White-collar crimes such as embezzlement, fraud, tax evasion, false advertising, and unfair labor practices have occurred with regularity throughout the history of businesses and corporations. Whether committed at the individual or corporate level, these crimes can destroy companies and the lives of employees and investors as well as hurt customers and everyday Americans.
Although business crimes can be perpetrated by business owners, most white-collar crimes are committed by individuals who work for or manage businesses. Therefore, business crime in the United States has developed hand in hand with the growth of large businesses. As businesses grow too large for every aspect of their operation to be overseen by their owners, the opportunities for fraud and embezzlement multiply. Corporations, in which ownership and management are separated, are especially vulnerable to white-collar crime. One of the earliest forms of corporations, the
The largest railroad fraud of the nineteenth century involved
The most widely held securities in the United States during the 1920’s were the stocks and bonds of
In 1938, the
The salad oil swindle was perpetrated by Anthony “Tino”
The 1970’s witnessed the dawn of computer fraud, with extensive news coverage of the use of computers to defraud shareholders at
During the 1980’s, hundreds of financial institutions, primarily savings and loan associations, failed because of insider fraud, leading to a congressional investigation headed by Michigan congressman John Dingell. The oddest part about the cases of the 1980’s was that so many companies were involved, and most of them were in the same industry.
Former head of Qwest Communications, Joe Nacchio, arrives at the federal courthouse in Denver for sentencing on insider trading charges in July, 2007. He was one of many top-level executives targeted by a government task force established in 2002.
In the twenty-first century, HealthSouth, Global Crossing, Tyco International, Enron, and WorldCom were all involved in scandals that were reminiscent of the nineteenth century railroad cases and the Kreuger debacle. In every case, the corporate governance system broke down or did not exist, and greedy individuals either took corporate assets for their personal use or manipulated stock prices to defraud stockholders. The seemingly endless string of financial frauds in public corporations has cast doubt on the credibility of even untarnished corporations. Such trust, once lost, is slow to return. The result of these highly publicized white-collar crimes was doldrums in the financial markets during the 1870’s, 1930’s, the 1960’s, the 1980’s, and the early years of the twenty-first century.
Cooper, Cynthia. Extraordinary Circumstances: The Journey of a Corporate Whistleblower. New York: Wiley, 2008. The full story of the downfall of WorldCom by the internal auditor who uncovered the fraud. Fox, Loren. Enron: The Rise and Fall. Hoboken, N.J.: Wiley, 2003. Examines Enron’s culture and what led to the fraud there. Also discussed are the impacts on the financial markets and the U.S. economy. Miller, Norman C. The Great Salad Oil Swindle. New York: Coward McCann, 1965. Tells the story of how one man manipulated millions of gallons of nonexistent salad oil, resulting in the bankruptcy of two Wall Street brokerage houses; caused the demise of a subsidiary of American Express Company; and destroyed the stability of the stock market. Minkow, Barry. Clean Sweep. Nashville, Tenn.: Thomas Nelson, 1995. Autobiographical work describing the author’s leadership at ZZZBest, involcing one of the largest frauds of the 1980’s. Pilzer, Paul Zane, and Robert Deitz. Other People’s Money: The Inside Story of the S&L Mess. New York: Simon & Schuster, 1989. The story behind the frauds at savings and loan associations during the 1980’s. Shaplen, Robert. Kreuger: Genius and Swindler. New York: Alfred A. Knopf, 1960. Explains the role of Ivar Kreuger in what at the time was the largest corporate bankruptcy in history. Kreuger’s securities were the most widely held in the world.
U.S. Department of Justice
Private security industry
Racketeer Influenced and Corrupt Organizations Act
U.S. Secret Service
U.S. Department of the Treasury