Corporate Crime Essay Example

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    Law
  • Document type:
    Essay
  • Level:
    Undergraduate
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5Corporate Crime

Corporate Crime

Introduction

Corporate crime is a kind of white-collar crime. It is a criminal activity committed by individuals of high social respectability and status who misuse their position as a chance to commit crime. Stealing money from a company is a topic corporate crime within Australian companies. Huge sums of money have been lost and companies forced to close shop due to corporate crime. Corporate crimes continue to be witnessed in the world and reported in news media. Corporate crime has consequences as well as motivations (Croall, 2005). Corporate crime occurs within an organizational setting. Corporate crime has a long history and is yet to go away. This essay recent corporate crime while looking at motives behind it as well as consequences suffered.

There have been reported cases of corporate crime in media. Recently a bookkeeper with the logistic group TZ limited was sentenced to prison after pleading guilty to a case where he made false entries in the company’s books. The entries were worth close to $130,000. This is another case of financial fraud in the corporate sector in Australia. Mr. Fagredin was an employed bookkeeper at the company when he recorded payments totaling to $130,000 paid to himself from October 2007 to January 2009. The culprit was to enter in ‘self-recognizance’ in bits of $2000 given his guilty plea. He entered into a repayment arrangement with TZ Limited whereas the offence had an impact on his registration. This case happened amidst allegations being investigated by ASIC that former directors of TZ Limited had misappropriated millions of company’s funds. A contractor bookkeeper for a group of direct sales companies referred to as Comunicom Group channeled $891,000 into her possession (Friedrichs, 2009).  The bookkeeper used the money to pay back gambling debts of her mother and on luxury goods. When previously confronted with the accusations the bookkeeper told the business owner to improve his business practices but she had stolen the money.

Consequences of corporate crime

Corporate crimes have serious implications on the part of the perpetrator and the company. The company suffers negative publicity and prospective shareholders will think twice before coming to invest in the company (Croall, 2007). If TZ Limited and Comunicom Group were trading on the stock market, their share prices would have been affected negatively since they become less attractive to investors who wait for the debacle to be cleared. Corporate crime automatically leads to loss of money by the company ((Wells, 2001). Comunicom Group lost $891,000 while TZ Limited lost $130,000 to unscrupulous bookkeeper. The progress of the company is seriously impaired by the corporate crime. The culprit obvious faces the imminence of a jail sentence and the automatic dismissal from his place of work (Clinard & Yeager, 2005). Therefore, the company can lose a good worker due to criminal behavior. TZ Limited bookkeeper had an arrangement to pay back the money he had looted from the company. The second bookkeeper did not have an arrangement to pay back the company considering its large sum.

Motivation for corporate crime

The first motivation for committing a corporate crime is the opportunity or the chance to commit the crime. The perpetrators of the corporate crime were presented by an opportunity that they did not resist from using (Tombs & Whyte, 2006). This opportunity may include a chance to circumvent accounting standards and fraudulently make payments into private accounts. If there was no such a chance the culprits would not have engaged in the crime (Wells, 2001).  Absence of frequent external or internal auditing of accounts can create the opportunity to commit a corporate crime through manipulation of books of accounts. Low pay also can be attributed as a motive behind corporate crime. If the bookkeepers were paid well enough then they would not have engaged in unscrupulous behavior. Some employers pay their accountants peanuts while putting them in charge of colossal amount of money. This is an adequate motivation to engage in fraud (Scarpitti, Nielsen & Miller, 2009). Greed is the third motivation for corporate crime. Some people engage in corporate crime because of greed (Simpson, 2002).  The Comunicom Group bookkeeper used part of the money stolen on luxury goods while also paying off the debt owed by her mother due to her addition in gambling. Some people are never satisfied with what they have and they will always look for an opportunity to have more.

Conclusion

Corporate crime has plagued the business sector for a long time. There are circumstances that propel individuals to engage in corporate crime but some of the issues like personal greed are beyond the control of the company. Both the culprit and the company are affected in case of any corporate crime. The consequences may be limited or gross.

References

Clinard, M. B. & Yeager, P.C. (2005), Corporate Crime, Somerset, NJ: Transaction Publishers.

Croall, H. (2007) ‘White collar crime, consumers and victimization’, in G. Geis and H. Pontell (eds), International Handbook of White Collar Crime, New York: Springer

Croall, H. (2005) ‘White collar crime’, in A. Wardak, and J. Sheptycki (eds), Transnational and Comparative Criminology, Cavendish: Glasshouse Press.

Friedrichs, D. O. (2009). Trusted Criminals: White Collar Crime In Contemporary Society (4 ed.). New York: Wadsworth Publishing.

Scarpitti, F. R., Nielsen, A. L., & Miller, J. M. (2009), A Sociological Theory of Criminal Behavior. Crime and Criminals Contemporary and Classic Readings in Criminology (2 ed., p 211). New York: Oxford University Press.

Simpson, S.S. (2002). Corporate Crime, Law, and Social Control. Cambridge: Cambridge University Press.

Tombs, S. & Whyte, D. (2006b) From the streets to the suites: researching corporate crime, Criminal Justice Matters, 62(6): 24, 25–45

Wells, C. (2001). Corporations and Criminal Responsibility (Second Edition), Oxford: Oxford University Press.