Chapter 4 Test
Getting the Picture
The following selection discusses three types of “non-violent crime” that play significant roles in our lives. They are fraud, high-tech crimes, and white-collar or corporate crime.
Ironically, the death toll from these types of crimes is higher than that of murder. And all of these crimes are exceedingly costly to the public at large in other ways as well.
Brushing Up on Vocabulary bootlegger – Although bootleggers were quite prominent during the prohibition period
(19191933), the term “bootlegger” began to be used in the late 1800s to refer to people who tried to smuggle liquor inside their knee high boots. Today the term applies to anyone who is trying to make, sell, or transport contraband merchandise, especially liquor. white-collar
–
Since the 1920s, this term has been applied to those who work in an office or other professional environment. These clerical workers, managers, and executives traditionally wear suits, white shirts, and ties. The term white-collar crime was coined by Edwin H. Sutherland who defined it as “any non-violent crime committed by a person of respectability and high social status in the course of his occupation.”
Fraud and Corporate Crime
Fraud
1) Fraud is the acquisition of the property of another person through deception.
Deception includes false pretenses, confidence games, check forgery, and illegal credit and cash transactions. Two rapidly growing types of fraud involve auto and health insurance claims. The amount and types of fraud have changed through the years with technological developments. Just as the introduction of checks for the payment of goods and services opened up opportunities for thieves to gain illegitimate financial advantage, so did the introduction of “plastic money.” Major credit card companies report billions of dollars in losses from fraud annually. Stolen, lost, or expired credit cards are now modified with computers and encoding devices so that they appear to be valid. Totally counterfeit credit cards are also fabricated with the help of laser copiers or other duplicating machines. More recently, credit card account numbers are being stolen from the Internet, where credit purchases are now possible. In 2000, the FBI and the White-Collar Crime Center created a national reporting mechanism to track fraud on the Internet by establishing the Internet Fraud Complaint Center (IFCC).
High-tech Crimes
2) In addition to credit card fraud carried out on the Internet, the rise of computers and other high-technology equipment has paved the way for other new types of crime

as well. These crimes present yet another set of challenges for potential victims, law enforcement personnel, and criminal justice professionals. What exactly is hightechnology crime? It is generally agreed that high-tech crime involves an attempt to pursue illegal activities through the use of sophisticated electronic devices
– computers, cellular phones, and other digital communications – that are in common use today. The financial loss associated with computer crimes alone is staggering. In 2004, a small sample (269) of corporations surveyed about cyber crime reported losing over $141,
496, 560.
3) New types of crime include “cyberspying” into competitors’ computer systems to gather proprietary information, the distribution of illegal or illegally obtained images such as child pornography, and video piracy. For example, it is not unusual for a major motion picture to open in movie theaters – and for bootleggers’ videotape versions to appear on the streets the same day.
White-collar and Corporate Crime
4) The conviction of Arthur Andersen, LLP, demonstrates that white-collar crime can be committed by a corporation as well as by an individual. Generally, white-collar crime is defined as a violation of the law committed by a person or group of persons in the course of an otherwise respected and legitimate occupation or business enterprise.
5) Just as white-collar and corporate offenses include a heterogeneous mix of corporate and individual crimes, from fraud, deception, and corruption (as in the S&L case) to pollution of the environment, victims of white-collar crime range from the savvy investor to the unsuspecting consumer. No one person or group is immune. They are committed by individuals or by organizations operating locally, nationally, and internationally. The most notable corporate prosecution in recent years resulted in a conviction that, for all practical purposes, also served as a death sentence. Arthur
Anderson, LLP, was convicted in June 2002, of obstructing justice following its audit of
Enron.
6) White-collar Crime.
As society becomes more complex, the relation of buyer to seller (or of service provider to client) becomes less personal. The anonymity of such relations creates a basis for potential abuse. For example, employees of large organizations may use their authority illegally for private gain, by making their services to the public contingent on bribes, kickbacks, or other favors. Consider the insurance adjuster who doubles the estimate of damage in exchange for half of the insurance payment. Commercial transactions too are hidden in a complex maze. Insider trading is the use of material, nonpublic, financial information to obtain an unfair advantage in trading securities. A person who has access to confidential corporate information may make significant profits by buying or selling stock on the strength of that information.
The prototype case of insider trading was against Dennis Levine. Levine, a 34-year-old managing director of the securities firm formerly known as Drexel Burnham Lambert, used insider information to purchase stock for himself and others in such corporations as International Telephone and Telegraph (ITT), Sperry Corporation, Coastal
Corporation, American National Resources, and McGraw Edison. After the SEC found out, Levine implicated other Wall Street executives – including Ivan Boesky, who had made millions of dollars in illegal profits.

7) Corporate Crime . Corporate crime is defined as a criminal act committed by one or more employees of a corporation that is attributed to the organization itself.
Arthur Andersen and other companies were convicted –as corporations—of a host of criminal law violations. On average between 200 and 350 corporations are convicted each year in federal courts for offenses ranging from tax law violations to environmental crimes. Violation of environmental standards can cause suffering to generations of people who will be exposed to polluted water, toxic air, or the consequences of land exploitation. In 1989, the supertanker Exxon Valdez ran aground in Prince William
Sound, Alaska, spilling 250,000 barrels of oil. The spill became North America’s largest ecological disaster. Among others, the Exxon Corporation was found liable.
(Adler, Freda, et. al., Criminal Justice, 4th ed., New York: McGraw-Hill, 2006, pp. , 54-55, 58-59, 64)
Multiple Choice
1. The author’s main purpose in discussing these three types of crime is to a. persuade the reader to avoid a life of crime. b. show the reader how federal, state, and local agencies have tried to solve these crimes. c. define and explain each of these types of crime and the problems related to them. d. present a case for more federal and local funding to help solve these crimes.
2. Pretenses in paragraph 1 means a. previews b. rewards c. claims d. threats
3. The author explains the word “fraud” to the reader by a. giving a definition of the word b. giving examples of types of fraud c. stating how fraud has changed over the years d. all of the above
4. At the beginning of paragraph 5 the author uses a a. comparison b. contrast c. definition d. classification or division
5. Contingent in paragraph 6 means

a. dependent on b. not related to c. independent from d. detached from
6. In paragraph 7 the author uses which of the following techniques? a. definition b. cause and effect c. example d. all of the above
True or False
_____ 7. The author discusses measures that federal and local agencies can use to
detect the types of crimes being discussed.
_____ 8. Thieves may be able to steal credit card numbers when purchases are
made online.
_____ 9. A credit card can be made to appear valid even after it has expired.
_____10. Proprietary in paragraph 3 means “ownership.”
_____11. Fraud has remained static through the years.
_____12. Credit card fraud results in the loss of billions of dollars.
_____13. Assume that bootlegger tapes of Spiderman appeared the same day the
movie premiered. This would be an example of a high-tech crime.
_____14. As currently defined, white-collar crime can only be committed by an
individual.
_____15. The Exxon Valdez caused ecological damage to Mexico.
Vocabulary in Context
Directions: In the blanks below, write the word from the list that best completes the
sentence. Use each word only once. acquisition anonymity fabricated heterogeneous implicated notable proprietary savvy

illegitimate immune staggering valid
1. The ___________________ cellist Yo- Yo Ma, considered the world’s greatest
living cello player, made a surprise appearance at the concert last night.
2. You must have a ____________________ picture I.D. to board the plane.
3. A ________________________ mix of people from all walks of life came to hear the candidate’s speech on immigration reform.
4. The amount of debt she has accumulated from four years of college is
_________________________.
5. Before his sentencing, he _______________________ three others in the crime.
6. The museum’s new __________________________ was a painting by Picasso.
7. The youthful-looking movie star appears to be ______________________ to the
ravages of time.
8. As a ___________________ investor she has managed to make thousands of
dollars in profit.
9. In order to preserve her _______________________, she wrote the novels under a
different name.
10. He takes a __________________ interest in all of his son’s activities.
11. Late for her curfew, she ___________________ a story about having a flat tire and
running out of gas.
12. The U.S. refused to recognize the dic tator’s ____________________ seizure of
power.
In Your Own Words

1. To what extent do you think white-collar offenders picture themselves as criminals?
Or do you think they just tend to see themselves as “shrewd businesspeople”?
2. Corruption by corporate officials undermines the public trust in business. What are likely repercussions of that lack of trust?
3. Do you think those who commit environmental crimes that directly jeopardize public health or safety should receive more stringent penalties?
4. Do you think that white-collar criminals are treated too leniently? Do you think more effort should be given to sanctioning those who commit these acts?