White-collar crime refers to offenses such as tax evasion, misuse of public funds, embezzlement, fraud and abuse of power. Its perpetrators are most often members of the social elite who have positions of influence in business and government. The term “white-collar crime” was first popularized in 1940 by criminologist Edwin H. Sutherland.
However, the phenomenon first became prominent in the American consciousness in the early 1970s, when President Richard M. Nixon was forced to resign amid allegations that he had abused his presidential power to cover up his involvement in the Watergate scandal.
The legal system has traditionally been lenient in its punishment of white-collar criminals, while penalties for crimes like burglary, drug dealing and murder have grown increasingly stringent since the Second World War. This trend has reinforced class divisions between white-collar and traditional criminals, who often come from poor backgrounds.
Authorities have grown more vigilant in their prosecution of white-collar offenders since a wave of highly publicized cases in the 1980s and early 1990s. Successful Wall Street traders Ivan Boesky and Michael Milken paid millions of dollars in fines and served substantial prison terms during this period for their involvement in illegal insider trading on the stock market. White-collar crime also played a role in the financial collapse of the savings and loan industry. Banking executive Charles H. Keating, Jr., whose institution was one of about 700 that went bankrupt, was prosecuted and jailed for defrauding his customers by persuading them to make high-risk investments in his bank’s parent company. Several US senators who had received large contributions from Keating were reprimanded for ethics violations after a Senate investigation found that they had lobbied federal regulators on Keating’s behalf. The federal government’s ultimate decision to help rescue the savings and loan industry with $130 million in federal funds (as of the end of 1996) angered many taxpayers. They accused the government of protecting the interests of wealthy business people at the expense of average citizens.
The federal government focused increasing attention in the 1990s on its own victimization by white-collar criminals. Growing numbers of businesses and individuals have faced prosecution for defrauding government agencies. Financial abuses have been especially prevalent in the federal Medicare and Medicaid entitlement programs.
All forms of white-collar crime expanded in scope in the 1990s as perpetrators began to use the Internet and the World Wide Web as tools for corporate espionage and other illegal business practices.
- Part of Speech: noun
- Industry/Domain: Culture
- Category: American culture
- Company: Routledge
Creator
- Aaron J
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(Manila, Philippines)