Avocational crime

WHITE COLLAR CRIME IN CONTEMPORARY SOCIETY 4TH ED.

CHAPTER 4

OCCUPATIONAL CRIME AND AVOCATIONAL CRIME

Trusted Criminals

Designed by: Jordan Land, M.S.

Retail Crime and Service Fraud

Retail businesses are often thought of as victims of crime, whether by pilfering or embezzling employees, shoplifters, or robbers and burglars

Retail stores engage in a wide range of deceptive and illegal activities

Fraudulent advertising

Illegal pricing practices

Sale of fraudulently represented merchandise

Purchase and resale of stolen goods

Retail Crime

Paul Blumberg has documented illegal and unethical practices by businesses

He identified other deceptive practices in retail crime

Adulteration of products

Short weighing

Bait-and-switch

Bar-code prices

Collection of taxes on nontaxable items

Wage theft

Defrauding Vulnerable People

In a study conducted by David Caplowitz, he found that the poor were:

Being overcharged

Sold inferior goods

Victimized by deceptive credit practices, complicated consumer contracts, and lawsuits threatening wage garnishment

Despite new laws and consumer affairs initiatives, these fraudulent practices are hardly extinct

Service Business Fraud

Repair service businesses have a notorious reputation for cheating customers

Complaints about auto repairs constitute the largest percentage of consumer complaints according to the National Highway Traffic Safety Administration

These frauds include:

Highway bandits

Estimate scams

Maintenance hook schemes

Part replacement problems

Service Business Fraud

Many consumers are unaware that they have been victimized

When they suspect that they have been victimized, they are skeptical to report the crime because they do not believe that it will lead to effective action

All consumers will be “robbed” by unscrupulous retailers and entrepreneurs

Medical, Legal, Academic & Religious Crime

Profession refers to occupations characterized by higher education and training; specialized technical knowledge and skills, and a high degree of autonomy

Semi-professional has been applied to some occupational groups such as pharmacists and nurses

Some who claim professional status but lack real autonomy

Lawyers, physicians, scientists

These individuals work for large corporations

Medical Crime

Physicians are well compensated, are typically accorded a high level of trust, and exercise unusual power or professional dominance over patients

Among the specifically illegal and unethical activities committed by physicians:

Fee splitting

Taking or offering kickbacks

Price fixing

Unnecessary operations

False and fraudulent billing

Medical Crime as a Violent Crime

The performance of unnecessary surgery is the single most disturbing of medical crimes

The most common forms of unnecessary surgery are:

Removal of tonsils, hemorrhoids, appendixes and uteruses

Heart-related surgery

Caesarean section deliveries

Performing unnecessary surgeries can cause paralysis, blindness or other forms of permanent injury

Medical Crime as Fraud

Medicaid and Medicare fraud by physicians have been characterized as an especially “pure” form of white collar crime because it occurs within the context of routine occupational activity

Overutilization is perhaps the most common form of medical fraud, and it is especially difficult to prove and prosecute successfully

Specific techniques used in this fraud are:

Ping-ponging, family ganging, steering, upgrading, code games and unbundling

Legal Crime

Legal crime refers to lawyers engaging in criminal conduct in the course of discharging their professional duties

It is more common for lawyers to become involved with, facilitate, or help cover up illegal enterprises while maintaining primary commitment to the conventional and legitimate tasks of a lawyer

Legal Crime as Fraud

The intangibility of a lawyer’s work provides special opportunities for overbilling clients

It is often proven difficult to establish criminal intent in such cases of alleged fraudulent conduct

Legal Crime as Collusion

The ethics code of the American Bar Association requires lawyers to keep in strict confidence any knowledge of a client’s past crimes and prohibits lawyers from advising or assisting a client in the commission of any illegal or fraudulent act

A number of major insider trading cases in the 1980s involved criminal charges against lawyers who passed on privileged information about pending corporate takeovers

Academic Crime:

Professors, Scientists and Students

The fact that professors engage in less occupationally related crime than do doctors and lawyers is probably more a function of fewer opportunities for such activity than a matter of greater personal integrity among professors

Academic crimes refer to plagiarism, embezzlement of university discretionary funds, forgery, claims about credentials, etc.

Plagiarism refers to use or misappropriation of ideas or words of others without giving them credit

Academic Crime:

Professors, Scientists and Students

Outright embezzlement is hardly unknown in the academic environment

Administrators and employees often have better opportunities than professors to embezzle or obtain improper payments

Some academic researchers have taken advantage of the special access they have to rare and valuable artifacts and manuscripts to steal these items and sell them for profit

Academic Crime as Fraud

It has proven difficult to develop reliable data on the extent of scientific fraud, which principally takes the form of fabricating, manipulating, and suppressing data

Claims that outright scientific fraud is rare are commonly made, but whether or not they are accurate have not typically been based upon scientific research

Student White Collar Crime

Students commit various illegal acts that have nothing to do with white collar crime, including vandalism, drunkenness, illicit drug use, car theft, etc.

Student white collar crime is best defined as illegal or harmful conduct committed specifically in the context of their student role

For gain or advantage

The clearest form is cheating

Student White Collar Crime

Colleges are also concerned that many applicants engage in “résumé fraud” by making false claims about their achievements and activities

New technology has greatly increased the opportunity for cheating

Academic cheating takes many forms:

Cheating on exams, home work and term papers

Religious Crime

Religious crime may be the most disturbing of all forms of crimes by professionals

Religious leaders may generate a bottomless well of trust among gullible believers

Some religious leaders have defrauded believers and used offerings or donations for corrupt purposes

Employee Crime

Employees stealing from their employers is one of the more common images of white collar crime

When managers steal, losses average $250,000

Executives and managers are often in a position to award themselves huge bonuses and a wide range of expensive “perks”

Clark and Hollinger define employee theft as:

The unauthorized taking, control or transfer of money and/or property of the formal work organization perpetrated by an employee during the course of occupational activity which is related to the employment

Employee Crime

A great deal of employee crime is not readily discovered

Even when discovered it may not be reported to any official agency

No agency collects and publishes statistics on the range of activities encompassed

Only rough estimates based on diverse sources and statistical extrapolations are available for study

Forms of Employee Theft

Withholding effort at work can be viewed as a form of employee crime

Employees use office supplies and machinery for personal use, make personal phone calls on a business phone, etc.

Employee theft occurs on a number of different levels:

Pilfering refers to petty theft

Chiseling refers to cheating or swindling

Fraud is theft through misrepresentation

Embezzlement refers to the destruction or fraudulent appropriation of another’s money which has been entrusted to one’s care

Employers’ Response to Employee Theft

Some employee theft is tolerated, sometimes even encouraged, by employers to compensate for low wages and poor working conditions

Workers who engage in it are less well positioned to organize and make demands

Employers’ Response to Employee Theft

Many employers are unlikely to involve police when they discover significant employee thefts because:

To do so risks relationships and productive patterns at work

Exposes improper or even illegal practices of the employer

Possibility of garnering bad publicity if arrests and criminal trials ensue

Alternative Forms of Employee Crime

Theft of ideas, designs and formulas are another form of employee crime

Such theft can be expected to become an increasingly costly problem in the current “information revolution”

Not all employee crime against the employer takes the form of theft

Employees may commit sabotage

To conceal their own errors, to gain time off or for more pay, or to express their contempt and anger with their work and employer

Some Factors in Employee Theft

An extensive study of employee theft found that employees who commit theft are more likely to be young males, and unmarried

Company property refers mainly to basic, bulky components and tools

Property of uncertain ownership refers to small inexpensive items like nails, bolts, drill bits, etc.

Personal property refers to monogrammed clothing, wallets, jewelry, personal modified tools, etc.

Conditions in the Workplace

and Employee Crime

During the period of 1750-1850, opportunities for employee theft became far more widely available

In the more recent era, technology has facilitated new forms of employee crime

The most important factors influencing employee theft involve:

Workplace conditions such as the size of the organization

Conditions in the Workplace

and Employee Crime

Smigel (1970)found that respondents were more prepared to steal from large organizations than small ones

An employee stealing from a large organization is far less likely to suffer measurable harm from conventional levels of theft

The larger the organization, the smaller the risk of being caught

Conditions in the Workplace

and Employee Crime

Other studies have found that employees’ dissatisfaction with the company or with supervisors was associated with higher rates of employee theft

Opportunity to steal is a major determinant of employee theft

Those who have the greater access to things worth stealing are the most likely to do so

Avocational Crime and White Collar Crime

Avocational crime refers to occasional economic crimes committed by respectable members of society outside of an occupational context

Avocational crimes are similar to the concepts of occasional property crime, folk crime and mundane crime

Occasional crime is an amateur, small-scale property theft or destruction

Avocational Crime and White Collar Crime

Folk crimes apply to everyday deviance, like traffic violations and poaching

Mundane crimes are commonplace, innocuous, and often dull or routine opportunistic forms of lawbreaking with relatively low visibility

Avocational crimes include:

Evading personal taxes

Defrauding insurance companies

Providing false statements in connection with personal loans and obtaining credit

Stealing services

Stealing copyrighted material

Income Tax Evasion

Income tax evasion is classified as a form of occupational or individual white collar crime

Failure to comply with tax law may take different forms

Failure to file, non-reporting of income, underreporting of income, etc.

Tax evasion defined by the IRS is:

An act involving deceit, subterfuge, and concealment. It is, of course, illegal

However, tax avoidance, the arraignment of a taxpayer's affairs to minimize tax liability, is legal

Income Tax Evasion

The complexity of tax law makes it difficult to distinguish between tax evasion and tax avoidance

Income tax provides 2/3 of federal tax revenue

The IRS has been more vigorous in the pursuit of tax protesters (those advocating tax evasion) than of tax straddlers (those using illegal tax shelters)

According to one study, the more prevalent an individual perceives tax evasion to be, the more inclined that individual will be to commit tax evasion

Other Forms of Avocational Crime

Insurance fraud is widely recognized to be a growing problem in the U.S.

Doctors, lawyers, insurance adjusters, and the police may be involved in facilitating false injury, damage and theft claims

Much insurance fraud generally is avocational crime committed by respectable middle or upper class members of society

Much avocational crime is less stigmatizing than all forms of white collar crime because the primary victims are most typically the government or large corporations, and because the losses appear to be more abstract than for other forms of theft or fraud

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