White collar crimes
White collar crimes are crimes that many people do not associate with criminal activity. Yet the cost to the country due to corporate and white collar crime far exceeds that of "street" crime and benefit fraud. White collar crimes refer to crimes that take place within a business or institution and include everything from Tax fraud to health and safety breaches.
Unlike conventional crimes, white collar crime can be committed by an individual, a corporation, an occupation, or an organization. The criminal element of intent has become less important as product liability and other corporate malfeasance have come to be identified as white collar crime.
A questionable clustering of behaviors has resulted in an intermixing of simple deviations from societal norms, breaches of civil law, and criminal violations, thus blurring the line between civil and criminal law. For the purpose of this paper, it is necessary to limit the scope of the term white collar crime.
The genesis of the term is credited to Sociologist Edwin Sutherland in 1939 and simply states that white collar crime is the abuse of power by an individual, situated in a high place, whereby virtue of that position they are provided with opportunities for such abuse. These crimes are extremely difficult to detect for many reasons. One major reason is that many people do not realise a crime is being committed as corporate crime is often seen as a victimless crime. At face value this may seem to be the case but if you look deeper you will see that this is not true. Every year the FBI estimates that 19,000 Americans are murdered every year compared with the 56,000 Americans who die every year from occupational disease such as black lung and asbestosis (Russell Mokhiber 2000). Deaths Caused by corporate crime are also very indirect so it can be very difficult to trace the problem to the corporation.
In our society today, white-collar crime seems be the popular crime of choice. Crimes such as fraud, insider buying, and embezzlement are being committed by individuals of wealth and power on a regular and alarming basis. White-collar criminals are motivated to commit these "victimless" crimes because they can afford to and because they are greedy individuals who want to profit.
The affluent and privileged continue to "get richer" while the rest of society is victimized by their actions. The impact of white-collar crimes on our economy is significant and when these crimes go unpunished, one tends to wonder if our judicial system is paying attention.
One of the recent cases of white collar crime is the case of small South Carolina parts Supplier Company which collect $20.5 million over six years "for fraudulent shipping costs, including $998,798 for sending two 19-cent washers to an Army base in Texas. The company also billed and was paid $455,009 to ship three machine screws costing $1.31 each to Marines in Habbaniyah, Iraq." Taxpayers have given one trillion dollars to Iraq so I guess it's no problem with one million for a 38 cent shipment.
Somebody is a friend of the White House and pocketed 999,996.00 dollars. Yes 4 dollars to mail the two .19 cent each washers by US Post Office mail. That was a laugh on BBC news today and the joke is really the American taxpayers as the World looks at the US Stock Market fall. At lease they know why it's happening. The United States has money to give away. The owners of C&D Distributors in Lexington, South Carolina - twin sisters (Charlene Corley and Darlene Wooten) - exploited a flaw in an automated Defense Department purchasing system: bills for shipping to combat areas or U.S. bases that were labeled "priority" were usually paid automatically, said Cynthia Stroot, a Pentagon investigator.
Charlene Corley and Darlene Wooten fraudulently billed the Pentagon 20.5 million USD over 9 years for shipping and handling costs. Their company, C & D Distributors, also billed, and was paid, 445,640.75 USD for shipping an 8.75 USD plumbing tube-elbow, 492,096 USD for shipping a 10.99 USD threaded machine plug, 455,009 USD to ship three machine screws costing 1.31 USD each and 293,451USD to ship an 89 cent split washer.
A government examination of C&D Distributors' invoices turned up an alleged 499 false shipping invoices for a total cost of 71,611,296.12USD, of which 112 of those invoices were listed as paid. The value of each item shipped rarely reached 100 USD and totaled just 68,000 USD over the nine years in contrast to the 20.5 million USD paid for transportation.
They spent their money on 10 luxury cars, lots of exotic holidays, 4 beach homes, boats, jewelry, plastic surgery and a cookie store. Oh, and they also gave some of the money to charity.
They exploited a flaw in an automated Defense Department purchasing system that was intended to cut red tape and speed up shipments to troops: bills for shipping to high-priority combat areas such as Iraq or American bases were paid automatically.
Like most fraudsters they started out with over-billing small amounts but as time went on and they got away with each fraudulent invoice, they got more aggressive in the amounts they put in. They also created two shell companies, Industrial Building Materials and United Tech, to launder their profits and pay their personal expenses. All their friends, neighbors, and relatives thought the sisters were well respected and hard-working. Some comments were, "I thought they were running a legitimate, successful business", "They're well thought and are well-established in the community", "They were very outgoing people, very forthcoming; had good personalities, good ambitions and business ability."
Darlene has committed suicide and of course Charlene, who is now facing all the charges, says that she didn't know what her dead sister was doing. They have found some other "questionable billing," and they will be implementing stricter procedures. Presumably, the stricter procedures include someone actually reading invoices before making payment.
The fraud was detected by accident when a Pentagon purchasing agent (I wonder if he/she was rewarded or promoted for diligence and honesty) stumbled across an invoice for sending two additional washers (value: 38 cents) for 969,000USD. The agent rejected the bill and found the earlier 998,798USD payment to C&D. these were special washers than had to have FAA approval. They were of topsecret anti-radar material and were machined to extremely close tolerances as needed for cruise missile technology, they are kevlar wound, graphite embedded, close tolerance, gimbal gyro, fluidically balanced, electromagnetically shielded, EMP shielded.