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What is the popular image that
comes to mind when one speaks of the stereotypical racketeer? The
traditional image is most likely one of people who live in the
twilight: squat, swarthy men; sharpers, wearing bespoke suits with a
slight bulge in the jacket, wherein resides a gat; snap brim hats,
sporting pinkie rings, chins darkened by 5 o'clock shadows, part of
the illegitimate economy. Their profession is that of dastardly
deeds.
A closer look at the complete
phenomenon of racketeering reveals greater complexity and scope,
particularly in the inclusion of persons, businesses and corporations
that function in the legitimate economy yet dip into criminality if
not most of the time certain when the occasion warrants. Such crimes
range from opportunistic whitecollar offenses (such as abuse of
office or malfeasance) to systematic business and corporate
criminality (thereby triggering RICO, the racketeering statute).
Walmart covers up millions of
bribes paid to local corrupt officials in Mexico. A former Morgan
Stanley executive was convicted of funneling money to officials in
connection with real-estate investments. Several Hollywood studios
have used bribes to crack the Chinese movie market. Is "legitimate
businessman"� an oxymoron?
When compared to organized
crime, whitecollar crime is not a classic, clear-cut case of
deviance. It has one foot in conventionality and one foot in unlawful
activity. Whitecollar is intermingled with legitimate dealings. There
is theft by manipulation of symbols rather than objects. Compared to
bluecollar crime, prosecutions are expensive, and convictions and
solid leads are much more problematic. Penalties do not rise to the
level of street offenses; physical coercion and death less likely.
The "smoking gun"� at the scene of the crime is a metaphor rarely
seen. Schemes, frauds and swindles proliferate: health care, Ponzi,
advance fee, telemarketing, investing; the list is extensive. The
more sophisticated the economy, the more the opportunities.
The costs to society can be
substantial, but the impact on the general public is not as apparent
nor seen as a mortal threat to the social fabric as is the daily
violence associated with street crime. WC criminality is not as
highly stigmatized; media coverage is often limited; the persons
involved do not acquire what is called "criminal tendency"�
profiles as do mobster racketeers or thieves or killers because they
are statistically less likely to become repeat offenders. They are
more likely to suffer the shame of arrest, conviction and
incarceration. Given these factors plus expensive lawyers, fines are
affordable, prison sentences are not long and incarceration is at a
minimum security lockup.
Yet the amount of money stolen
in WC crime far exceeds that of common robberies in the United
States. The increasing number of prominent fraudsters and the
duration of some WC criminal activity (such as Bernie Madoff's
scheme) underscore the epidemic levels of WC crime. The public tends
to set aside the cost to society: it is time for the scales to fall
from our eyes.
What follows is a sampling of WC
criminality taken from recent newspaper articles:
In Rochester, NY, the FBI raided a
Pawn Shop that was the center of a multilayer criminal enterprise
with street-level criminals. The Shop was the hub for stolen
property. Investigators seized $241,000 in cash, three vehicles and
more than a million dollars worth of property. Nine bank accounts
held a total of $461,000.
In Center, Texas, a DA allowed drug
runners and money launderers to receive light sentences if they
forfeited their cash to prosecutors, who collected more than $800,000
in less than a year. The system was engineered by the Shelby County
District Attorney, Lynda Kaye Russell.
Five NY police officers smuggle
firearms and slot machines and pilfered hundreds of boxes of
cigarettes worth more than $500,000 from tractor-trailers as part of a
12-person theft ring.
New York. To fatten year-end
bonuses, a Credit Suisse executive and two employees conspired to
hide the failing condition of the USA housing market in 2007 to keep
values of bonds based on subprime bonds artificially high. Millions
of dollars were to be received. "It is a tale of greed run amok,"�
officials announced.
Dallas, Texas. A health care fraud
scheme bilked Medicare and Medicaid of $375,000.Medicare was billed
for home health services that were not medically necessary or not
done. Others charged in the scheme included owners and employees of
health care businesses.
Federal authorities charged 107
doctors, nurses and social workers in seven cities with Medicare
fraud in a nationwide crackdown on scams that bilked the
taxpayer-funded program of $452 million. Such fraud costs the
government up to $90 billion each year.
New York. Standard Chartered Plc
settled a NYS money laundering probe for $340 million. I helped Iran
launder 250 million in violation of federal laws.
Ex-New Orleans mayor Ray Nagin
charged with bribery, fraud. The case alleges that Nagin awarded
contracts to contractors in exchange for $200,000 in kickbacks and
first-class trips to Hawaii, Jamaica and Las Vegas.
Montana family accused of $70
million in bogus phone charges tacked onto customer phone bills
nationwide. The money was then laundered through a religious
organization to buy property and pay for the husbands legal bills.
Since 2008, $40 million was returned after customer challenges.
Millions of cigarettes were seized
in a NYS Cayuga tribe convenience store as well as more than $550,000
from a bank account connected to the shop. In 2012, more than $16
million was deposited in the stores bank account. The cigarettes
did not include a NYS tax stamp required by law. Money laundering is
alleged with the cash flow from the shop.
Detroit ex-mayor Kwame Kilpatrick
was convicted of running a criminal enterprise complete with
extortion, bribes and kickbacks while in office. He and friend Bobby
Ferguson ran a racket out of the mayors office. He was convicted
on 24 of 30 counts. Both could spend up to 20 years in prison.
The Superintendent of Atlanta Public
Schools and three dozen others were indicted on charges of
racketeering. There were false statements and theft in one of the
nations largest test cheating scandals. Bonuses received were tied
to falsified test scores.
Rita
Crundwell, a leading horse breeder, embezzled more than $53 million
from the town of Dixon, Illinois, which has a population of 16,000
and an annual budget of $6 to $8 million. As Dixons comptroller,
she carried her scheme for twenty years until it was revealed she had
a bank account and was taking city money to finance a lavish life
style. Her brazen activity earned her the moniker of "Pink Collar
Mafiosa"�. She is currently serving a long sentence in a West
Virginia prison.
