ORGANIZED CRIME

Organized crime is a category of transnational, national, or local

groupings of highly

centralized enterprises run by criminals who intend to engage in illegal

activity, most

commonly for money and profit. Some criminal organizations, such as

terrorist groups, are

politically motivated. Sometimes criminal organizations force people

to do business with

them, such as when a gang extorts money from shopkeepers for so-
called "protection". Gangs

may become disciplined enough to be considered organized. A

criminal organization or gang

can also be referred to as a mafia, mob, or crime syndicate; the

network, subculture and

community of criminals may be referred to as the underworld.

Other organizations—including states, militaries, police forces, and

corporations—may

sometimes use organized-crime methods to conduct their activities,

but their powers derive

from their status as formal social institutions. There is a tendency to

distinguish organized
crime from other forms of crime, such as white-collar crime, financial
crimes, political

crimes, war crime, state crimes, and treason. This distinction is not
always apparent and

academics continue to debate the matter. For example, in failed states

that can no longer

perform basic functions such as education, security, or governance

(usually due to fractious

violence or to extreme poverty), organised crime, governance and war

sometimes

complement each other. The term "Parliamentary Mafiocracy" has

been used[by whom?] to

describe democratic countries whose political, social and economic

institutions come under

the control of a few families and business oligarchs.

In the United States, the Organized Crime Control Act (1970) defines
organized crime as the

unlawful activities of a highly organized, disciplined association.

Criminal activity as a

structured process is referred to as racketeering. In the UK, police

estimate that organized

crime involves up to 38,000 people operating in 6,000 various groups.

Due to the escalating

violence of Mexico's drug war, a report issued by the United States

Department of Justice
characterizes the Mexican drug cartels as the "greatest organized
crime threat to the United

States"

DISTINGUISH UNORGANIZED &ORGRANZIED CRIME

Ongoing conspiratorial enterprise engaged in illicit activities as a

means of generating income

(as black money). Structured like a business into a pyramid shaped

hierarchy, it freely

employs violence and bribery to maintain its operations, threats of

grievous retribution

(including murder) to maintain internal and external control, and

thuggery and contribution to

election campaigns to buy political patronage for immunity from

exposure and prosecution.

Its activities include credit card fraud, gun running, illegal gambling,
insurance fraud,

kidnapping for ransom, narcotics trade, pornography, prostitution,

racketeering, smuggling,

vehicle theft, etc.

With the arrival of international terrorism (with which it often has

symbiotic relationship) and
internet, organized crime now covers practically every nation and
segment of society, and

uses extremely sophisticated methods and credible front-

organizations (such as charities and

high-tech firms) in movement of large amounts of money and

weaponry. Called by names

such as cartel, mafia, syndicate, and triad, these establishments do not

tolerate competition

and constantly fight for monopolization in their specialty (such as drug

trade) or geographical

region. They are distinguished from the common (unorganized) crimes

by characteristics

such as

(1) non-random nature of criminal behavior,

(2) coordinated activities of hundreds or thousands of operatives,

(3) diversification of activity (production, supply, retail),

(4) regional, national, or transnational scale of operations,

(5) large volume of turnover (running into billions of dollars in some

cases),

(6) pursuit of both profit and power, and

(7) usually an identifiable leadership. A 1975 UN definition of

organized crime reads, "...

large scale and complex criminal activity carried on by groups of

persons, however loosely or
tightly organized, for the enrichment of those participating and at the
expense of the

community and its members.

It is frequently accomplished through ruthless disregard of any law,

including offences

against the person, and frequently in connection with political

corruption." Paul Nesbitt (head

of Interpol's Organized Crime Group) defined it in 1993 as, "Any group

having a corporate

structure whose primary objective is to obtain money through illegal

activities, often

surviving on fear and corruption."

WHITE-COLLAR CRIME

WHAT IS A 'WHITE-COLLAR CRIME'? White-collar crime refers to

financially motivated nonviolent crime committed by business and

government

professionals. Within criminology, it was first defined by sociologist

Edwin Sutherland in

1939 as "a crime committed by a person of respectability and high

social status in the course

of his occupation". White-collar crime is a nonviolent crime committed

for financial gain.
Securities fraud, embezzlement, corporate fraud and money
laundering are examples of

white-collar crime.

BREAKING DOWN 'WHITE-COLLAR CRIME' White-collar crime gets its

name from the types of individuals who typically commit financial

fraud, including business

managers, fund managers and executives. Individuals can face prison

time and steep fines if

they are convicted of white-collar crimes. The federal government can

also pursue financial

damages from corporations and banks that commit white-collar crime

on an institution-wide

level.

EXAMPLE OF WHITE-COLLAR CRIME COMMITTED BY AN

INDIVIDUAL:

One of the most well-known white-collar criminals is Bernard Madoff,

who was convicted in

2009 of a massive fraud that cost investors $65 billion. Madoff,

sentenced to 150 years in

prison, ran an elaborate Ponzi scheme, which promised large returns

on investments. For

many years, Madoff used money from new investors to pay previous
investors without
actually investing the funds. Madoff‘s scheme fell apart when a
significant number of

investors demanded their money back, and Madoff was unable to pay
them.

EXAMPLES OF CORPORATE WHITE-COLLAR CRIME:

Corporate white-collar crime usually involves a large-scale fraud

perpetrated throughout the

institution. For instance, Credit Suisse pleaded guilty in 2014 to

helping U.S. citizens avoid

paying taxes by hiding income from the Internal Revenue Service. The
bank agreed to pay

penalties of $2.6 billion. Also in 2014, Bank of America acknowledged

it sold billions in

mortgage-backed securities (MBS) tied to properties with inflated

values. These loans, which

did not have proper collateral, were among the types of financial
misdeeds that led to the

financial crash of 2008. Bank of America agreed to pay $16.65 billion in

damages and admit

to its wrongdoing.

Types of White-Collar Crime

White-collar crime refers to different methods of financial crimes that usually include
non-violent ones. These are the most common examples of it.
Bribery
It is common for white-collar employees to use bribes or facilitate payments to achieve
business goals, resulting in reputational loss and severe penalties for companies. As of
2018, corruption costs the global economy $ 3.6 trillion each year, according to the
world economic forum. At the end of the 20th century, bribery scandals gradually
increased, leading some states to regulate these crimes by cross-border laws.
Regulatory pressure in companies to prevent bribery has increased considerably within
the framework of the regulations made.

Money Laundering
Money laundering, money obtained from illegal activity is considered dirty, and the
process is laundered to make money look clean. Money laundering is a necessary
service, especially for those dealing with large cash. In money laundering cases, the
investigation usually covers the laundering itself, and the criminal activity from which the
money laundered was obtained. Criminals dealing with money laundering earn their
income in many ways, such as healthcare fraud, human and drug trafficking, terrorism,
and public corruption. Criminals use several money laundering methods. The most
common is precious metals, real estate, international trade, and virtual currency such as
Bitcoin. 

Fraud
Fraud is a broad criminal term used to deceive people to get their money. The most
common method among fraud schemes is asking people to send money in small
amounts and making them believe that they will receive more money in return. But of
course, the sender of the money cannot receive his money many times, even the
money he sends. This is a minimal example, but fraud is a serious crime, and people
can lose all their assets because of it.

Ponzi schemes, securities fraud, and identity theft are other common methods of fraud.
After recent developments in technology, there has been a rise in cybercrime.
Companies endeavor to fight them and protect their businesses.

Insider Trading
Insider trading represents trading for the benefit of the trader having material, non-public
information that gives him an advantage in the financial markets. For example, a person
working for a company may know that Company A is preparing to acquire Company B.
The employee can purchase shares in Company B with the expectation that the
company's shares will rise significantly when the acquisition becomes public. So here,
he can completely turn the situation in his favor.
Embezzlement
Embezzlement is a theft or theft crime, ranging from an employee taking a few dollars
from a cash drawer to a complex scheme to transfer millions from a company's
accounts to the embezzler's accounts. Here, a white-collar person can slowly smuggle
money from the company's income to his own embezzlement, and he can turn all kinds
of financial games to prevent this from being understood.

Espionage
Espionage is typically a white-collar crime. For example, an A company wants to buy
shares from company B and to facilitate this process, or A can make a deal with an
employee of company A to understand the weaknesses of the company and cheat the
price accordingly, and in return for this agreement he can make a payment to the
employee.

Relationship with Other Types of Crime

Corporate Crime
Corporate crime includes crimes related to a company. The crime committed benefits
the company, the investor, or the people holding top positions in the institution. White-
collar crime and corporate crime are quite similar because both are included within the
business network. The key difference is that white-collar crime benefits the individuals
involved, whereas corporate crime benefits the company or senior individuals in
general.

Organized transnational crime

Organized transnational crime is organized crime activity that takes place in national
jurisdictions. With advances in technology, law enforcement and policymakers have had
to respond to such crimes globally. Some examples include human trafficking, illegal
arms trade, money laundering, drug trafficking, terrorism, and cybercrime.

Crimes of national interest

Crimes related to national interests mainly consist of treason. "Offenses Related to
Promoting Foreign Attack," it is a crime to communicate with strangers to cause foreign
aggression or threat secretly. Crimes Related to Foreign Assault is the treason of
cooperating positively with external aggression, at home and abroad, regardless of
nationality. "Uprising Crimes" is internal betrayal.
Blue-Collar Crime
The types of crime are a function of those available to the potential offender. Therefore,
workers in relatively unskilled environments have fewer exploitation opportunities than
workers in situations where large financial transactions occur. Blue-collar crime tends to
be more pronounced and attracts more active attention from the police, such as
vandalism or theft. In contrast, white-collar workers can combine legitimate and criminal
behavior, making themselves less pronounced when committing crimes.

Thus, blue-collar crimes use more physical force. Simultaneously, in the corporate
world, identifying a victim is less clear, and reporting is complicated by the culture of
business secrecy to protect shareholder value. It is estimated that most white-collar
crimes are not detected or, if detected, not reported.

The Difference Between Blue-Collar Crime and White-

Collar Crime
Blue-collar crime can refer to more violent acts such as murder, armed robbery, sexual
assault, illegal gambling, prostitution, human trafficking, terrorist financing, drug
trafficking. Blue-collar crimes are often easier to detect because they have a clear
victim, and all actions taken are undoubtedly illegal. The thing is that the term blue-
collar crime is not a legal term, but it is often used to compare illegal acts with white-
collar crime.

White-collar crime is a little more complicated and deceiving. As the FBI describes,
white-collar crimes are a series of criminal acts committed by government and business
professionals. White-collar criminals are also generally not resorted to violence or guns;
instead, criminals commit crimes using internet browsers, reputation, and accounting
software. Often, white-collar crimes go undetected because it is not clear to the
audience that a crime was committed.

White-collar crimes make many people a victim at the same time and cause significant
financial damage. White-collar crimes can cause great harm to both individuals and
organizations. Therefore, it is essential to investigate them deeply to ensure that no
more are victimized. The damage and danger of blue-collar crimes and the damage and
danger of white-collar crimes are so great. The fact that white-collar crimes do not
include violence does not make him innocent; it can easily be understood how
dangerous it is when considering the economic damage and suffering it causes.

Penalties and Regulations

According to the FBI, white-collar crime is known to cause damage to the United States,
amounting to $ 300 billion a year. Although the government typically blames individuals
for white-collar crimes, the government has the power to punish companies for these
crimes. Penalties for white-collar offenses include fines, community arrest, home
detention, paying the cost, restitution, controlled release, and imprisonment. The
Federal Penalty Directives recommend longer prison terms when at least one victim
suffers serious material damage. However, he takes the accused's responsibility for the
crime and assists the authorities in their investigation.

Both state and federal laws list activities that constitute white-collar criminal offenses.
The US Constitution of the Trade Clause gives the federal government the power to
regulate white-collar crimes. Federal agencies such as the FBI, the Securities and
Exchange Commission (SEC), the Internal Revenue Service (IRS) enforce white-collar
criminal law. Besides, most states use their own agencies to enforce state-level white-
collar crime laws.

Risk Management of White-Collar Crime

White-collar crimes are generally detected through internal monitoring, audits, or
reporting systems. Informants in corporate and international companies report internal
irregularities via e-mail and telephone and initiate an internal investigation process. But
of course, there are some problems. For example, in some companies, high-status
professions are often self-regulated, and covering up and protecting criminals instead of
punishing criminals may be a company's primary concern.

At this point, penalties imposed on disciplinary board members may include reprimand,
suspension, temporary or permanent termination of licenses and memberships.
Traditional criminal and administrative laws also prescribe special procedures and
criminal provisions for such crimes. However, to avoid scandals and complaints in the
media, many companies demand their employees' resignation responsible for
irregularities. They may even offer annoying employees the chance to leave by
agreement to avoid any scandal. But it is a fact that white-collar crime is just as serious
as other crimes, damaging the sense of justice in an institution, affecting other company
employees and society.

Unavoidable even in international companies with strict global compliance policies,

white-collar crime is often used as a shortcut by employees who want to quickly move
up their careers. Although white-collar crime benefits the person who committed the
crime, it can cause irreparable damage to companies. Companies have to develop
defense mechanisms against employees who abuse and cause material and moral
damage to protect themselves.

For this reason, companies should take precautions from the very beginning to prevent
white-collar crimes that are difficult to detect. One of these measures is applying
personal due diligence practices to select the right candidates for the company and
make ethical questions an indispensable element before recruitment takes place.
Compliance experts in companies should be aware that it is of utmost importance to
create a corporate culture and protect it from toxic employees. Accordingly, they should
carry out the necessary risk assessments, carry out risk management , increase the
measures and take the necessary action steps in advance.

An ethical culture can be developed within the framework of an effective compliance

program and continuous improvement methods. Comprehensive risk analysis, effective
audits, determination of key persons, effective implementation of internal complaints
and disciplinary processes are essential elements in companies. As a result, it is
important to implement control systems specially prepared for risk management,
detecting and preventing crime opportunities, and protecting a company and its
stakeholders from white-collar crime losses.

corporate crime, also called organizational crime, type of white-collar

crime committed by individuals within their legitimate occupations, for the benefit of
their employing organization. Such individuals generally do not think of themselves as
criminals, nor do they consider their activities criminal. Related to corporate crime is
professional white-collar crime, which is crime committed by those who identify with
crime and make crime their sole livelihood.
The concept of corporate crime
The origins of the concept of corporate crime can be traced to the larger concept of
white-collar crime, which was first introduced in the social sciences by American
criminologist Edwin Sutherland in a 1939 presidential address to the American
Sociological Association. He defined white-collar crime as “a crime committed by a
person of respectability and high social status in the course of his occupation.” Focusing
on the powerful as well as the downcast, such a concept represented a radical
reorientation in theoretical views of the nature of criminality. Sutherland later published
a book titled White Collar Crime (1949), which concentrated almost exclusively on
corporate crime. Using official records of regulatory agencies, courts, and commissions,
he found that all 70 of the corporations that he examined over a 40-year period had
violated at least one law or had an adverse decision issued against it for false
advertising, patent abuse, wartime trade violations, price-fixing, fraud, or intended
manufacturing and sale of faulty goods. Many were recidivists (repeaters) with an
average of eight negative decisions issued for each. Sutherland noted that while “crime
in the streets” captured the newspaper headlines, “crime in the suites” continued
unnoticed. While white-collar crime was far more costly than street crime, most cases
were not even covered under criminal law but were treated as civil or administrative
violations.
Corporations and criminality
Most criminologists divide white-collar crime into two major types: corporate crime and
occupational crime (crime committed during the course of a legitimate occupation, for
one’s own benefit). Most corporate criminals do not view their activities as criminal,
since their violations are usually part of their occupational environment. Corporate
offenders remain committed to conventional society and do not identify with
criminality. Their inappropriate behaviour is often informally approved by occupational
or corporate subcultures.

Despite Sutherland’s pioneering study, little attention was focused on the white-collar
variety until the first large-scale, comprehensive investigation of corporate crime, by
American criminologists Marshall Clinard and Peter Yeager, titled Illegal Corporate
Behavior, 1975–1976 (1979). The study involved a systematic investigation of
administrative, civil, and criminal actions either filed or completed by 25 federal
agencies against 477 of the largest wholesale, retail, and service organizations in
the United States. Many of the same patterns that had been discovered by Sutherland
some three decades earlier were found to persist. About 60 percent of the large
corporations had at least one legal action initiated against them, while the
most deviant firms—8 percent of the corporations—committed the majority of offenses
(52 percent of all offenses). The oil, pharmaceutical, and automobile industries were
responsible for almost half of all violations. The leniency with which corporate violators
were treated persisted.

The challenge of combatting corporate crime

While corporations may complain about the burden of federal bureaucracies and their
enforcement of regulations, guilty companies generally have more expertise, staff, and
time to devote to their defense than the government has for prosecution. Regulatory
agencies have been criticized as being ineffective in enforcing laws against powerful
corporations. Often the penalties for law violation are too small to act as deterrents.
Offenders are seldom convicted and rarely get jail time. Many are permitted to
plead nolo contendere (no contest) to charges, which enables them to escape the stigma
of being labeled “guilty” or “criminal.” The appointed directors of agencies are often
drawn from the very corporations to be regulated; these same companies may then hire
retiring agency employees. In addition, the amount of money governments assign to
corporate crime generally is much smaller than that allocated for street crim
What is Corporate Crime?
Corporate crime, sometimes referred to as white collar crime, was defined by in 1939 by
criminologist Edwin Sutherland as a crime “committed by a person of respectability and high
social status in the course of his occupation.” Common examples of such crimes include:

 Falsifying information on financial statements

 Manipulating the stock market
 Bribery
 Bribery of public officials
 False claims in advertising
 Embezzlement
 Damage caused to the environment due to negligence

How do they get away with it?

Corporate crime is particularly difficult to spot and stop for many reasons. Unlike street
crime, corporate crime is a very private action, occurring in a home or office where there
aren’t usually witnesses. Many of the crimes involve a high level comprehension of
finances, the stock market, trading, and other specialized subjects, which most FBI and law
professionals don’t fully understand. Even if a white collar criminal is caught, it can be
difficult to prove whether or not they committed the accused crime knowingly, menacingly,
or recklessly, or if it was simply a side effect of the person’s position. Plus, it is simply
difficult to apply criminal law principles to corporate crimes, and big corporations which do
get called into court often have the funds to defend themselves in a way most people
cannot.