While the term corporate crime doesn’t conjure up the disturbingly threatening image of a man being robbed at gun point, the truth is that society loses more from corporate criminals than street criminals each year. Corporate crime isn’t just about the billions of dollars that are swindled and stolen, but also the many deaths and illnesses which are results of poor or unsafe working conditions. The FBI reports that around 19,000 Americans are murdered each year. But they do not mention the 56,000 Americans who die on the job from accidents which could have potentially been prevented if corporate leaders were forced to put the safety of their employees before cutting costs and turning profits. The lack of accountability has led to a rise of corporate criminals starting as far back as the industrial revolution. While corporate criminals may not think their actions are hurting anyone besides a few executives, in truth their dodgy profits hurt all American consumers. When corporations lose money because of corporate crime, the burden is passed along to Americans through the increased cost of products and goods sold.
What is Corporate Crime?
Corporate crime, sometimes referred to as white collar crime, was defined by in 1939 by criminologist Edwin Sutherland as a crime “committed by a person of respectability and high social status in the course of his occupation.” Common examples of such crimes include:
- Falsifying information on financial statements
- Manipulating the stock market
- Bribery of public officials
- False claims in advertising
- Damage caused to the environment due to negligence
How do they get away with it?
Corporate crime is particularly difficult to spot and stop for many reasons. Unlike street crime, corporate crime is a very private action, occurring in a home or office where there aren’t usually witnesses. Many of the crimes involve a high level comprehension of finances, the stock market, trading, and other specialized subjects, which most FBI and law professionals don’t fully understand. Even if a white collar criminal is caught, it can be difficult to prove whether or not they committed the accused crime knowingly, menacingly, or recklessly, or if it was simply a side effect of the person’s position. Plus, it is simply difficult to apply criminal law principles to corporate crimes, and big corporations which do get called into court often have the funds to defend themselves in a way most people cannot.
Who are the Corporate Criminals?
Corporate crimes are being committed on large and small scales every day. While many white collar criminals will not get caught, in the last decade the government and private citizen groups have rallied together to better protect American citizens from such criminals through legislation, punishment, and accountability. Here are some examples of corporate criminals from the past few decades.
Falsified Financials and Accounting Fraud – Enron: Enron, an American energy company, was revealed to have hid billions of dollars in debt from stockholders through accounting loopholes and falsified financial statements. In 2001, the company went bankrupt and stockholders lost $11 billion dollars. The Enron stock plummeted from $90 per share in 2000 to $1.00 per share by the end of 2001. A handful of Enron executives were indicted and some went to prison.
Environmental – Exxon Corporation and Exxon Shipping: In 1991, Exxon was responsible for approximately 11 million gallons of oil spilled near the Alaska shoreline. Wildlife was killed, thousands of Native Americans lost their way of life, and Exxon was criminally fined $110 million for the damage.
Fraud – Damon Clinical Laboratories: Damon Clinical Laborites chose to improve their falling profits by scamming Medicare. The company was charged with sending in false claims to U.S. Medicare and was fined $35.2 million.
Antitrust – Pfizer Inc.: In 1999, the pharmaceutical drug company Pfizer had to pay $20 million in fines for conspiring to price fix certain ingredients in the food market. It has been estimated that this scandal negatively affected $65 million worth of American commerce.
Illegal Exports – IBM East Europe/Asia Ltd.: In 1998, a branch of IBM was charged with exporting computers to a Russian nuclear lab that was believed to be testing, constructing, and maintaining nuclear explosives. The fine was $8.5 million.