White-Collar, Corporate, and Organized Crime: Key Concepts and Law Enforcement

What is white-collar crime?

Nonviolent illegal acts committed by businesses or individuals for financial gain.

What company was involved in one of the largest accounting scandals in history?

Enron

What illegal tactics did Enron use to hide its debt?

Illegal accounting practices and the creation of shell companies.

Who was the chief financial officer of Enron during the scandal?

Andrew Fastow

Which accounting firm was involved in the Enron scandal?

Arthur Anderson

What government agency investigated Enron?

The Securities and Exchange Commission (SEC)

What was the total estimated loss for shareholders due to Enron's misconduct?

$74 billion

What happened to Enron in 2001?

Enron declared bankruptcy.

What is corporate crime?

Illegal acts committed by a corporation or individuals within the company to benefit the company.

What is corporate fraud?

Misrepresentation of financial or business information by a company.

What was one method Enron used to misrepresent its financial status?

Moving financial losses to a separate shell company.

Who is Elizabeth Holmes?

The founder of Theranos, charged with fraud for misrepresenting her blood testing technology.

What was the outcome of Elizabeth Holmes' actions?

She was convicted of fraud and sentenced to 11 years in prison.

What is false advertising?

Making untrue claims about a product, often in advertisements.

How does white-collar crime compare to street crime in terms of financial impact?

White-collar crime costs an estimated $300 billion annually, while street crime causes about $15 billion in losses.

What advantages do white-collar criminals have over street criminals?

They are often well-educated and have access to legal resources.

What is the typical punishment for white-collar crime?

Fines, which are often cheaper than complying with regulations.

What is the significance of the Enron scandal in terms of white-collar crime?

It exemplifies the devastating impact of corporate fraud on employees and investors.

What can lead to the flourishing of white-collar crime?

Lack of enforcement of regulations and minimal penalties for violations.

What is one consequence of corporate fraud for consumers?

Consumers may purchase products that do not perform as advertised.

What was the role of Arthur Anderson in the Enron scandal?

They approved Enron's fraudulent accounting reports instead of reporting them.

What happened to Arthur Anderson as a result of the Enron scandal?

The firm ultimately collapsed.

What is the impact of corporate fraud on competition?

It can mislead competitors about a company's true financial status.

What is an example of a product falsely advertised by a company?

Theranos' blood testing machines that did not perform as promised.

What is the estimated annual cost of white-collar crime?

$300 billion

What can be a result of white-collar crime on employees?

Loss of pensions and benefits due to company bankruptcy.

What is one reason why white-collar crime is less visible than street crime?

Street crime is more often discussed in law enforcement and public safety contexts.

What is a hallmark of corporate fraud?

Producing profits well beyond what similar companies achieve.

What company faced charges for false advertising in 2014?

L'Oreal

What agency regulates trade and protects consumers?

Federal Trade Commission (FTC)

What is restraint of trade?

Actions that interfere with free competition in the marketplace.

What is a monopoly?

When one business owns all means of producing a product or service, which is illegal.

What is price fixing?

When competing companies collude to artificially inflate prices.

What is considered illegal interference with competition?

Threatening competitors or driving them out of business.

What does it mean to falsely damage a company's reputation?

Spreading false rumors to harm a business's reputation.

What are unsafe products?

Products that endanger public safety, often due to negligence by manufacturers.

What incident involved Boeing's 737 aircraft in 2024?

Issues with production that led to safety concerns when a panel fell off during flight.

What is occupational crime?

Crimes committed by individuals in the workplace, such as theft or fraud.

What is embezzlement?

Stealing money from one's employer.

What is payroll theft?

Falsifying hours worked to receive unearned pay.

What are kickbacks?

Payments made to an employee by a vendor in exchange for business favors.

What is siphoning?

Stealing small amounts of money over time from a business.

What is overbilling?

Charging customers more than the actual price for goods or services.

What is professional occupational crime?

Crimes committed by professionals that violate ethical standards, such as falsifying records.

What constitutes state authority occupational crime?

Abusing government power for personal gain, such as accepting bribes.

What is organizational occupational crime?

Crimes committed by individuals for personal benefit, rather than for the company.

What is shrinkage in a business context?

The loss of inventory due to employee theft.

How much do shrinkage costs retail businesses annually?

About 2% of their annual sales.

What can businesses do to minimize shrinkage?

Develop solid inventory practices and maintain good record-keeping.

What is the consequence of corporate crime?

It can lead to legal penalties and loss of consumer trust.

What is the role of consumer protection laws?

To ensure companies prioritize safety over profits.

What are the potential outcomes for professionals committing occupational crime?

Criminal penalties and loss of professional credentials.

What is the difference between corporate crime and occupational crime?

Corporate crime involves the corporation as a whole, while occupational crime involves individuals within the workplace.

What is the impact of monopolies on consumers?

They disadvantage consumers by limiting competition and leading to higher prices.

What is the significance of scientific evidence in advertising?

It is required to substantiate claims made about a product's effectiveness.

What is organized crime?

Criminal activities orchestrated by powerful groups on a large scale.

When did organized crime become entrenched in American culture?

In the 1920s and 1930s with the rise of prohibition.

What criminal enterprises did organized crime engage in after prohibition?

Gambling, prostitution, racketeering, fraud, extortion, bribery, and threats.

How does organized crime use intimidation?

By demanding protection money and threatening brutal punishment for betrayal.

What role did organized crime play for immigrant groups in the U.S.?

It protected immigrant groups during a time when traditional law enforcement ignored them.

How does organized crime gain political influence?

By collaborating with those in power and engaging in corruption.

What is one way organized crime appears legitimate?

By investing in legitimate businesses that provide a cover for illegal activities.

Why is it difficult to prosecute leaders of organized crime?

Leaders rarely commit crimes directly and use lower-level members to take risks.

What is loan sharking?

The loaning of money with extremely high interest rates and strict collection terms.

How does organized crime intersect with terrorism?

Organized crime can fund terrorism and exploit political weaknesses that aid terrorist organizations.

What is international terrorism?

Harmful acts across national borders to make a political statement.

What significant events are examples of international terrorism?

The 9-11 attacks on the World Trade Center and the Pentagon.

What is domestic terrorism?

Harmful acts within a nation's borders to make a political statement.

What recent example illustrates domestic terrorism in the U.S.?

The shooting of 10 black Americans in Buffalo, New York, in May 2022.

What is a common form of anti-government violence in domestic terrorism?

Attacks on law enforcement, such as the killing of police officers in Dallas, Texas, in 2016.

How has the Internet changed terrorism?

It allows extremist groups to connect with the public and spread misinformation.

What is cyberterrorism?

Using computers and information technology to disrupt society for political means.

What was created in response to the 9-11 attacks?

The Department of Homeland Security (DHS).

What is one mission of the Department of Homeland Security?

To ensure better communication and collaboration between existing security agencies.

What does organized crime rely on to maintain its operations?

Cultural or ethnic ties for trust and recruitment.

What is the impact of technology on organized crime?

It facilitates global organization and complicates prosecution efforts.

What is racketeering?

Commercial profit from illegal activities such as fraud and extortion.

How does organized crime exploit gambling?

By providing loans to gamblers who cannot seek help from legitimate sources.

What is the relationship between organized crime and political instability?

Political weakness allows organized crime to flourish and can aid terrorist organizations.

What are some crimes associated with international organized crime?

Drug trade, financial fraud, counterfeiting, and human trafficking.

What is the significance of cultural differences in organized crime?

They can be exploited to recruit members and build loyalty within communities.

What is the mission of the Department of Homeland Security (DHS)?

To ensure better communication and collaboration between existing agencies.

Which agencies are included under the DHS?

U.S. Coast Guard, U.S. Immigration and Customs, U.S. Secret Service, and Federal Emergency Management Agency (FEMA).

What is the role of FEMA?

To provide help during major crises such as terrorist attacks, hurricanes, or earthquakes.

Why was the FBI created?

To address organized crime across state lines during the Prohibition era.

What types of crime does the FBI handle?

White-collar crime, public corruption, counterterrorism, and violent crimes.

What is the primary focus of the CIA?

International affairs and keeping the government informed about foreign activities.

How do law enforcement agencies collaborate?

They often work together on investigations that cross jurisdictional lines.

What is jurisdiction in law enforcement?

The area where an agency has authority to enforce laws.

What is the Use of Force Continuum?

A set of guidelines that defines the range of reactions and use of force that law enforcement officers should use.

What is the first response in the Use of Force Continuum?

Verbal commands.

What is the last resort in the Use of Force Continuum?

Lethal force.

What are de-escalation techniques?

Methods used to reduce tension and threat in a situation.

What should law enforcement officers assess before using force?

The nature of the threat and the compliance of the subject.

What are public order crimes?

Crimes that violate moral standards or public opinion, such as public drunkenness or prostitution.

What is the broken window theory of policing?

The idea that enforcing laws against minor crimes helps prevent more serious crimes.

What is a common criticism regarding enforcement of public order crimes?

Ethnic minorities are disproportionately punished for these crimes.

What kind of training do law enforcement officers receive?

Training on procedures, weapon deployment, and high-speed vehicle operation.

What is the goal of law enforcement agencies?

To address crime and ensure public safety.

What happens when a local police department finds a crime tied to a larger organization?

They may turn the investigation over to the FBI.