The White Collar Crimes refers to the acts that are committed by the people in the course and being the part of the business, for the purpose to earn the financial gains. The significant characteristic of the white-collar crimes is that these involve sophisticated systems and a range of participants at various levels. These are nonviolent crimes; examples of such crimes are securities fraud, counterfeiting, extortion, forgery, insider trading, embezzlement, corporate fraud, money laundering, and more (Findlaw Australia, 2018). The name of the said category of crimes is derived from the types of the individuals involved including the business managers, fund managers, government executives, and more. Hence, it can be said that all corporate crimes are white-collar crimes, but not all white-collar crimes are the corporate crimes. The victims of these criminal activities are the employees, competitors, consumers, investors, stockholders, and overall public and society as a whole (Healy and Serafeim, 2017). The essay will explore the various facets of the white-collar crimes, giving an insight of why such crimes are rarely dealt in the criminal courts. In addition, the essay will shed light on the fact as to why the white-collar crimes are often referred to as the class based crimes.
It is significant to note that while the white-collar crimes are often the point of discussions and the fascination among the individuals and society, because of the nature of people and the larger sums involved; however the same also become boring after a while because of the complex procedures and the perpetrators and victims are often unclear. The following segment explores the various reasons as to why such crimes are not dealt in the courts as the other criminal crimes.
The first and the foremost reason from the point of legal issues is that white-collar crimes are always about the context. This means whether the perpetrators knew at the time of the commitment of the crimes that their actions were illegal. Thus, a prosecutor is required to read the minds of the accused and link the same with the facts obtained in the proceedings. The legal term for the existence of the guilty mind to be regarded as the central element of the most of the crimes is “mens rea.’ This means that a defendant must be conscious of the facts that make his acts fit the definition of the offense. It is difficult to draw the fine line between the intentions, because the executives of the companies generally rely on the expert advices for their decisions (Brickey and Taub, 2017). In addition, at times many crimes occur when the valid business practices fall beyond the purview of the law and legislations (Cohen,Van Slyke, Cullen and Benson, 2016). Thus, it is quite complex to establish the existence of the mens rea in the corporate activities, which is the central element of the criminal activities. For instance, in the case of worldwide known scandal of that Enron, the management of the entity had used the mark to market margin approach of valuation (Aven, 2015). The management of the entity even had the sanction for the same from the U.S. Securities and Exchange Commission in the year 1992. While the approach was an acceptable one in terms of the accounting policies, the same was misused by the directors to overstate the earnings of the entity by overvaluing the energy related outstanding at as at the end of the reporting period. Till date, the management of any entity are free to choose various assumption and estimates while designing of the different accounting policies, making the management choices subjective.
An organisation operates through a range of individuals, and leaders possessing various technical skills and responsibilities. Thus, the second major reason for the non-dealing of the white-collar crimes on the criminal courts is that when the activities in the organisation take place as per the standard norms and the set procedures, it is difficult to establish the real culprit of the crime. As a result, the prosecution becomes complex when the crimes cover whole of the organisation. In addition, the complex hierarchal structure also poses the difficulties to establish the real place and level of organisation where the crime has occurred (Simpson and Paternoster, 2017). While the top executives defend themselves by stating that they are not the party of the day to day operations of the entity, and thus are not the parties to crime; the individuals down the hierarchy chain have the reasons on the lines of lack of authority and responsibility as their defence. As a result, punishing the senior leaders of the corporation might lead in the destruction of the corporate identity itself, and can increase the miseries of the customers, employees, suppliers and such even more. As evident form the case of financial group ING Holdings, which involved a whopping $45 million, the accused had fraudulently transferred the amount using the computer logins of few of the earlier serving staff members. Being the accountant of the entity, she had an access to the necessary information and the procedures, which aided her in the conspiracy. In addition, despite the amount involved, she was sentenced only for 15 years where the non-parole period was only of 7 years (Whigham, 2014).
The third major reason that forms the base for the white-collar crimes not being regarded as the criminal acts, and not being treated likewise is the level of exercise of control by the leaders. This means, as in most of the cases the leaders of the entity are the involved, who in turn are granted by wide organisational powers. As a result, it takes years and years to discover the existence of crime, and until the time it is revealed, such leaders have already left the organisation. Moreover, the individuals take the shelter of the corporate identity of the organisation, resulting fines and revocation of the license of the enterprise in turn. As evidenced in the case of James Hardie Industries, the first evidence of the abnormalities among the workers and the asbestos related diseases were revealed in the year 1978, as stated by the journalist Catherine (Martin Tombs and Whyte, 2015). The legal actions against the management were started being taken in the year 2004. In response to the same, the entity introduced the compensation deal for the victims in the year 2007 (Moerman and van der Laan, 2015). The final decision as pronounced by the High Court of Australia came in the year 2012. As evident from the timeline of the case, it can be stated that the involvement of the leaders and directors of the entity makes the discoveries and the decisions delayed.
The relationship between the social class, crime and the manner in which the same is being dealt and concluded with; are one of the most discussed and debated topic in the field of criminology. Different social groups are classified as per the access to the social, political, cultural, economic, and the other lifestyle resources. The criminological significance of this classification is that how the same influences the justice process. White Collar crimes are class based crimes and the fact is evident from their vary name. The crimes are called so, because of the high wealth-earning individuals involved. There are wide complexities in the accounting and reporting activates of the organisations of the 21st century. Hence, to get par the regulations, and the standard practices, it is necessary to possess the required qualification and knowledge of the practices, unlike in the case of social crimes. Thus, access to better environmental resources and economic resources is often the base of the corporate crimes and frauds. This differentiates them from the street crimes.
In addition to the factors as described in the earlier segments of the essay, that are difficulty in establishing mens rea, management control and others, it can be said that the white-collar criminals have an access to the pricy legal representations, which makes them less vulnerable in the legal system (Sutherland, 2017). Moreover, the ones holding the executive positions in the major companies are also known to contribute considerably towards the running of the various public offices in various capacities, resulting the impact on their integrity and objectivity. The media is also somewhat responsible for the lack of the public information on the lives of the white-collar criminals (Benson and Gottschalk, 2015). This is because of the socially elite persons being involved in the channel, thereby keeping the public’s focus and attention on lower level, and the street crimes, that are comparatively more visible. Another major evidence that regards the white-collar crime as class-based crime is the complexities and the legal procedures often prevent the whistle-blowers from revealing the faults and the roles of the individuals in the same in the entity. This is because the fear of losing the jobs, promotions, and incentives prevails. Thus, various factors as described above state the white-collar crimes as the class based crimes, naturally favouring the upper and rich class of the society.
Thus, as per the discussions conducted in the previous parts it can be stated that there are number of white-collar crimes penetrating the society in various forms. The stated crimes involve a range of practices and individuals from top to bottom, the hierarchy chain of an entity. It can further be stated that the white-collar criminals have the additional safety of in terms of the anonymity, law enforcement, money and organisational powers; unlike in the case of street criminals. This makes it for the prosecution necessary to dig deeply into the records of the individuals and procedures of the entity to find the traces of the white-collar criminal activities. The essay gives a glimpse of the various reasons that form the base of white-collar crimes going unnoticed and not prosecuted criminally in the court. The essay takes examples of various cases from the real life to demonstrate the impact of such factors on the prosecution of the same in the courts. The latter part of the essay describes the pieces of evidences, which support the notion that white-collar crimes are the class-based crimes. Involvement of the money, socially elite persons, and the attitude of the media are some of the factors. Thus, it can be concluded that the nature of the crime and the resources involved decide whether the crimes would be dealt in the court or not.
References
Aven, B. L. (2015) The paradox of corrupt networks: An analysis of organizational crime at Enron. Organization Science, 26(4), pp. 980-996.
Benson, M. L. and Gottschalk, P. (2015) Gender and white-collar crime in Norway: An empirical study of media reports. International Journal of Law, Crime and Justice, 43(4), pp. 535-552.
Brickey, K. F. and Taub, J. (2017) Corporate and white collar crime: cases and materials. Wolters Kluwer Law & Business.
Cohen, M. A., Van Slyke, S., Cullen, F. and Benson, M. (2016) The Costs of White-Collar Crime. The Oxford Handbook of White-Collar Crime. UK: Oxford.
Findlaw Australia. (2018) Punishing white collar criminals: What are some of the sentencing considerations? [online] Available from: https://www.findlaw.com.au/articles/5860/punishing-white-collar-criminals-what-are-some-of-.aspx [Accessed on: 25/09/18].
Healy, P. M. and Serafeim, G. (2017) Who Pays for White-Collar Crime?. [online] Available from: https://www.hbs.edu/faculty/Publication%20Files/16-148_fdda8213-730c-4929-bf3b-bf077666c1a3.pdf [Accessed on: 25/09/18].
Moerman, L. and van der Laan, S. (2015) Exploring shadow accountability: The case of James Hardie and Asbestos. Social and Environmental Accountability Journal, 35(1), pp. 32-48.
Simpson, S. and Paternoster, R. (2017) A rational choice theory of corporate crime. In Routine activity and rational choice (pp. 37-58). Oxon: Routledge.
Sutherland, E. H. (2017) White-collar criminality. In White-collar Criminal. Oxon: Routledge, pp. 3-19.
Tombs, S. and Whyte, D. (2015) The corporate criminal: Why corporations must be abolished. Oxon: Routledge.
Whigham, N. (2014) ASIC white-collar crime data ‘tip of the iceberg’ in Australia. [online] Available from: https://www.news.com.au/finance/business/asic-whitecollar-crime-data-tip-of-the-iceberg-in-australia/news-story/8be0680fa30f1aba4b8d982db22e2a96 [Accessed on: 25/09/18].
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