White-Collar Crime

White-collar crime is a type of non-violent crime where money is usually the driving force. Criminals with white-collar backgrounds typically have powerful and/or prestigious jobs that pay far more than the norm.

Edwin Sutherland, a criminologist and sociologist, first used the term “white-collar crime” in the 1930s. He used the word to characterize the kinds of crimes that “persons of respectability”—those who are acknowledged as having a high social status—typically commit. Eventually, Sutherland established the Bloomington School of Criminology at Indiana State University.

Before Sutherland popularized the term “white-collar crime,” most people believed that only the wealthiest members of society were capable of committing these kinds of crimes. Such a deeply ingrained idea exists in society. that some of the biggest businesses in America successfully tried to have Sutherland’s book extensively redacted when it was first published on the subject.

White-Collar Crime
White-Collar Crime

Summary

One kind of non-violent crime with a financial motivation is called white-collar crime.

White-collar crimes can be committed at the corporate or individual level. The victims of even a single white-collar crime may lose tens of millions of dollars because of the advanced technology that is currently accessible.

In 1939, criminologist and sociologist Edwin Sutherland coined the term “white-collar crime.” Many people rejected the idea that members of the “upper class” were involved in criminal activities until he wrote his books on the issue.

Blue-Collar vs. White-Collar Crimes

The distinction between white-collar and blue-collar crime is based on the many forms of criminal activity that the perpetrator can partake in.

Because those who commit blue-collar crime typically have fewer resources, their crimes tend to be more straightforward, such as robberies and burglaries. On the other hand, white-collar criminals are more frequently in a position to carry out extensive and intricate fraud schemes, such as being bank loan officers.

Types of White-Collar Crime

The term “white-collar crime” refers to a broad category of offenses, such as the following:

White-Collar Crime
White-Collar Crime

1. Fraud

The word “fraud” is broad and covers a variety of techniques used to deceive people out of their money. One of the most popular and straightforward is offering to pay someone a large amount of money (let’s say $10,000) in exchange for them sending the con artist a smaller amount (let’s say $300); the con artist may claim the smaller amount is a processing or finder’s fee. Naturally, the con artist receives the money entrusted to him but never delivers the money he claimed to have sent.

2. Insider trading

Insider trading is the practice of trading with the intention of profiting from substantial, confidential knowledge that provides the trader with a competitive edge in the financial markets. An employee of an investment bank, for instance, might be aware that Company A is getting ready to buy Company B. The employee has the option to purchase Company B stock with the assumption that, once the acquisition is made public, the stock price will climb dramatically.

3. Ponzi scheme

A Ponzi scheme, named after its founder, Charles Ponzi, is an investment fraud that promises investors extraordinarily large profits. With the recently deposited funds of new investors, it provides similar returns to the original investors.

The swindle crashes like a house of cards, leaving many investors with enormous losses when the con artist can no longer draw in enough new customers to pay off the old ones.

4. Identity theft and other cybercrimes

Two of the most common computer crimes are identity theft and computer system “hacking.” According to estimates, identity theft costs about $2 billion in losses in the US alone in 2019. The state whose residents suffered from identity theft the most was California, with nearly 73,000 cases reported; Florida came in a distant second with 37,000 cases.

5. Embezzlement

Embezzlement, often known as larceny, is a theft offense that can involve anything from a staff member stealing a few bucks from a cash drawer to a sophisticated plot to move millions of dollars from the company’s accounts to the embezzler’s.

7. Money laundering

For criminals dealing in substantial sums of cash, money laundering is a necessary service. The money is manipulated by passing it through a number of accounts and eventually into legitimate businesses, where it is mixed up with the real profits of the business and loses its original identity as proceeds from criminal activity.

8. Espionage

Spying, or espionage, is usually classified as a white-collar crime. For instance, a foreign government agent wishing to gain technology from Apple Inc. would contact an Apple employee and offer to pay them $10,000 in exchange for a copy of the required technology.

Classifying White-Collar Crime

It is common practice to categorize white-collar crime into two basic categories:

1.Particular offenses

Financial crimes that are perpetrated by a single person or by a group of people are known as individual crimes. One instance of a lone white-collar crime is a Ponzi scheme, like the one Bernie Madoff ran. This category also includes any one of several fraud schemes, including identity theft, hacking, and counterfeiting.

White-Collar Crime
White-Collar Crime

2. Financial offenses

There are business levels at which white-collar crime happens. For instance, a brokerage company might permit insider trading by its trading desk staff.

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