Occupational and Corporate Crime
Although the sociologist Edwin Sutherland (J 949) developed the theory of white-collar crime sixty years ago. it was not until the I 980s that the public became fully aware of its nature. Occupational (wlJite-collar) crimI! comprises illegal activities committed by people in the course of their employment or financial affairs. In addition to acting for their own financial benefit, some white-collar offenders become involved in criminal conspiracies designed to improve the market share or profitability of their companies. This is known as corporate crime-illeg~1 acts committed by corporate employees on behalf of the corporation and with its support. Examples include antitrust violations; tax evasion; misrepresentations in advertising; infringements; on patents. copyrights. and trademarks; price fixing; and financial fraud. These crimes are a result of deliberate decisions made by corporate personnel to enhance resources or profits at the expense of competitors, consumers, and the 'general public.
Al though people who commit occupational and corporate crimes can be arrested, fined, and sent to prison, many people: often have not regarded such behavior as "criminal" People who tend to condemn street crime are less sure of how their own (or their friends') Financial and corporate behavior should be judged. At most, punishment for such offenses has usually been a fine or a relatively brief prison sentence. Until recently. public concern and media attention focused primarily on the street crimes disproportionately committed by persons who were poor, powerless, and nonwhite. Today, however, part of our focus has shifted to crimes committed in corporate suites. such as fraud. tax evasion, and insider trading by executives at large and well-known corporal ions. Bernard Modotf, the former chairperson of NASDAQ. admitted to defrauding his clients of lip to $50 billion in a massive scheme that took place over a number of years. Madotf used his social connections to raise large sums of money for a fund that he used for his own gain. Clients invested in the fund in hopes that Madoff would manage their money wisely and that they would earn large returns on their investments. Instead, he lived lavishly and used new money that came in from investors to payoff existing clients who wanted to cash out of his fund rather than using the new money for the purpose intended. However, Madoff is not an isolated example of such criminal endeavors. Over the past decade, numerous occupational and corporate criminals, including Dennis Kozlowski, the former chief executive of Tyco International, who was convicted
of looting more than $600 million from his company, and former Enron executives Ken Lay and Jeff Skilling, who were convicted of corporate conspiracy and fraud in connection with the collapse of one-time energy giant Enron, have all engaged in activities that have cost
other people billions of dollars and, in some cases, their life savings.
Corporate crimes are often more costly in terms of money and lives lost than street crimes. Thousands of jobs and billions of dollars were lost as a result of corporate crime in the year 2005 alone. Deaths resulting from corporate crimes such as polluting the air and water, manufacturing defective products, and selling unsafe foods and drugs far exceed the number of deaths due to homicides each year. Other costs include the effect on the moral climate of society (Clinard and Yeager. 1980; Simon, 1996). Throughout the United States, the confidence of everyday people in the nation's economy has been shaken badly by the greedy and illegal behavior of corporate insiders.