Global implications of White Collar Crimes

Question

Write a 3250 words paper analyzing the pros and cons of the topic. Your response should be size 12 Times New Roman Font and double spaced. Please cite any sources you use. TOPIC: The Global implications of White Collar Crimes

Answer

Criminal activities can either be violent or non-violent. Violent crimes included robbery and any other illegal activity that leads to injuries of damages. On the other hand, non-violent crimes are those that are committed without excessive force.

In 1939, Edwin Southerland defined white-collar crime as that committed by a person of respectability or high social status in the course of their occupation (Gottschalk, 2017).

White-collar crime involves activities such as wage theft, fraud, bribery, insider trading, labor racket, and embezzlement. As the name suggests, such crimes are committed by those who have ‘white-collar’ jobs.

Research indicates that the main contributor to white-collar crime is financial gain (Sutherland, 2017). Such activities are likely to happen if those who are in office want to enrich themselves using the organization’s resources. Additionally, this type of crime is common in governmental entities and other business entities.

Even though white-collar crime does not involve violence, its impact on the economy, and the lives of those who are involved, it may be debilitating. In the contemporary world, this type of crime is evident in various occupations in almost all countries around the world.

According to a report published by the Guardian in 2018, the rate of white-collar crime has risen over the past few years. Traditionally, the number of white-collar crime cases was not as many as they are today.

However, political influence has been one of the significant challenges to the management of different companies and governmental entities (Winant, 2018). As far as white-collar crime is concerned, the question of whether it has benefits of negative impacts.

Although such type of crime may have negative implications on the economy, those who are involved may benefit in one way or another. This research paper analyses the pros and cons of white-collar crime. The paper will also focus on the implications of white-collar crime from a global perspective.

Methods

A survey was carried out to determine the implication types of white-collar crime. The survey was carried out in different countries to determine a global view of this type of crime. The primary sources of information included documentaries, documents, and survey questions.

The information in the various materials was used to determine the impact of white-collar crimes on the various entities and the economy at large.

The participants provided adequate information on what they knew about this type of crime. By reaching a large number of participants, the survey questions were sent through online platforms such as Survey Monkey.

Apart from the survey, case studies were also used to analyze the impact of white-collar crime. Five case studies were representing each crime. The cases focused on embezzlement, fraud, Ponzi schemes, and insider trading.

Procedure

The first step was to decide on the types of cases to deal with. The team selected the five most common white-collar crimes in the world. After that, the data collection was the next step. In this case, the data collection was done by experts who had participated in such an activity before.

After collecting data, various methods of data analysis, such as content analysis and narrative analysis, were used.

Results

Based on the data collected, 100% of the participants were aware of the various types of white-collar crimes. Most of them were also willing to provide examples that they have ever witnessed or heard about. This meant that this type of crime is evident in society.

One of the respondents provided information on the background of white-collar crimes. He stated that this type of crime started many years ago. Therefore, it has a significant impact on the economy.

A more significant number of participants reported that they have ever been involved in such crimes. Such involvements were either directly or indirectly. As far as direct involvement is concerned, twenty participants said that they have ever engaged in fraudulent activities for their benefit.

Those who involved indirectly reported that some of the senior officials in different offices are victims of white-collar crime. For instance, many employees of various companies said that their managers used the authority to enrich themselves.

There were mixed reactions in response to whether a white-collar crime was good or bad. As a result, 75% of the participants reported that white-collar crime was an offense that has ruined many companies and even entire economies. They stated that those who engage in such criminal activities should be convicted.

Their argument was based on the fact that those who embezzle an organization’s funds tend to follow their interests instead of that of the people. Moreover, they gave various examples of companies and government regimes that have been affected by white-collar crime.

On the other hand, 19% of the participants reported that white-collar crime is beneficial. A more significant number of these people were those who had been involved in while collar crime directly. Most of them were managers and senior officials of the government and companies.

They argued that such crimes are non-violent and do not cause any harm to people as compared to other criminal activities. They added that not everyone could engage in such activities unless they have an opportunity in any entity. The remaining 6% were not decided on whether this type of crime is good or bad.

A more significant number of publications contained the negative implications of white-collar crime. Many researchers wrote about the side effects that such a crime is likely to cause in society. However, a few documentations acknowledged the importance of white-collar crimes. The argument was based on a lack of opportunity.

Those who have the chance were considered to have a higher chance than those who did not have the opportunity. Additionally, some researchers argued that those who do not have the opportunity would also engage in such crimes as if given an opportunity.

In considering the five common forms of white-collar crimes, many respondents mentioned that they had been affected by fraud. Information obtained from the FBI indicated that most of the fraud cases involve falsification of financial information. Both government officials and business leaders have been found guilty of committing fraudulent activities.

Regarding corporate fraud, most of the victims act against the provisions of regulating bodies such as the Securities and Exchange Commission. The evidence of fraud was mostly associated with government officials.

As far as embezzlement is concerned, many respondents indicated that this type of white-collar crime is encouraged by those who are holding senior positions in organizations. Fraud is also one of the most common practices that affect the performance of a particular business.

Those who engage in this practice use their position to misappropriate funds. One of the respondents gave an example of the company that he was working for before the company collapsed. The company became bankrupt due to misappropriation of funds.

Therefore, the business could not sustain itself hence leading to closure. As a result, many people lost their jobs, including some of the senior managers who were involved in the scandal. In such a scenario, the managers benefitted while the workers suffered.

The participants remembered the origin of the word ‘Ponzi Schemes.’ The name originated from Charles Ponzi, a con man that was reported to have made $250,000 a day through his mail coupon fraud in the 1920s. The origin of this word indicated that such schemes have been affecting many people over the years.

Likewise, 30% of the respondents reported that they had an experience of conmen. Those experiences were either directly or indirectly. By direct interaction, it means that people had ever conned them.

On the other hand, indirect involvement means that they had heard about it from their friends or family members who had been conned. Today, there are a lot of investment schemes that promise a high return for little or no risk. Such investment opportunities tend to attract many people.

Ideally, many people would admire such an opportunity. These are the modern-day Ponzi Schemes that attracts new investors.

According to the findings, there are various schemes in the business industry. Due to technological advancements, some people have taken advantage of those who are not conversant with some technical aspects. The documentaries from various media stations revealed that many people had faced challenges on the internet.

The challenges included buying goods and services from online shops that are non-existent. In other words, some conmen have come up with different techniques that are used to steal from the public without violence. Some people have also been victims of online subscriptions that aimed at coning the members.

In such a case, some people who have adequate knowledge and skills in computing are using that opportunity to steal from others. Ponzi Schemes are also evident in hacking cases that have resulted in financial loss. The FBI reported that it has dealt with many cases involving hacking.

Discussion

Based on the results obtained from the research, white-collar crimes have affected many people in one way or another. Regardless of the impact that they have caused, some people have benefitted from them. The fact that white-collar crimes are money-oriented; those who successfully engage in it tend to get rich faster than other people.

For instance, Charles Ponzi made a lot of money in one day (Brickey and Taub, 2017). If he could do the same for one month or even a year, he would be more productive than those who are employed in various positions. However, people tend to ask whether white-collar crimes are good or bad.

Advantages of white-collar crimes

Despite the negative influences, white-collar crimes are there to stay. Technology allows criminals to stay ahead of law enforcement. Furthermore, technology-related crimes have increased in recent years. In the contemporary world, almost every business entity is threatened by cybercrime (Hirschi and Gottfredson, 2017).

The cases of cybercrime and other technology-related crimes have been experienced in many countries. According to the findings, a higher number of respondents reported that they had ever been affected by cybercrime.

Many entities are trying to mitigate the consequences of technology-related crimes for the safety of their financial resources.

Consequently, technological advancements are more dynamic than the law. The strategies and ways in which cybercrimes are conducted change day in day out. Technical experts tend to find ways to escape the wrath of the law.

Identifying criminals is a significant challenge since they tend to lack any evidence that might be used by the authorities. For instance, some conmen use machines that hide the IP address to conceal their identity as well as the location from which they are operating.

Another advantage of white-collar crimes is that it is attractive. Unlike other criminal activities, a lack of violence attracts people to engage in white-collar crimes. Moreover, the virtue of office holding also invites the officeholders to participate in such crimes.

Those who are high in command in an organization would think that they are not accountable to anyone. Therefore, they tend to engage in fraudulent activities.

Apart from attractiveness, such crimes are appealing to those who are exposed to a lot of money. In the future, white-collar crimes are likely to increase because the current generation is eager to get rich.

Researchers revealed that one of the biggest challenges of the current generation is the desire to get richer as quickly as possible.

White-collar crimes are not easily detectable. In the realization that the managers engaged in fraudulent activity, the authorities need to collect enough evidence.

Additionally, such crimes can be identified many years later. If managers of a particular company misappropriate funds for their benefit, the employees might not realize unless the company’s performance changes.

It may take time to understand the reason why the company is not performing as it used to. White-collar crimes are not easily detected. Therefore, many people are taking advantage of this fact hence increasing the rate of criminal activities in many countries.

Almost all white-collar crimes are sophisticated. Before such crimes are committed, they are well-thought-of (Payne, 2016). In other words, they are crimes of passion. Those who engage in such activities make use of their time to plan for the crime.

White-collar crimes are intended from top to bottom. The plans are also attributed to the fact that the suspects are not easily identified as far as cybercrime is concerned. Planning is the key to the success of many activities. The nature of white-collar crimes entails extensive planning.

Also, embezzlement enriches those who engage in it. Managers of various companies that have collapsed tend to continue with life as usual. Such cases indicate that those managers might have used the company’s funds to finance their investments (Lee, 2017). Due to the sophisticated nature, white-collar crimes are here to stay.

Effective measures should be put in place to fight the increasing rate of white-collar crimes. Governments can consider amending the laws to incorporate new aspects of criminal activities. The law also encourages white collar crimes because there are no set rules and regulations concerning such crimes.

Disadvantages of white-collar crimes

Research indicates that several companies have been closed down due to the misappropriation of funds. White-collar crimes affect both the economy and individual households. In terms of economic performance, some of the companies that would have boosted the economic performance were closed as a result of bankruptcy.

The main course of bankruptcy in those organizations was fraudulent activities and embezzlement of funds. WorldCom Company is one of the biggest accounting scandals in American history.

According to a report by CBS News, the WorldCom scandal began when the internal audit identified an improper accounting for more than 3.8 billion expense. The company could not account for such an amount of money. Ideally, this was an indication that some of the senior officials were responsible.

Another example is the Enron Company (Eckaus and Sheaffer, 2018). In Enron, improper accounting for the financial aspect of the company led to its closure. The management tried to hide losses, yet the company had already collapsed.

The two cases led to an increase in unemployment. WorldCom’s case led to the retrenchment of 17,000 employees. Employment is one of the drivers of economic growth. Human capital is an essential factor as far as commercial success is concerned.

Lack of employment opportunities due to white-collar crimes led to an increase in other criminal activities hence derailing the rate of economic growth.

The majority of the employees who lost their job in Enron and WorldCom were not responsible for fraudulent activities (O’s hea, 2017). In Enron, the Chief Financial Officer was held accountable for the losses. Many employees suffered on or the things they had not done (Boddy, 2017).

Another disadvantage of white-collar crimes in the economy is the introduction of a corrupt culture. A lousy culture has an impact on economic performance. Some people are likely to imitate the actions of their bosses. If the managers of an organization are fond of misusing an organization’s funds for their benefits, it is likely to become a trend in that particular organization.

If other employees are promoted to higher positions, they are likely to imitate the actions of their predecessors. In the long run, the company suffers from poor management. Ineffective management is attributed to slow economic growth.

In some economies, white-collar crime has increased the gap between the rich and the poor. Those who have access to financial resources are rich. In this regard, some of the rich people use their positions to exploit the poor.

According to the New York Times, fraudulent activities are evident in various sectors of the economy (Bhaskar and Flower, 2019). The case of HealthSouth found that $2.5 billion fraudulent activities were carried out in the chain of hospitals and clinics. In this case, the founder was convicted, and more than five former Chief Financial Officers pleaded guilty to charges.

Notably, healthcare entities are considered to be of more excellent value in society. The main reasons why healthcare facilities are constructed are not only to generate profit but also to provide excellent services to the people.

The case of the HealthSouth revealed that fraudulent activities could be carried out regardless of the industry in which the entity operates. Therefore, white-collar crimes have a negative impact on economic development.

White-collar crimes are self-centered. They intend to benefit individuals. Society does not help as a result of the embezzlement of funds. One of the recent cases is the Wells Fargo. In this case, a report revealed that some of the top officials in the company had created millions of unauthorized credit card accounts.

The scheme resulted in the opening of 1.5 million fraudulent accounts. The main aim of introducing such a scheme was to benefit a few individuals. However, many people lost their money.

Fraudulent activities lead to the blackmail of the company’s name. Companies whose employees have been known to have been involved in white-collar crimes may lose some of their customers. Ideally, some customers may not want to engage with a fraudulent company. Therefore, they are likely to avoid transacting with the company.

Loyal customers are also expected to shy away from engaging with the company. In the long run, the decrease in the number of customers can have a direct effect on the overall performance.  Such companies are also likely to suffer from rejection from the general public (Elvira and Talib, 2017). For instance, customers who realized that their accounts were unauthorized would not do business with Wells Fargo.

Like any other form of crime, those who are found guilty are always taken to court. Some of them have been charged a high amount of money. The case of Bernard Madoff, who was convicted of a fraudulent activity worth $65 billion, shows that any criminal can be convicted (Lewis, 2017). Therefore, those who engage in fraudulent activities should be aware of the consequences.