White Collar Crime

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- Types of White Collar Crime

`They are five major forms of white collar crime. They will be listed below, with examples and definitions of each type. The five major forms are antitrust violations, securities violations, consumer fraud, health care fraud, and environmental fraud.

- Antitrust violations are differentiated by two separate groups, restrictive trade agreements, and monopolies. “Restrictive trade agreements involve an illegal agreement or understanding between competitors in an industry to restrict how the industry works” (Salinger 2013) Examples of this would be price fixing and market sharing or division. Price fixing is when competitors make a decision on prices for a certain product of service. Market sharing is when competitors agree on the division of an area. Meaning, if a town is divided into sections A,B,C, they would have one competitor sell solely on sector, A, the other sells solely in B, and lastly another sells only in sector C. These two examples are illegal. They restrain trade in an area, and the prices of the products or services are not being set by open competition which would not make it a free market economy.

Monopolies is a company that has no competition in an area, and can create and control prices however they desire. Although a company can have monopolistic even though it may have a competitor because they can drive out competition if their share of a market is large enough. A technique they may use is making prices so low that it drives the completion out because they are unable to compete with the low prices are they are driven out of business.

- Securities are any evidence of ownerships, credit, or debt. It is any type of paper or numbers that shows economic input into anything. Such as stocks or bonds. Security fraud would be “any misrepresentation involving lying about the value or condition of a security” (Salinger 2013) Stock manipulation happens when a group manipulates the price of a security. Many times brokers will take money from their clients and reinvest it for their own personal use rather than investing it for the benefit of their client.

- Consumer fraud is when a company or individual deliberate deceives a customer on the price, quality, or effectiveness of a service or good. Two common forms of consumer fraud are free prize scams, and real estate frauds. Free prize scams are people are told they have won something of significance for free, but in order to receive their price they must send in money. In some cases, after sending in money, the customer may not receive a prize. Real estate fraud is when an agent deceives a home owner on the value or condition of a home. A homeowner may believe they are getting a great deal on a house, when in reality the house has multiple issues, and is not up to any regulations.

- Health care fraud is fraud made towards health insurance providers. Three common forms are unnecessary procedures, fee splitting, and fraudulent billing. Unnecessary procedure are exactly what they sound like, providing services to a patient that are unnecessary to collect more money from the insurance provider. Fee splitting is if a doctor cannot perform the necessary treatment they will refer a patient to a specialist. In some cases a specialist will agree to split the money from the insurance with the doctor for their referral. Lastly fraudulent billing is billing a patient’s insurance company for services that were never provided to a patient.

- Lastly, environmental crime. Although there is not overall definition this is essentially any violation of any environmental law. Such as dumping waste on public property. This can affect the quality of the soil, or the quality of the air. The biggest environmental crime is the illegal disposal of any hazardous waste.

White collar crime to most is just really seen as the illegal movement of money. There are multiple forms of white collar crime that many people do not know about or would even think they could be considered as white collar. White collar crimes are hard to control, are hard to capture. Criminals have been able to go under the radar for many years, and have large change of getting away with their act. Chances and opportunities to commit these types of crimes are easily accessible, and even harder to prosecute.

References

Clinard, M. B., & Yeager, P. C. (1983). Coporate Crime. NY: The Free Press.

Mathers, C. (2004). Crime School: Money Laundering. Buffalo, NY: Firefly Books.

Payne, B. K. (2002). Incarcerating White-Collar Offender. Springfield, OH: Charles C. Thomas.

Salinger, L. M. (2013). Encyclopedia of White Collar Crime and Coporate Crime (Vol. 2). Thousand Oaks, CA: Sage Publications.

White Collar Crime. (n.d.). Retrieved April, 2016, from http://www.hg.org/white-collar-crime.html