CRJ 447 Study Guide Unit 1 PDF

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Summary

This is a study guide for unit one consisting of four chapters regarding business and political crime. This ranges from white collar crime definitions to environmental crime committed by big businesses to the history of business fraud with many examples....

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CRJ 447 Business and Political Crime: Unit 1 Introduction to Fraud -

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Wording of laws matter when determining what crime to charge someone with o Fraud isn’t well defined or clear People are less scared of fraud than violent crime o They do not see the damage (don’t care as long as it’s not them)  Therefore, people commit fraud all the time and get away with it o Ex: Enron (Texas Oil Company)  Chief officers moved pension money to offshore bank accounts  When engineers retired, they had no pension left (1000s of people) o Some killed themselves (fraud should be taken seriously) Companies will pass the cost of fraud onto their consumers o Ex: car recalls  The car will become more expensive to pay for the repairs Fraud usually happens when money is handed over willingly Fraud is a great way for big companies to get laws passed in their favor by paying representatives (donating to their campaign) o Congress can become inactive, meaning ignore whenever these companies commit fraud Monopoly: a single company controls the whole industry o Ex: Standard Oil Company (John D. Rockefeller)  Raise prices of oil as high as they want because customers need it to survive and there are no other companies to buy from for cheaper (determines the price) Sherman Anti-Trust Act of 1890: broke up monopolies; must have two or more companies to choose from o Claimed the companies were dishonest by raising the prices when they were already making plenty of money o Wanted “fair competition” Collusion: owners of businesses in the same industry communicate to raise prices at the same time-> removes competition

White Collar vs. Blue Collar -

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Professor Edwin Sutherland: work specialist sociologist o When deviance is involved-> different types of jobs are related to the type of crime workers will commit White-Collar Crime: people high up in companies that have access to the money o How much access you have to rip off your own company o Committing crime on behalf of the company  Ex: dumping chemicals in the river because you have the power to do it at your company  Access -> Temptation o Types of Crimes: nonviolent and fraudulent  Embezzlement

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 Insider trading Blue-Collar Crime: factory workers o Types of Crimes: violent  Bar fights  Burglary  Public Intoxication

Ponzi Schemes (Pyramid Schemes) -

Charles Ponzi o Ask for money from investors and pay off early investors with new investors’ money to show “good faith” and they tell others to invest and their money is never invested and instead is spent by Charles Ponzi  Only have an issue when an investor asks for their investment back and you don’t have the money to give to them  Need to bring in money somehow o Ex: Amway (vitamins)  House parties to get more women to sell them o Chain Mail: letters in the mail saying to send $1 and to send it to 10 friends to continue the chain and then send 10% back to the sender (ILLEGAL)

The Great Depression -

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Prices of goods skyrocketed-> inflation (money was worth nothing) Stock Market took off with WWII o Women started working outside the home  Revitalized American industry o 1960s: Women’s Liberation/Feminism United States was forced to modernize to keep up with other countries (Jeeps, tanks, etc.) Baby Boomers: take a lot out of retirement fund/social security Prohibition: ban on alcohol o Mafia was born  Sheriffs were bought off by bottles of moonshine  Would assist in transporting alcohol across county lines (corrupt) o JFK’s father because a multi-millionaire from smuggling whiskey in from Canada  Paid president to be US Ambassador to the Queen’s Court  Sent children to Ivy League schools o Bought JFKs presidency

Tax Fraud -

Say you made less money so you pay less taxes o Common with contractors who only take cash

Embezzlement -

Start taking money because they are trusted and they screw over the company they work for

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Usually starts off small then piles up  Ex: old woman stealing $800,000 from losing in Las Vegas

Industry-Specific Studies -

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Medical Industry o Medicaid/Medicare: 40% fraud  Doctors saying that they saw a patient that they didn’t and ask Medicaid for refund for service o COVID Relief Fund: 30% fraud Military o US uses private factories to make jets and weapons  4-5 companies make bids to figure out which one to go with  Cost-Overrun: product costs more than agreed upon  Once the generals who chose the company to go with retire, they become billionaires by being invited to be on the Board of Directors for that company

Credit Card Fraud -

When there isn’t enough money in your bank account and you pay with a credit card, the bank pays the store, then the bank makes the money back by raising interest rates for everyone

Crimes Against Consumers -

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900-number services: charge $2-$5 per minute Sign up for emails and get put into a lottery (they sell your email and are never put into a lottery) Furniture stores “Going Out of Business” sales to make a huge profit margin (never go out of business) Mail Order o TV/Computer o “Call now” and by the time they say the price they already have your name and card number  Wording is very important so you aren’t really lying (fine print) Price Gouging: price increases during natural disaster (desperation) o ILLEGAL  Insulin  Epi-pens  Plywood prices (during hurricanes) Auto-Repair Rip-offs o Looks for individual’s inability to understand mechanical terms and typically women  Will say many things are wrong with the vehicle when nothing is wrong to charge for services that were never done  Give a reconditioned part but charge for new part Rigged Meters: taxi drivers o For every ½ mile the meter will charge for a mile Telemarketing Fraud

Ad on TV/telephone  Something that is not real or not what it says it is Fraudulent Loan Companies o Tell people they were pre-approved for a loan for a small fee  People in desperation Education for Sale o Buy a degree by sending credentials and check to a PO Box o ABD: All but dissertation  Hired as assistant professors then finish dissertation within two years  Write bad dissertation and send to PO Box and receive PhD from an “odd-named university” o Rich people can make donations to prestigious universities to get their children admitted  Ex: Lori Laughlin pretended her daughter was on the rowing team and paid for her to get into USC o Harvard Lawsuit: discrimination against Asian American students because they would make up a large majority o Family members could get scholarships because of their relationship  Legacy Education False Advertising o Give offers that are too good to be true  Ex: machine is said to have given this guy huge muscles (impossible because the machine hasn’t even come out yet)  Health Environment: huge business; making people look and feel better Bait-and-Switch: say there is a really good deal, say they’re sold out, but have this other similar product for a lot higher price Preying on Children o Joe Camel cigarettes o Happy Meals at McDonalds o Cereal Boxes: most sugary has the cartoon characters  Brand Loyalty: companies want consumers to continue buying your brand; start them young Price-Fixing: collusion Monopolies o Standard Oil o Marbel/AT&T  Controlled long-distance phone calls o Computers  Microsoft o Google  Censorship  Twitter/Facebook/Instagram  Game of Function o Walmart: Big Box Store o Airlines o

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Knock-off Rip-offs -

Use an expensive name that was made cheaper o Ex: handbags, sports memorabilia, and leather jackets  Bigger problem: medicine  Expensive drugs are most susceptible

Unsafe Products -

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Some products, if used as intended, will kill you o Cigarettes Some products, if they had a fault, is harmful o Cars/car seats  Ex: Ford Pinto cars Adulterated Foods o Unsanitary practices concerning food  Fresh produce especially  Salmonella, E-coli o Need constant inspection regiment from the USDA  Ex: Mexico using untreated sewage as fertilizer for strawberries  Ex: rusting of cans in on the food Dangerous Drugs and Devices o Food and Drug Administration (FDA)  Drugs can be extremely addictive and there is a lot of money in these businesses  Ex: fen-phen (weight loss drug) o People died from heart failure; heart valve damage o Breast Implants  Company: DOW Corning o Dalkon Shield (IUD) Quackery: medical products that are worthless yet promise miraculous cures (no benefit) o Cancer and HIV/AIDS are most susceptible  Ex: clinic on Mexican border that will cure HIV/AIDS  Ex: snake oil that will cure everything  Longevity medicines for older people to live longer

Environmental Crime -

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Businesses releasing chemicals into the environment illegally instead of paying to have them disposed of safely o Soil, water, and air pollution Plastic bottles: chemicals used to make plastic also pollute the environment Superfund: used by the government to help clean up pollution o Ex: battery acid leaking into the groundwater Electronic Waste/Pollution o Computers/phones/etc. are made to be thrown away after a few years Environmental Racism

Building government housing on top of landfill Ex: Flint, MI Water Crisis  Use frogs to determine soil and water pollution because they will have deformities Toxic Terrorism o Hazardous waste and radiation  Dropping bins of radiation into forests of Africa (US military) o o

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