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Example: A man with assets worth $20,000 shows its worth to be $10,000, and later files for bankruptcy. This is committing a bankruptcy fraud by concealing the remaining $10,000 in assets.

Insurance Fraud

This occurs when a person claims for the advantages of an insurance scheme under false circumstances, or by staging events that lead up to it. The opposite is also true in this case, wherein someone knowingly denies the person his benefits under the insurance scheme. Insurance frauds are spread across various sectors, and in large numbers.

Example: A man whose house or property was damaged in a fire claims for payment of a value that is more than the value of the actual damaged property. This is a case of property insurance fraud.

Credit Card Fraud

This is basically the use of credit card (or any other payment card) for false payments or theft. It can also be used to steal another person's identity by using his credit card details.

Example: A person may use lost/stolen credit cards to make purchases on the actual card holder's name.

Internet/Computer Fraud

This is done by gaining access to someone's computer or online bank account by hacking, or other attacks like phishing which involves sending a fake link to the user. Internet fraud also includes e-mail fraud, which is the sending of fraudulent e-mails and seeking personal details under false offers or schemes. It is therefore essential to authenticate such e-mails before responding.

Computer crimes represent one means by which white-collar criminals exploit technology. Common examples cover a wide variety of criminal activity, including using a computer as a mechanism for committing securities fraud, credit-card fraud, and identity theft. Computer crimes also may involve illegally accessing and tampering with other users’ computer files.

Example: When a person gets a link to a page that is similar to his business transactions page, and enters his PIN and other personal details, he/she is directed to the fraudster who uses this information for theft or other wrongdoings.

Counterfeiting

Counterfeiting means imitating a valuable item and passing it off as real. It includes currency, bond papers, brand-name products, etc. The quality of the duplicate item is not up to par, causing harm to the value of original item in the market.

Example: A wrist watch belonging to a particular brand is not available in a particular region. But wrist watches with almost similar design (although not at par with the quality) are still available with a brand name that sounds almost similar to the original one.

TEXT 5. COST TO SOCIETY.

https://www.britannica.com/topic/white-collar-crime

White-collar crime represents one of the fastest-growing types of crime in the world. Nearly every category of white-collar crime has increased in incidence in recent years. For example, over the course of two years in the early 21st century, annual losses from fraudulent use of identity rose by more than $300 million in the United States. (See Identity theft and invasion of privacy.) Likewise, while the number of almost every other type of civil lawsuit in the United States decreased around the turn of the 21st century, the number of government and private lawsuits for white-collar crimes more than doubled during the same time period.

This represented a trend, begun in the late 20th century, of a number of highly visible whitecollar prosecutions in the United States. They included the prosecution of financiers Ivan Boesky (1986) and Michael Milken (1990) for billions of dollars in securities fraud, the convictions of banker Charles Keating (1992 and 1993) for having looted his own savings and loan (S&L), ultimately touching off what became known as the “S&L Crisis,” and the guilty plea entered by Enron Corp.’s chief financial officer, Andrew Fastow (2004), on charges of having manipulated off-balance-sheet transactions (in this case, of having concealed the company’s debt obligations by transferring them to offshore partnerships), which led to Enron’s collapse. In an associated case, Enron’s accounting firm, Arthur Andersen LLP, was convicted of obstruction of justice

(2002; overturned in 2005), which caused the firm to go out of business.

Similar cases have occurred throughout the world. In February 1995, Barings Bank in London collapsed as a result of deceptions practiced over three years by one of its futures traders. In Canada, two people pleaded guilty in 2001 to having bilked financial institutions, including the Royal Bank, out of $92 million by creating 52 fake leases for nonexistent medical equipment.

Although white-collar crime has traditionally been viewed as less serious than other types of crime (largely because it does not involve physical violence), by the late 20th century there was a growing recognition of the significant harm it causes. In a single year, for example, nearly $500 million in restitution was awarded to victims of white-collar crimes.

The cost of corporate crime to society is many times that of organized crime or the more common street crime. Moreover, it cannot be measured in monetary damages alone, because corporate crimes can also pose health risks, compromise safety, cause injuries or fatalities, bring harm to wildlife and the environment, and lead to organizational failures and associated job losses. Owing to the concealed nature of many frauds and the fact that few are reported even when discovered, their cost is impossible to estimate precisely, but in the United States it is thought to be at least 10 times the combined cost of thefts, burglaries, and robberies. When compared with crimes committed by juveniles or the poor, corporate crimes are very rarely prosecuted in the criminal courts, and, despite many well-publicized convictions of corporate leaders found guilty of wrongdoing, executives rarely go to jail, though some companies may pay large fines.

PUNISHMENT

https://www.buzzle.com/articles/white-collar-crimes-definition-types-and-examples.html

The punishment for white-collar crimes includes imprisonment, fines, restitution, probation, besides other methods. With the scale of scandals and frauds uncovered increasing rapidly in recent times, government agencies like the FBI and SEC are adopting stricter laws related to such crimes. After the breaking out of major scandals in the year 2000, the Sarbanes-Oxley Act was passed in 2002, which focused on the shareholders and their rights. The punishments for white-collar crime is a debated topic across various governments. In some nations like China, offenders of white-collar crime can also be given the death penalty. White-collar crimes, although not violent, do affect their victims in substantial ways.

Text 6. FAMOUS CASES

Read the texts about famous white-collar criminal cases. Prepare the report according to the plan below.

o The name of the perpetrator/ perpetrators; o a crime that was commited;

o cost to society; o punishment.

ENRON CASE

Former energy giant Enron Corporation was exposed in late 2001 to be a part of one of the biggest and highly coordinated accounting frauds in history. The revenues generated by the corporation were manipulated in the account audit books to show larger amounts of profits. The executives were highly pressurized to find ways to hide the company's debts. The financial statements were so complex and confusing that the shareholders and analysts were unable to make out the misrepresented earnings. The Enron scandal cost almost 4,000 employees their jobs, and many of them their life savings. Investors lost millions of dollars, making it one of the most gruesome white-collar crimes ever. Many of Enron's executives, including the major perpetrators, founder and chairman Kenneth Lay, and COO Jeffery Skilling, were later convicted and incarcerated.

WORLDCOM CASE

Shortly after Enron's collapse, another company that followed the path of corruption and accounting fraud was Worldcom. With the telecommunications industry in decline in the year 2000, Worldcom CEO Bernard Ebbers used fraudulent methods to deceive investors into thinking that the company was unaffected by the decline, drawing in huge amounts of money from investors. Bernard Ebbers was sentenced to 25 years in prison, in 2005.

BERNIE MADOFF CASE

Bernard 'Bernie' Madoff founded a firm called 'Bernard L. Madoff Investment Securities LLC' in 1960. Madoff committed the largest financial fraud in the history of the United States, admitting the firm he ran for more than 40 years to be a massive Ponzi scheme (a fake investment operation). He generated false trading reports and went on to build a multi-billion dollar firm. He was exposed after one of his sons, Mark, reported his misdeeds. In 2009, a few months after his arrest, Bernard Madoff admitted to a wide range of crimes, which included securities fraud and money laundering. The losses incurred by investors were more than $18 billion. His son, Mark Madoff, committed suicide two years after his father's arrest, and Madoff was sentenced to 150 years in prison, and asked to forfeit $170 million in assets.

It is difficult to track down white-collar crimes before they cause substantial damage with the level of sophistication involved. What is useful in this scenario is the right knowledge and awareness of your rights and laws, whether you are an investor or a business person starting out your own company.