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White-collar crimes are illegal non-violent activities that involve deceit, manipulation, and breach of trust among others. These crimes are committed by people of high status, high- ranking officials and government agents. White-collar crime is a term that has been applied to a wide variety of non-violent crimes that are often committed in offices and boardrooms rather than on the street. Crimes are committed by means of unlawful paper transactions rather than with weapons, by middle-class people rather than by career criminals. A society is an organized group of people linked together for religious, cultural, political, patriotic, or other reasons. It can also be defined as a group of people involved with each other through a large social grouping, sharing the same geographical or social territory, political authority and culture. White-collar crimes greatly affect corporate companies, consumers of products or services and the economy at large. White-collar crimes lead to loss of jobs, lives and, at times, dissolution of companies. Examples of white-collar crimes are a violation of anti-trust laws, computer fraud, and embezzlement, violation of environmental laws, financial crimes, identity theft, public corruption, tax evasion, and money laundering. This research paper looks at the effects of white-collar crimes on society. Various studies have established that victims of white-collar crimes are likely to be organizations than individuals. The following literature review attempts to show the effects of white-collar crimes on society.
Investment fraud as one of the examples of white-collar crimes that leads to financial loss by members of society. White-collar crimes have led to the loss of billions of dollars to people who become victims of investment fraud, according to Friedrichs in his book Trusted Criminals: White Collar Crime in Contemporary Society. Investment fraud may affect millions of victims of society or an individual in a society. People may lose their life savings or a nominal amount of money. Victims of investment fraud reported that their planned retirements would have to be deferred, needed health services could no longer be afforded and other projects for which they had longed saved were no longer possible.
Organizations are affected the most by white-collar crimes. They experience bad and harmful consequences in terms of diminishing profits and losses. Businesses become bankrupt and are likely to be dissolved because of white-collar crimes. Businesses that fall victim to white-collar crimes may be forced to undergo a transformation in order to overcome the consequences of white-collar crimes. When a company suffers from any kind of fraud, it makes up for the loss by rising costs, which in due course leads to high prices that are paid by its clients. The loss of money by the company because of fraud or embezzlement of funds can also mean reduced or delayed pay for employees and even loss of jobs by other employees. When fraud breaks out, like in the 1980s in the United States, it causes mistrust and investors, both from within the community and foreign investors, lose faith in the stock market. Embezzlement within or by the company causes big problems for many businesses because the goal of a business is to make profits. Embezzlers use all sorts of techniques or methods to get ahold of the resources of the companies they work for or are targeting. The methods used to embezzle company or public funds can be disruptive to regular businesses far beyond the simple loss of assets. For example, customers can be overcharged when buying goods or receiving services. Overcharging customers can alienate them, make the business appear like its incompetent, and cause misinterpretation of products or services produced by the organization. This may lead to the name of the business being tarnished because of the way customers, business associates and the general public look at it as being incompetent and a bad type of business.
White-collar crimes contribute to the rise in costs of goods and services purchased by people in a society or nation. White-collar crimes, like corporate crimes that involve tax evasion, cost millions of dollars and usually, these costs are spread across to people in the society without their knowledge. Corporate crime leads to increase in prices of goods that is felt by consumers, it also leads to increase in the cost of carrying out businesses in terms of taxes imposed on the businesses, which has a negative effect on the pricing of goods and services, hence, leading the society into economic hardship. Example of corporate crimes that are committed against the public include violation of patent rights, advertisement that is misleading or false to the public, pollution of the environment intentionally like dumping toxic waste in public places, production and supplying products that are hazardous to the public, adulteration of drugs or food, insider trading and falsification of financial documents. Sutherland stated that, at the time, "explicit (court) decisions of infringement of patents (had) been made against 42 of the 70 large corporations...(and) the total number of these explicit decisions (was) 114, with a range of one to 13 per corporation...” Supplying defective goods, carrying out monopolistic practices, and other corporate crimes cost customers billions of money yearly. In the health sector increase in Health Care Insurance Fraud leads to an increase in the medical cost because people have to pay highly for medicine and services offered by doctors and nurses in order to cover up for the money that is lost through fraud.
White-collar crimes lead to loss of jobs by people in the society who work in an organization where the employer is found guilty of crimes like embezzlement of public funds or tax fraud. among other kinds of white-collar crimes. Numerous Enron workers lost their jobs and savings, felt angry and betrayed, following the collapse of the corporation in the wake of massive internal fraud. Members of the society can also work for an organization that engages in white-collar crimes. “Besides maintaining unsafe or unhealthy working conditions, the principal offense committed by corporations against their employees involves unfair labor practices (i.e., the refusal of a company to participate "in good faith with employees in collective bargaining" or "interference with the efforts of employees to develop their own organization for collective bargaining" (Sutherland.) Employees also dismiss or demote workers who refuse to engage in white-collar crimes within the organization, those who join labor unions or refuse to employ and use threats or violence to prevent workers from participating in a labour union.
Environmental crimes like the dumping of toxic wastes, production, and selling of drugs or chemicals that are harmful to users affect the health or physical conditions of members within the society. For example, the Bhopal Union Carbide case where thousands of people died or were disabled because of the emission of poisonous gases. Other environmental crimes include disposal of garbage that contains harmful chemicals like oil, bleach, which leads to pollution of the environment, which can turn out to be harmful to the community. Polythene bags, plastics containers, and other materials, when burnt in public places contaminate the air and this can affect people’s health like the smoke can cause problems with lungs when people breathe in the contaminated air. Improper disposal of garbage leads to leaching of methane gases into the soil, methane is created when garbage is disposed of in public areas. This chemical can cause contamination that can reach plant and animal life as well as water sources. Contamination of water can lead to a breakout of waterborne diseases in the society which in turn leads to death. Pollution of soil affects agriculture, this affects food production in the affected areas, and low agricultural output affects the economy as they have to import food products from other countries or communities.
Psychological trauma, the psychological suffering of white-collar crime victims is likely to take a somewhat different course than that of conventional crime (Friedrichs). The victims may take long to accept and move on from what happened to them. People who have been affected physically, for example, becoming disabled due to white-collar crime, may take longer to overcome their experiences and accept their current state. The victims may harbor anger towards the people or person responsible. According to Friedrichs, the common psychological response to either anticipation of or the experience of white-collar crime victimization is distrust and cynicism. Psychological trauma is not limited to victims of physically injuring white-collar crimes. It also occurs in conjunction with white-collar crimes involving financial loss, although the degree of psychological trauma varies. Effects may include birth defects, sterilization in men, cancer and other kinds of illnesses.
Identity theft is a form of stealing someone's identity in which someone pretends to be someone else by assuming that person's identity, typically in order to access resources or obtain credit and other benefits in that person's name. This kind of white-collar crime is always rampant when it starts happening within society. The people who practice this crime tend to target society. The victims of identity theft that is the people whose identities are assumed by the thieves, suffer adverse consequences when they are held accountable for the crimes that the thief or thieves commit. This kind of crime happens when a person uses another person’s or other people’s identification information, for example, their name, identification number, among others, without the permission of the victim to carry out fraudulent activities or other types of crimes. Identity theft leads to mistrust within the society, useful information is also found by the thieves and used to rob the public, for example, bank details.
Government fraud involves unlawful acts that purposely rid the government of funds through deception. When fraud occurs within the government taxpayers are made to pay high taxes. Examples of government fraud include procurement and contractor fraud. In identity theft, the criminal uses the personal information of another in order to commit fraud. Corruption that is practiced by public officials in government, like employing unqualified people in office after receiving bribe, leads to lack of opportunities for other people in the society who are qualified this, in turn, leads to unemployment especially among the people who are not doing well financially and are not able to bribe the officials. Engagement of elected leaders like politicians or people hired in a government office in activities that amount to fraud, for example, mismanagement of public funds, or stealing of government resources like land and allocating the resources to themselves and their families or friends, leads to inequality in the distribution of resources among people in the given community. This has a negative impact on the way people view the government as the government is looked at as being corrupt and incompetent by society.