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Politics of Criminal Justice White collar crime costs the United States more money than all street crime put together in any given year. There are more people each year that are willing to commit these crimes. Society does not feel that white-collar crimes are deviant; the people who commit these crimes do not think of themselves as criminals. This type of crime is one of the most vexing even though most people feel little threat of this crime in their communities. What many do not realize is that white-collar crimes, such as embezzlement, are affecting them much more in the long run and many times go unnoticed.
Because embezzlement relies on the trust of many individuals, it can lead to tragic economic detriment. White-collar crime is caused by greed and lax control mechanisms including accounting controls (separation of duties and creation of audit trails), physical and data access controls, and management controls (supervision, work climate, and reward systems). The Criminal Justice System is also unsatisfactory in the manner in which it punishes these criminals. We have decided to change this. Embezzlement: The misappropriation or misapplication of money or property entrusted to one s care, custody, or control. Problem: Embezzlers steal 4 to 6 billion dollars a year from their employers, masters, and principals, yet their thefts are rarely detected.
Goal: To reduce the number of white collar criminals, focusing on embezzlers, in each separate state. Firmly entrenched, the study of white-collar crime travels under a number of criminological identities. Some prefer the term upper world crime, while others favor crimes of the powerful, avocational crime, economic crime, or abuse of power. No matter what they are called, the behaviors being classified have a similar core; they all include rip-offs of saving and loan institution, anti-trust violations, health care frauds, misrepresentation of financial statements, and unnecessary surgery or bills for services not rendered by physicians.
In a nutshell, this is what law-abiding citizens call embezzlement. White-collar crimes can also involve mortality. Hundreds of people die each year from illegally, unsafe working conditions as well as medical procedures done only to collect hefty fees. More commonly, these crimes involve embezzlement in which unwary customers and consumers are cheated time and time again. This report will analyze the cost / benefit , present value, and a decision tree diagram of the current policy, and two alternatives to that thereof in the goal of reducing the number of white-collar criminals engaging in embezzlement (Geis, 57).
Current Policy: Embezzlement of $ 10, 000. 00 or more is a felony of the second degree. Maximum fine is $ 7, 500. 00. Alternative 1: Increase fines to a maximum of $ 10, 000. 00. Alternative 2: The 17, 000 police departments across the United states will hire two accountants per agency who will do nothing but randomly check the financial books and records of the companies included in their district. The fine will also be increased to a maximum of $ 10, 000. 00. The academic study of embezzlement has had an erratic history.
It was forcefully brought to the attention of the scholarly community by Edwin H. Sutherland, then a 56 year old sociologist at Indiana University in the midst of his 1939 presidential address, when he coined the term white collar crime and denounced that in no certain terms those who engaged in what he saw as evil machinations at the expense of the public well being. The hostility toward business in Sutherland s pioneering polemic on white-collar crime has never been permeated criminological studies and statements on the subject. It reflects a belief among many social scientists that the conduct of business is an epidemically corrupt enterprise. Any endeavor whose basic goal is to profit maximization, it is felt, will be tainted and twisted (Geis, 59). We have come up with new means, through Alternative 2, to keep a watchful eye in the process thereof.
While the Current policy and Alternative 1 are both self explanatory, Alternative 2 may be in need of explanation. We have decided to hire two accountants per police district. Some smaller agencies will only hire one, while larger agencies will hire three. These accountants will go to every business in their district and check financial records to make sure that each is being ran in a legal manner. Investigations will be called to those which are in question and maximum fines will be placed on those who do not abide by the law. White-collar crime is an area of study in which much material remains to be minded.
It also is a realm of inquiry that sheds considerable light on some of the more significant aspects of contemporary life. Among the social and criminological issues that further work on white-collar crime can illuminate, the following seem notable: 1. White-collar crime challenges the more banal kinds of explanations of criminal activity. To say that poverty causes crime fails utterly to account for widespread lawbreaking by persons who are extraordinarily affluent. To suggest that criminals lack self-control similarly ignores offenders such as anti-trust violators and inside traders whose lives and achievements represent models of success through the exhibition of self-control. 2. White-collar crime indicates the distribution of power in our society.
An examination of status shows corporate and occupational acts have come to be included within the criminal code and regulatory laws and activity that goes without query. The enactment of new legislation is the key factor in prevailing at reducing embezzlement. 3. White-collar crime portrays the manner in which power exercised illegitimately in our society. A review of upper world violations and the manner in which they are, and are not, prosecuted and punished tells who is able to control what in American society and indicates the extent to which such control is effective. 4. White-collar crime provides an indication of the degree of hypocrisy present in society. Such hypocrisy may be seen as leverage by means of which the society is forced toward congruence between its verbal commitments and actual conduct, much as Gunnar Myrdal insisted.
He believed that the dilemma in the United States between democratic ideas and the actual treatment of minorities exerts incessant pressure for reconciliation in terms of the values. In regard to embezzlement and white-collar crime, hypocrisy exists when crime among the lower class is viewed with distaste and punished severely while upper-class depredations are countenanced and defined as nothing more than shrew business practice. 5. White-collar crime illustrates changes in social and business life, thus, the old time grocer weighing merchandise by hand and dealing with customers on a personal basis probably had less inclination and less opportunity to defraud. Today s supermarkets engage essentially in the rental of shelf space to manufacturers and producers and epitomize impersonally resulting in consequences of crime involving consumer fraud and deception. 6.
White-collar crime furnishes helpful material for understanding the changes in social values. Present-day laws demanding that foods be uncontaminated and attempts at pollution controls reflect an emerging ethos that insists that every person be accorded every reasonable opportunity to remain alive and healthy until cut down by uncontrollable forces. In the future, if support cements for the right of all human beings to achieve their full potential, new forms of white-collar crime will be legislated. The following is the costs and benefits of the three elements of legislature, current and futuristic. Cost/Benefit Analysis Current Policy: Cost of court procedures: 15, 200 arrests @ $ 350. 00 = $ 5, 320, 000. 00 Police officer s salary: 600, 000 officers @ $ 35, 000. 00 = -$ 21, 000, 000, 000. 00 Fines: 10, 832 convictions @ $ 7500. 00 = $ 81, 240, 000. 00 Total: -$ 20, 924, 080, 000. 00 Alternative 1: Cost of court procedures: 15, 200 arrests @ $ 350. 00 = -$ 5, 320, 000. 00 Police salary: 600, 000 officers @ $ 35, 000. 00 = - $ 21, 000, 000, 000. 00 Fines: 10, 832 convictions @ $ 10, 000. 00 = +$ 108, 320, 000 Total: -$ 20, 897, 000, 000. 00 Alternative 2: Accountants: 34, 000 accountants @ $ 40, 000. 00 = -$ 1, 360, 000, 000. 00 Court Costs: 15, 200 arrests @ $ 350. 00 = -$ 5, 320, 000. 00 Fines: 10, 832 convictions @ $ 10, 000. 00 = $ 108, 320, 000. 00 Total: -$ 1, 257, 000, 000. 00 In the Cost/Benefit analysis, the number of arrests for embezzlement / white -collar crime in Ohio is 15, 200 a year. This information was given to us by the Clerk of Courts.
The number of police officers in Ohio is 600, 000. This information was taken from the Source Book of Criminal Justice. Alternative 2 is the highest benefit and lowest cost. The physical harm that can be directed toward white-collar crime is financial loss, which coincides with at least three groups: employees of offending firms, consumers, and the community at large. Physical harm to employees include unsafe working conditions, the effects of black-lung disease and asbestos poisoning, and harm done resulting from the sale of unsafe products. These operations include mining and fiberglass plants, old buildings, and food and drug sources.
Perhaps the most dramatic and significant case of consumer harm in recent history arose over the manufacturer and sale of an automobile, the Ford Pinto, which has been linked with a number of driver and passenger fatalities due to an unsafe fuel tank. Although the criminal trial related to this case resulted in acquittal of the Ford Motor Company, commentators have been quick to point out that the principal of manufacturers liability for their products was more firmly established by the trial. Many other instances of severe physical harm might be cited, although they have not always resulted criminal prosecution and conviction. For several years the Beechcraft Company allegedly used a fuel pump with a faulty design that caused a number of deaths of pilots and passengers in the Beechcraft Bonanza series of aircraft; the engine would often stall when the plane was breaking shortly after takeoff, causing a loss of power and control (Geis, 89). Perhaps because physical injuries are not readily quantifiable in terms of dollars and cents, these consequences of white-collar and corporate criminality are viewed as more serious by citizens than are financial or property losses.
One problem is that it is often impossible to demonstrate those actions leading to physical injuries which were intentional or the result of faulty decision making or other human-like qualities. This evidently accounted for the recent court decision that found Ford Motor Company not guilty of the deaths of persons resulting from the Pinto fuel tank explosion and fire. To cite the lack of complete documentation concerning corporations argue against notion that the public, regardless of strict legal criteria, may blame corporations and their officers for such acts (Geis, 92). Nevertheless, it must be recognized that all the cautions concerning data sources regarding economic harm apply with even greater force in the case of physical harm. The present value analysis shows what the Current policy, Alternative 1, and Alternative 2 would cost five years into the future; all are small prices to pay to end this deception. Current Policy: Court Cost Court Cost Court Cost 15, 200 ($ 350) 15, 300 ($ 400) 15, 000 ($ 400) Police Police Police 600, 000 ($ 35, 000) 600, 300 ($ 35, 000) 600, 300 ($ 36, 000) Court Cost Court Cost 15, 900 ($ 400) 16, 000 ($ 450) Police Police 601, 300 ($ 36, 000) 601, 500 ($ 37, 000) Total 1 Total 2 Total 3 $ 21, 000, 000, 000 $ 21, 010, 500, 000 $ 21, 610, 800, 000 Total 4 Total 5 $ 21, 646, 800, 000 22, 255, 500, 000 Total 1 + Total 2 / 1. 05 + Total 3 / 1. 10 Total 4 / 1. 16 Total 5 / 1. 22 Total Five Year Projected Cost = $ 97, 559, 428, 779 Alternative 1: Court Cost Court Cost Court Cost 15, 200 ($ 350) 15, 000 ($ 400) 14, 000 ($ 400) Police Police Police 600, 000 ($ 35, 000) 600, 300 ($ 35, 000) 600, 300 ($ 36, 000) Court Cost Court Cost 13, 500 ($ 400) 13, 000 ($ 450) Police Police 601, 300 ($ 36, 000) 601, 500 ($ 37, 000) Total 1 Total 2 Total 3 $ 21, 005, 220, 000 $ 21, 016, 500, 000 $ 21, 616, 400, 000 Total 4 Total 5 $ 21, 652, 200. 000 $ 22, 261, 350, 000 Total 1 + Total 2 / 1. 05 + Total 3 / 1. 10 Total 4 / 1. 16 + Total 5 / 1. 22 Total Five Year Projected Cost = $ 97, 584, 904, 866 Alternative 2: Court Cost Court Cost Court Cost 15, 200 ($ 350) 15, 000 ($ 350) 14, 500 ($ 400) Accountants Accountants Accountants 34, 000 ($ 40, 000) 34, 000 ($ 40, 000) 35, 000 ($ 40, 000) Court Cost Court Cost 14, 250 ($ 450) 13, 000 ($ 500) Accountants Accountants 35, 000 ($ 41, 000) 35, 500 ($ 42, 000) Total 1 Total 2 Total 3 $ 1, 365, 320, 000 $ 1, 365, 250, 000 $ 1, 405, 800, 000 Total 4 Total 5 $ 1, 441, 412, 500 $ 1, 497, 500, 000 Total 1 + Total 2 / 1. 05 + Total 3 / 1. 10 Total 4 / 1. 16 + Total 5 / 1. 22 Total Five Year Projected Cost = $ 6, 413, 614, 094 When one sees a decline in the number of court cases, this means the system is working.
Salaries increase every few years in most occupations, so we have increased them as well. We have also added 5 % inflation every year. One can also see the number of police officers needed will increase. The number of accountants is based on the number designated to each district. Alternative 2 is the lowest cost over the five year period. Victims of white-collar crimes are people and organizations who give their confidence and trust to the unworthy.
Victims do not adequately screen their victimizer's or their proposals and they easily succumb to appeals to their fear, greed, as well as need for self-preservation (Geis and Scotland, 327). Victims of crime can sue, but they hardly ever get anything back or recover from their damages. The conventional wisdom in white-collar crime suggests the following: Psychological deterrents, physical security, and internal accounting controls are no match for a determined employee thief with access to assets and accounting books. Some criminal justice authorities believe that criminals reason through their crimes by weighing such factors as risk of apprehension, severity of punishment, and social disapproval against the expected rewards. Other authorities suggest that criminals become so involved in their risks that they overweigh the rewards and under-weigh the risks.
In other words, criminals have one-track minds; they are so determined and so goal-oriented that they chronically err a side of optimism. Indeed if it were not that way, police, auditors, and investigators would catch far fewer criminals. Much of the literature on criminal behavior deals with the seemingly irrationality of criminals. ; the assumption is that anyone who intentionally violates the law and risks social disapproval and punishment must be sick. The rationale stems from a very narrow point of view. White-collar criminals do, at least, assess the risks of apprehension, social disapproval, and punishment before they commit a criminal act just as investors do.
They both weigh both the risks and expected rewards. To them, crime is a matter for cost benefit analysis, which is a rational, utilitarian process. As a matter of control policy, it seems logical to maintain tight controls as a psychological deterrent. Deterrence is also a matter of cost and benefits as well as tough decision making. Control costs and a positive end result should bear some reasonable relationship to the value of the protected assets.
The following Decision Tree analysis looks at the effectiveness of the program. It forces people to think before they make a decision and is proposed in a logical format. Decision Tree Analysis The Decision Tree analysis our goal and the percentages of the likely increase and decrease of that thereof. This analysis was based on 10, 000 convictions. White-collar crime has been variously described or defined as occupational, corporate, economic, or financial deception. The common characteristics of each of the so-called white-collar crimes are intentional mendacity (embezzlement, fraud, theft, and corruption), destruction of property (industrial sabotage), gross negligence (product liability), failure to comply with government regulations on environment pollution, unfair pricing practices, false advertising, unsafe and unhealthy products, stock or tax fraud, and so on (Bologna, 9).
White-collar crime is that of stealth and deception. New legislation needs to be passed in order for this to cease. Trails are often destroyed, facts are distorted, justifications are concocted, and physical pressures are brought to bear on victims to discourage prosecution. Because white-collar crime can be detected by auditing books and records for breeches of control, trust, and confidence by spotting deviations from conventional accounting methods or deviations from expectations, we feel that Alternative 2 is the best choice.
As noted by yellow highlights, Alternative 2 results in the best Cost/Benefit, Present Value, and Decision Tree Analysis. It presents the lowest cost-highest benefit, lowest five year projection cost, and results in the highest reduction of the number of white-collar criminals. Everyone must become better informed about white-collar crimes in order to prevent deception and pass laws with tighter repercussions. For example, one must be wary of employees who never take vacations, live beyond their means, or suffer from mood swings. One must also be alert to offers that sound too good to be true- they usually are (Karchmer and Randall, 37).
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Research essay sample on White Collar Crime Cost Benefit Analysis
