Week 6

White Collar Crime

• Includes crimes committed both by and against corporations or businesses.

• Also incorporates political crimes– ex. Watergate, Iran-Contra

• More difficult to research and prosecute due to partial government complicity– HMOs

– Firearm companies

– Tobacco

– “Just wear sunscreen”

Professions and the law

• Most organized professions control legal aspects of that profession

– political action committees

– AMA, APA (Psychiatric) and ADHD

• Also businesses control actions of employees

– Complicity in guilt

– Threats of employment repercussions

– occasional threats of violence

• Karen Silkwood

Medical “Science”

• Medicaid Fraud

– estimated $50-80 billion/year

• 2.4 million unnecessary surgeries/year

• approx. 100,000 accidental deaths

• Medical research

– $$$ not empiricism

– FenPhen

– Hwang Woo-suk Cloning Controversy

Crimes at the consumer level

• “Psst, wanna buy some speakers?”

• Airline Training schools

• “God says send in your money”

• Telemarketing scams

• Scams that prey on victims of telemarketing scams• “You won a prize, call this number” (long distance charges may apply)

• Keys on the roof

• Ponzi Schemes (send me your $100 and put your name on this list)

• Sell junk to your friends

• Pyramid schemes

Koscot Interplanetary, Inc. and Amway

• Koscot in the 1970’s was cosmetics company

– Glenn Turner

– Pay $2000+$5400 for supplies

– Earn bonuses for recruiting others

• Amway

– purchase household products from “sponsor”

– try to get others whom YOU can sponsor

– Actually sold stuff, thus avoided “pyramid” laws

• Be wary off:

– Up-front recruiting costs

– Ridiculously priced products

– mandatory minimum purchases

– exaggerated income claims & rock and roll want adds

– No buy-back policy

Crimes by Big Business

• 60% of business have been involved in criminal/civil actions

• Oil, drug companies, and automobile industry are biggest offenders– very lenient punishments

• Government involved with Big Business– Reagan and the EPA

– HMO Patient’s Bill of Rights

– Slush funds

– the $73,100 toilet seat

• Business seek to circumvent government power in order to make more $$$

– Microsoft and Anti-Trust law

Safety and Money

• Companies regularly balance the costs of recalling an unsafe product versus simply paying off lawsuits

– “pre-owned”flood vehicles

– Firestone & Ford

– The “slightly combustible” Ford Pinto

– Brown and Williamson Tobacco

– The DC-10 Cargo door~~~346 deaths in France

– GE covers up engine flaws

– Cordis’ pacemakers

– Cholesterol inhibitor kills rats

• 20 million injuries, 30,000 deaths from defective products

Safety and Money Part 2

• Killer IUDs sold overseas

• Depo Provera malignant tumor research

• “NuSalt” salt substitute

• Pesticides exported to other countries, products imported to US

• Do you KNOW what goes into hamburger meat?

• Nestle’s killer baby formula sent to Africa

• Returned spoiled meat turned into processed food~~~(sold as “Windsor Loins”)

• Safety laws can be violated by– changing the product name

– changing the formula by adding a few inert ingredients

– manufacturing outside of the US

– import ingredients separately and assemble

Environmental Crime

• Three-Mile Island– faked safety tests

• Companies circumvent US environmental law through illegal toxic waste dumping– dumping medical wastes in international waters

– chemical recombination

– companies tend to oppose all environmental legislation• claim it will hurt the consumer

• make token efforts to look good (Miami sugar farmers)

• argue humans more valuable than nature

• count on short term goals

Environmental Crime Part 2

• Hospital disposal of amputated limbs in public trash

• Exposure to Hepatitis B on the job

• Allied Chemical defrauds the Army and the EPA

• Radioactive dumping at sea

• Mercury run-off in Rhode Island

• Pig waste spills in Pennsylvania

• Companies will attempt to avoid links by:– dumping in international waters/ 3rd world countries

– using 3rd party dumping companies

– showing inspectors to “dummy sites”

Crimes against Employees

• OSHA limits exposure of employees to hazards– Meatpackers work right after surgery

– Asbestos welding gloves

– building fumes

– exposure to arsenic, cyanide=negligent homicide, but fined only $25,000

– Safety measures on machines

– Businesses have been fighting new OSHA regulations on grounds it would “hurt consumers”

• including measures to avoid carpal-tunnel syndrome and tendonitis

• better ventilation for ALL office buildings

• better regulation of exposure to neuro and cytotoxins on the job

• better regulation of exposure to carcinogenic substances

Industrial War Crimes

• Standard Oil sells gasoline to the Nazis through Switzerland post 1941

• Swiss banks and the Nazis

• American Insurance companies and Jewish war dead

• Ford trucks in WWII

• Industrial Espionage

– IBM has lost billions to French and Japanese

– typewriter repair men

– television transmitters and phone bugs

– French considered to be worst offenders

Lenient Punishment

• Most laws are recent, including fraud, anti-trust, false advertising, etc.

• Libertarianism and laissez-faire

• “Trickle-down” economy

• Less publicity…violators often own stock in media

• intermingling between business and politics

• white-collar criminals do not fit stereotypes of criminals

• corporate law allows for many legal delays….ex. IBM

Cyber Crime

• Crimes committed in the context of computer/internet environment

• Takes numerous forms:

– circumvention of trade law

– false advertising

– circumvention of pornography laws

– solicitation of minors

– viruses & trojan horses

Circumventing Trade Laws

• By use of internationally based web-sites, US trade regulations can, in part, be circumvented.– Particularly laws regarding controlled substances

– some products may not be sold in US, but is ok to sell from out of US

– some products ok to sell in US, so as do not advertise as “medicine”…ok though in other countries

– Germanium~~~cures cancer, AIDS and the common cold, so long as you are not too attached to your kidneys.

– GHB recipes

False Advertising

• Caveat Emptor on the internet– selling of false merchandise on EBay

– violations of copywrite law• File-Sharing Programs

– Get-Rich-Quick Schemes

– Diet-Plans

– “How to get rid of junk E-mail” E-mail

• Some of these seek Credit Card numbers– Will charge you a large fee for useless product

– make charge then disappear altogether

Circumvention of Pornography Law

• Porn regulations in US are fairly lenient, nonetheless there ARE some regulations. However, these can be violated through use of international web sites.

• Depictions of nude children

• Depictions of children engaged in sexual behavior

• Bestiality and “bizarre” sex not typically encountered within US porn industry

• Sites include those in Netherlands, Sweden, Ukraine, Japan and Russia

Child Pornography

• Sites featuring nude children difficult to prosecute

• Sites involving child porn typically are international

• However private groups often exchange hardcore child porn– may involve webs of exchange, photos of own children

– also engage in marketing child porn literature

– primarily a support structure for pedophiles

– may legitimize actions of pedophiles

• Pedophilic support groups– NAMBLA

“Innocent Images”

• 1995 FBI raids 120 homes of AOL users to prosecute child porn ring in US

• included photographs of individuals aged 2-13 either posed nude or engaged in sex acts

• probe began because 10-y.o. George Burdynski abducted by suspected pedophile

• 12 arrested in total

• attempts to regulate Internet transmission hampered by both international concern and 1st amendment

Pedophiles on the Web

• Pedophiles may search for youth victims on web

– MySpace.com

• Allows them a safe environment– allows pedophiles to be more aggressive

– allows for seduction before meeting

– may use offers of gifts or money

– may use ruse to get child alone

• Minors themselves less supervised– may lack maturity to deal with sexual overture

• High risk, as perpetrator would have little previous attachment to victim

Cyber Hoaxes

• Little Girl Dying of Cancer

• Microsoft will buy you a new computer

• Bud Frog Virus alert

• Elfbowling virus alert

• Your account is about to be disconnected…– gets your password!

• IM charge chain letter

• Coca-Cola toilet bowl hoax

• Gas pump HIV hoax

Viruses

• A virus which disrupts or destroys normal computer functioning– often replicates

– some new ones mutate

• Hackers:– highly intelligent

– passive-aggressive

– underachievers

– find cyber vandalism to be amusing

• However, others use viruses for the purpose of doing harm

Viruses Part 2

• Melissa– uses Outlook to send itself to everyone you know--makes E-mail

look innocent

– destroys boot sector, deletes Windows

– David Smith

• Jerusalem– activates every Friday 13th

– deletes all files used that day

• LoveBug– Deletes certain types of files

– Linked to Manila

Trojan Horses

• Appears like valid executable file

• Contains hidden code which does damage– may upload saved passwords, credit card numbers

– may display objectionable graphics

– may destroy files

• Web-site links– may lead you to bogus web-sites which provide information to site

user that will give them access to your accounts

– may appear in junk e-mail as potentially interesting (though typically porn or get rich quick) links

Protections from viruses and THs

• Do not open e-mail from unknown sources– Certainly do not follow links!– Do not download files!

• Keep updated virus scans open• Be suspicious of language which seems “canned”