If we will conduct an interview in Canada asking the people on whom they think should be meted the harsher penalty, a person who robs a bank or a person who commits computer fraud. The answer we will most probably elicit from most of the people is that the bank robber should be meted the harsher penalty. This perhaps highlights the Canadian society’s problem with white-collar crimes.
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The term white-collar crime was coined in 1939 by Edwin Sutherland in a speech delivered to the American Sociological Society. He initially defined the term as “a crime committed by a person of respectability and high social status in the course of his occupation.” (“White-collar crime”) Today, the term refers to a wide variety of non-violent crimes usually involving large corporations for the purpose of economic and financial gain. White-collar crime involves two kinds of crime: a) occupational crime and b) corporate crime. (Laureen Snider) Occupational crime refers to offenses committed against legitimate institutions by persons of high social status. This may include the act of a member of Board of Director stealing thousands of dollars from his corporation or the act of a taxpayer who manages to avoid paying taxes. On the other hand, Corporate Crime refers to offenses committed by legitimate institutions for the purpose of furthering their own interest. This may include the act of a corporation in selling drugs which did not pass the standards of proper government agencies, or the act of a corporation in advertising a product as having a particular quality where in fact it does not have the said quality, or the act of a corporation in making use of telephone for the purpose of depriving victims dishonestly of their money or property.
Among the most common white-collar crimes being committed are: antitrust violations, computer/internet fraud, credit card fraud, phone/telemarketing fraud, bankruptcy fraud, healthcare fraud, environmental law violations, insurance fraud, mail fraud, government fraud, tax evasion, financial fraud, securities fraud, insider trading, bribery, kickbacks, counterfeiting, public corruption, money laundering, embezzlement, economic espionage, and trade secret theft. (“White-collar crime”)
Studies show that there is an alarming increase in white-collar crimes being committed and that more and more people fall victims to these illegal activities. Ernst & Young estimated that white-collar crime was costing Canadians $20-billion a year in increased taxes and prices for goods and services. (Donald Gutstein) This only means that the money which should have been earned by the government is being lost to white-collar criminals. To offset this, the government will have to impose this burden to the taxpayers.
In America, statistics estimated that white-collar and corporate crime accounted for $10 for every one dollar lost to robbery, burglary, larceny and auto theft combined. (Donal Gutstein) In a report of the US-Canada Working Group to US President Bill Clinton and Prime Minister Jean Chretien, it declared that Telemarketing Fraud, both in US and in Canada, is a very serious economic crime which costs US and Canadian citizen as much as $40 Billion dollar per year. (“US and Canada Label Telemarketing Fraud Serious Economic Crime and Propose Recommendations to Fight Growing Problem.”)
This essay aims to focus on white-collar crimes and its impact in Canada. I aim to discuss the reasons why white-collar crimes are prevalent in Canada and why Canada is becoming a haven for white-collar criminals. Possible solutions and recommendations on how Canadian people should control is problem will also be suggested at the concluding part of this paper.
Canada can be considered as a prosperous country. It has a strong financial system, stable inflation and a robust economy. The political structure is also stable. This is the reason why Canada is slowly becoming a haven for white-collar criminals. In Canada, the society’s perception over white-collar crime is different from their perception over blue-collar crime. There is excessive focus on stopping blue-collar crimes as compared to white-collar crimes. It bears stressing that the social and economic impact of white-collar crime is more serious and more damaging to our country than blue-collar crimes. Despite the immensity of Canada’s problem on White-collar crimes, it is depressing that there has not been any concrete and adequate response on this issue. The present problem confronting Canada on white-collar crimes can in fact be attributed to the excessive public, judicial and political preoccupation and emphasis on blue-collar crimes.
The first problem is that white-collar crimes are very complex. (Neal Conan). Unlike an ordinary crime such as murder, one can easily understand that a crime has been committed. When a person is killed, there is murder or manslaughter. When a person’s properties are stolen, a crime of robbery is committed. On the other hand, white-collar crimes such as credit card fraud or health care fraud, telemarketing fraud are quite difficult to understand. Most the time the people involved do not have an idea that they have been actually victimized. Further, even if the people know that a white-collar crime has been committed, oftentimes they do not know which agency to contact and report to for assistance. (Richard Johnston).
The perception of the public about white-collar crimes has also affected our fight against white-collar crimes. The public thinks that white-collar crimes do not affect them since it only involves big corporations and the government. They overlook the fact that the entire economy is affected when white-collar crimes become uncontrollable. They neglect to consider that the burden is indirectly imposed upon them. Further, white collar crimes just do not seem to interest the public. They are more concerned with the drama and emotions associated with violent crimes.
It is not only the Canadian citizens who are illiterate on the matter of white-collar crimes. The judiciary has likewise contributed to this sluggish response to combat white-collar crimes. The treatment of our judges and magistrates on white-collar criminal offenders are more lenient as compared to blue-collar criminal offenders. Studies show that the former are less likely to be imprisoned or even if they are imprisoned they more likely to receive lower average sentences.
The media is also a guilty of contributing to our country’s listless response against white-collar criminals. The media is an important institution in every society. They have a responsibility to inform and educate the public about the seriousness and evils of white-collar crimes. Their job is to expose to the public and make them understand that white-collar crimes do not only affect the affluent but they also affect the middle-class and lower-class Canadians. However, it seems that the media is not performing their solemn obligation to the Canadian public. Research shows that the Canadian new media give more emphasis on violent crimes. A study was conducted among the leading newspapers in Canada, Vancouver Sun, Vancouver Province, Globe and Mail and Toronto Star, to determine if it is true that the Vancouver Sun’s coverage of white-collar crime is lower than other papers. It revealed that though Vancouver Sun has admitted that its coverage of white-collar crimes is diminishing, the other papers’ coverage were even lower than Vancouver Sun’s coverage of white-collar crimes.
White-collar crimes are indeed a serious problem not just of a particular country but other countries as well. It bears stressing that because of the sophistication of technology and the changes brought about by globalization, crimes such as white-collar crimes can be committed across different borders. These criminals can also escape detection by transferring their field of operations from one border to another or from one country to another. Consider for example telemarketing fraud which is becoming a concern not just for Canada but the United States as well. Telemarketing firms in Canada are able to defraud and steal hundreds of thousands of dollars from citizens of other countries through the use of telephone alone. This emphasizes that the problem of white-collar crime is not simply a problem of a single country rather it is a problem of other countries as well.
The most important solution to the problem of white-collar crime is for the public to change its perceptions about white-collar crimes. Since the public image of white-collar criminals as those people in suits and of high social status, the public consider them as harmless individuals and that white-collar crimes have no effect on them. The public must change their perception about these crimes. The public must realize that these crimes affect each and everyone of us. Thus, information campaigns must be prioritized so that the public may finally understand the evil effects of these crimes.
Another way of combating white-collar crimes is to pass laws making the penalty for its commission harsher. It bears stressing that one reason why these criminals are not afraid of committing these crimes is because it is a profitable business venture involving millions of dollars. Once convicted, our laws merely impose upon these the short-term imprisonment and small fines. If they are wise enough to compute the gains of engaging in this unlawful trade, the advantages of committing the crime still outweighs the disadvantages. The role of the lawmakers in the fight against white-collar crime is crucial. By imposing harsher penalties, the government, in effect, communicates that it is serious in its fight and sends signal to the criminals that their days are numbered.
The Judiciary must also be involved in this fight against white-collar criminals. No matter how we want to punish the white-collar criminals by amending laws, we have to contend with the reality that our justice system is already clogged with cases involving violent crimes. Those criminals convicted of blue-collar crimes alone have made our prison cells crowded to the point that they can no longer admit those convicted of white-collar criminals. The usual reaction therefore is merely to impose fines to these convicted of white-collar crimes. Further, it is also a reality that most of our judges are not familiar with how white-collar crimes are being committed. The sophistication and use of state of the art technology by white-collar criminals may be beyond the comprehension of some of our magistrates and judges who are trained mostly in the traditional criminal law, civil law and labor law. They may have difficulty in understanding and detecting these crimes. Judges must therefore be educated and trained about the modern forms of the commission of these crimes. They must understand the nature of all the white-collar crimes being committed nowadays and they must be made aware about the deleterious effect of white-collar crimes on our economy. When the awareness about white-collar crimes have increased it becomes easier for judges to impose harsher and stricter penalties. It becomes easier for judges to become creative in the sanctions that they will impose against the white-collar criminals. Thus, the 1999 case of World Media Brokers will be avoided. In the case of World Media Brokers, a Toronto-based telemarketing firm which was convicted of illegally selling Canadian lottery tickets to Americans, the court penalized it with a measly fine of $80,000. The said sum was a very small amount compared to what it was able to steal from the Americans.
The fight against crime is not the sole responsibility of the government. The improvements in the justice system and in the laws penalizing white-collar criminals will not be as effective without the participation of the private sector. The best solution, and also the most cost-effective solution, to the problem of white-collar criminal is prevention. The private sectors themselves must respond to these challenges by ensuring that their corporations do not fall victims to these criminals. Today, some banks in Canada have made initiatives in protecting themselves against white-collar crimes, such as counterfeiting syndicates, by developing their own National Counterfeit Enforcement Strategy and the Integrated Counterfeit Enforcement Teams (ICET).
Cooperation between or among countries could also be an effective solution on this problem. It bears stressing that because of sophisticated tools crimes may be committed from one border to another making it difficult for government agencies to implement their orders. Though some government agencies may have been given respective powers by their own state to determine whether violations of law have been committed, the said powers are exercisable only within a particular jurisdiction. This means that even if there is a finding of violation of law and there is an order to enjoin the illegal activities and to freeze the assets of those found guilty of white-collar criminals, jurisdictional limitations operate to limit this authority. Thus, injunction orders issued by Canadian court cannot be carried out and implemented in the United States. The only solution to this problem is for different countries to build alliances for them to effectively combat crime. In 1997, President Bill Clinton and Prime Minister Chretien met and agreed about the seriousness of telemarketing fraud in both their countries. They instructed their officials to prepare a joint study examining the strategies by which both countries could counter the serious and growing problem of cross-border telemarketing fraud. It bears stressing that these alliances will help in extraditing criminals back to their own country for the purpose of enforcing the penalty. No single government or organization can solve this problem. To wage an effective campaign against white-collar crimes a sound and effective strategy between different countries must be developed.
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