has been termed the "fetishism of money"
Nineteen Percent
American Family's customers (Magazine) are over 65.
laissez-faire (page 46)
a doctrine opposing governmental interference in economic affairs beyond the minimum necessary for the maintenance of peace and property rights
Targeting of the elderly
According to a congressional subcommittee, senior citizens, who comprise about 12 percent ofour population, make up at least 30 percent offraud victims
The FBI estimates
there are 5,000 "boiler rooms" in Southern California alone.
"rip and tear" Scam (page 54)
Here,telemarketers call previous victims, posing as law enforcement agents. They offer to help recover some ofthe victim's losses ifthe victim will pay an official fee for the recovery effort.
Between 1995 and 1998 an FBI operation (PP 55)
"Double Barrel" produced criminal charges against nearly 1,000 telemarketers
Hundreds of thousands of homeowners have been victimized
Many are targets because they are old or illiterate. Others are vulnerable simply because they are poor
Three advertisement categories classified by the FTC
informative, puffing, and deceptive ads.
types of ads
"Informative" ads are probably the least visible. Far more ubiquitous is a second category—"Puffing" ads, featuring self serving ballyhoo or irrelevant celebrity endorsements. The third and most insidious category, "Deceptive" ads,is characterized by misleading or un-true claims
Pharmaceutical industry that shattered the record for antitrust fines
The Swiss pharmaceutical giant "Hoffman-LaRoche" paid a $500 million fine for its part in a global price-fixing conspiracy
Two frequent targets of major antitrust litigation (PP79)
Oil industry and the airline industry.
white-collar crime
Sutherland defined white-collar crime as "crimes committed by a person of respectability and high social status in the course of his occupation."
journalists known as "muckrakers (PP 4)
Began to write shocking accounts ofoutrageous corporate conduct
Since the 1930s
the FBI first began collecting crime statistics in its Uniform Crime Reports,the federal government has poured billions ofdollars into the creation ofdata bases that measure traditional, or "street," crimes.
"demoralization costs"
influential business executives, powerful politicians, and respected members of the professions are seen
flaunting the system, often suffering little or no punishment for their misdeeds, it weakens the average citizen's respect for the law
Brown & Williamson tobacco company declares: (pp 101)
"We are in the business of selling nicotine."
California company, DNA Plant Technology (DNAP)
Pleaded guilty to conspiring with Brown & Williamson to boost the nicotine level in tobacco. "DNAP illegally shipped and smuggled genetically altered seeds to Brazil, where Brown & Williamson grew a tobacco plant called Y-1 that contained twice the amount of nicotine
When Merrill Dow Pharmaceuticals began marketing Nicorette gum
Philip Morris retaliated by canceling chemical purchases from Merrill Dow's parent company
The most serious charge raised against the tobacco industry (pp103)
Involves its covert campaigns to addict teenagers to nicotine in order to create lifetime smokers.
Percentage of adult smokers that began as teens
90%, and the tobacco companies are well aware-lifelong customers
After lengthy negotiations, the tobacco industry agreed, in 1997, to a proposed settlement with the attorney generals of 40 states
Under the agreement, the tobacco companies would pay damages of $368 billion.
The tobacco industry symbolizes
"postponed violence" of white-collar crime.
Using automobile manufacturing as a model
Two basic elements of corporate disregard for consumer safety: (1) resistance against safety devices; and (2) defects in design.
What happens to products after they are found to be safety hazards?
1. They are simply sold again. 2. treated garments were
shipped overseas to be sold in the Third World following the domestic ban. This practice known as "dumping".
The poultry industry is considered especially pathogenic because of its susceptibility to
"Salmonella" bacteria—the leading cause of food-borne sickness
Campylobacter bacterium
Considered the leading bacterial cause of
foodborne illness; infects between 70 and 90 percent of all chickens.

The salmonella outbreak was blamed for at least eight deaths and 575 illnesses in 43 states.
An analysis conducted by two environmental groups in 1995found traces of pesticides
In 53 percent of the baby food tested.
antiobesity drug treatment fen-phen
. "American Home Products", which marketed the dangerous fenfluramine part of the fen-phen, American Home had pulled Pondimin off the market in 1997 at the request of the FDA, after a Mayo Clinic study linked it to potentially fatal heart valve damage.
Became the target of many tort lawsuits alleging that it caused horrible birth defects in the children ofsome mothers who took the drug.
Developed in Europe, "Thalidomide"
Was a sleeping potion for which the pharmaceutical firm of Richardson-Merrell. "Even so, Merrell continued to distribute free pills to doctors who gave them to patients, including pregnant women--A drug the FDA refused to approved in the USA.
Richardson-Merrell, the company that sought to bring thalidomide to the United States, had the ignominious distinction of marketing a second disastrous
"wonder" drug simultaneously. It was called MER/29, a cholesterol inhibitor intended for use by heart patients. It was used by nearly 400,000 Americans Merrell already knew that 25 out of29 rats in its own laboratories had incurred eye damage after being given the drug.The company falsified lab reports.
Eli Lilly, marketed a painkiller called Oraflex
Evidence later showed that Lilly had known that 26 deaths had been linked to the drug overseas.
An example of the types of cases included under this category would be that of an Indiana man who sold
Used "heart pacemakers". Some had been dropped on the floor during surgery; others had been determined to be faulty. The irresponsible entrepreneur, Michael M. Walton, was convicted offraud in 1994 and received a six-year sentence.
Boston company that made heart "catheters"
they were accused of using patients as "guinea pigs" to test new products. The tests resulted in the death of at least one patient.
The Dalkon Shield was an intrauterine birth control device. By the Robins Company . At a production cost of 35 cents per unit.
At least 20 women died as a result of the Dalkon Shield. In addition, hundreds of others who conceived while wearing the shield gave birth prematurely to infants with "grave congenital defects, including blindness, cerebral palsy, and mental retardation.
Rely Tampons
It identified 55 fatal cases and 1 ,066 nonfatal case of toxic "shock syndrome".
The fact that "80 percent ofAmerica's elderly
Have at least one chronic health problem that restricts them
kills more people than those who die from all crimes of violence put together.
Chelation therapy is touted as a cure for arteriosclerosis
"No one has ever substantiated this claim." It is promoted for treating heart
attacks, as well as such conditions as colitis, Down syndrome, acne, radiation damage, senility
There are three basic forms ofquackery
1. Nutrition "Unsound nutrition claims are made on radio,television, in newspapers, books,and magazines. 2. Drugs The eternal dream ofdiscovering the Fountain of Youth has created a boom market
for fake antiaging drugs. 3. Devices There is a labyrinthine array of quack devises currently available to consumers. Some of them are merely incredible, such as the use of gemstones to "cure" a multitude ofmaladies.
EPA estimates that
Of the 100 billion tons of hazardous waste produced each year in the United states, 90 percent is disposed of in an environmentally unsafe manner.
of the 100 billion tons of hazardous waste produced each year in the United States.
90 percent is disposed of in an environmentally unsafe manner.
LOVE CANAL (Hooker Chemical corp) most compounds discovered:
1. Dioxin, the most toxic synthetic compound ever made. 2. Benzene, called "the most powerful carcinogen known. these
causes,multiple miscarriages, birth defects, cancer death, epilepsy, central nervous disorders, and more
Hyde Park, New York
The Hyde Park landfill contains 80,000 tons of chemical deposits—including over one ton of dioxin.
"black mayonnaise"
(San Francisco Bay or Boston Harbor) bay bottoms covered by a foul and toxic combination of sediment, sewage and petrochemical waste appropriately.
According to the World Health Organization
More than three-quarters of allhuman disease is waterborne.
Three major kinds ofcontamination have been identified.
1. Organic contamination, which has been linked to various forms of cancer. 2. in organic contamination, most notably metals such as lead, which are suspected of causing developmental problems in children 3. Radioactivity, which is believed to cause prenatal damage.
Although the carcinogenic properties of asbestos is an area of medical controversy.
a number of scientists have related waterborne asbestos to gastrointestinal cancer.
Truckers, known as "sludge runners,"
actually open the spigots of their storage tanks and release toxic waste as they drive.
Report in the Bulletin of the Atomic Scientists was titled:
The Wages of Sin
Erin Brockovitch
mother who fought PG&E who dumped hexavalent chomium in the area's private groundwater wells that led to birth defects and cancer in Hinkley, CA ($333M settlement)
DuPoint (Teflon) Settlement
largest civil administrative penalty the EPA had ever obtained under a federal environmental statute
black mayonnaise
toilet paper and half-dissolved feces, foul and toxic combination of sediment, sewage and petrochemical waste in the bottom of American bays
magic mineral
asbestos; acts as an insulator and fire retardant; strengthens concrete and sound-proofs, allows for high traction and resists chemical breakdown
many churches ordain
their family members and employees to avoid paying taxes
Benny Hinn, Crouch's, Schuler, and Swaggert
unethical church leaders; modest income, lavish lifestyle
Dick Clark
Payola; American Bandstand: wouldn't let you on the show until he had a piece of you (writing credits/rights)
Elvis Presley
only artist to succeed without Dick Clark owning any part of his music
Clear Channel & Infinity
own most radio stations and have interest in major labels, studios, amphitheaters; have the same sort of person signed to each company
Lloyd Bridges
sued by his fans; celebrities can be sued if their endorsements don't work
Dick Clark: American Publishers Clearinghouse
magazine subscriptions sweepstakes made the elderly come to Miami because they thought they won (Clack and Ed Mcmann)
paper entrepreneurism
capitalism; the best financial minds in America are now wasted on computer-generated models that produce nothing but enormous paper profits and zero-sum games of dubious value to the overall economy
Talcott Parsons
institutions as "the backbone" of the social system
Quiz Show Scandal
1959; sensational congressional investigation revealed that the "geniuses" were fakes and that the programs were "fixed"; robbed the American people of their idealism and promoted a dispiriting national cynicism instead
journalists often
write stories for a respected newspaper and lie to sell copies
Lawrence X. Cusack III
forged love letters between JFK and Marilyn Monroe
James Frey
"A Million Little Pieces;" claimed it was non-fiction (The man who Con Oprah)
Clifford Irving
wrote "The Autobiography of Howard Hughes" claiming that Hughes knew
Durkheim on religion
it is society's consciousness of itself
largest establishment that is demoralizing
Sun Myung Moon
Leader of the Unification Church; followers were called "Moonies"; conservative and politically active-defended Nixon's presidency; raised money selling flowers and tea; caught for tax fraud and came back to lead church
Henry Lyons
church leader that used his affinity (race and religion) to sell nonexistent phone directories of his congregation. He duped these companies
by promising them access to nonexistent member-
ship mailing lists. Lyons created his phony lists
using a computerized telephone directory.
Peter Popoff
sold "holy" plastic shower caps and claimed to be a healer; healed a "woman" of uterine cancer
James Randi
veteran magician who has become America's foremost debunker of paranormal claims; manipulates the environment to prove the healer is a fraud
Jimmy Swaggert
admitted to long-standing obsessions with prostitutes, voyeurism, and pornography. His congregation was so used to him condemning people caught doing these things that they didn't forgive him
PTL (Praise the Lord ministry)
Jim and Faye Bakker sold timeshares and built a water park for Jesus; secretary Jessica Hahn claimed to be sexually assaulted
Jim Baker
sentenced to 45 years then reduced to 18 for fraudulently raising more than $158 million in contributions
Billy Graham
different from the other televangelists because he doesn't always ask for $ & offers up his books-not trying to hide anything
Darlene Gillespie
mouseketeer that was convicted of 12 counts of conspiracy, securities, fraud, mail fraud, obstruction of justice, and perjury by scheming to make money in the stock market without paying for any stock
insider trading
stockholders, directors, officer, or any recipients of information not publicly available who take advantage of such limited disclosure for their own benefit
Dennis Levine
"Wall Street's worst nightmare come true": continually leaked when a merger was going to happen to drive up the value of the stock quickly; "Mr. Diamond"; became a government witness against his co-conspirators
Ivan Boesky
Ivan the Terrible; arbitrager-investment specialist who speculates in so-called "deal stocks" on behalf of a brokerage house, an investment bank, or a limited partnership; his investment fund was returning 142%; made at least $203M in illegal trades (more than 4x the SEC's $50M claim; "Crook of the Year"; arresting him was like getting a madam's datebook
Martin Siegel
provided Boesky with inside information in exchange for a percentage of the profits Boesky would derive from that information; not looked down upon because he never agreed to testify against former associates to save himself
Michael Milken
personification of Wall Street corruption; "Junk bonds": high-yield, low-grade bonds (crap bonds); his organization controlled 25% of WS's high-yield bond market; can be credited to the market's almost complete lack of regulation; fed racketeering RICO charges were filed
one investor buying and holding stock for another in order to conceal the true owner's identity
some companies would be compelled to buy back a raider's stock at a huge premium to make the raider go away. This diverted corporate assets, which could have been used for research and development or job creation
Lincoln Savings & Loan (Irvine)
largest bank failure in American history: selling $250M in unsecured bonds falsely represented as secure
second approach to controlling insider trading
escalating the risk
"front running"
managers buy stock for themselves before buying it for their funds, or one broker tipping off another trader of an impending transaction in return for some kind of kickback; stealing from an institution
The Great "Chat Room" Conspiracy
largest criminal insider trading case ever; first time Internet was the center of an insider trading scheme; signaled the emergence of a significantly new public arena for a crime once largely restricted to the private world of the Wall Street elite
Blue Horseshoe
code name for the ruthless coporate raider Gordon Gekko
Martha Stewart
first board member ever involved in insider trading
Martha Stewart's buyers
lost 84% of their investment so that she could avoid a $50,000 loss
pump and dump
raising the stock just for it to plummet so that they can make a profit
Jonathan Lebed
youngest person every charged with illegal stock dealing; only minor ever sanctioned by the SEC; pumped and dumped
Orange County Bankruptcy
largest municipal failure in history; "fraud capital of the U.S."
cotton dust
contains certain particulate materials that produce a serious and eventually irreversible disease called byssinosis (brown lung)
J.P. Stevens
greatest labor-law violator in America
offenders paying victims for any loss caused by the offense or the performance of remedial measures to eliminate present or future harm associated with the offenses, such as mandatory clean up
imposition of "environmental audits" on offending companies
nontraditional sanctions
offending firms give money to various state or local environmental programs, community service project, etc.
EPA recognizes criminal sanctions as its most powerful tool; greater deterrence effect than civil penalties because it "discourages corporate willingness to view environmental misconduct as a mere economic risk"
Brio Oil Refinery
dumped waste into unlined pits covered with soil: between 500,000 and 700,000 cubic yards of soil contaminated with fuel oil residues, styrene tars, heavy metals and volatile organic compounds (VOC); ground water contaminated with vinyl chloride and benzene; children born without reproductive organs, autoimmune and hearing problems, congenital heart, lung and brain defects, etc.
Barry Minkow
16 year old with a carpet cleaning company funded by stealing jewelry from his grandmother, insurance fraud, counterfeiting, credit card fraud; ponzi scheme that took off and investors were buying stock in
covert substitution of low-quality counterfeit versions of brand-name consumer products: bootlegging of videotapes, video games, and computer software, garment industry, jewelry
Reed Slatkin
ponzi scheme in the Church of Scientology; affinity scam-friends and church members; "regged" the members ruthlessly and relentless to solicit donations
Russell Erxleben
Saints football player that ran a ponzi scheme and didn't tell clients about their losses and sent them false financial statements
Allied Chemical Corporation (ketone)
highly toxic pesticide that induced tremors, caused liver abnormalities, cancers, kidney lesions; toxins in hair, clothing, food; never sanctioned, only fined for violating water-pollution control laws when it dumped quantities into the James River, VA.