...9/29/2016 White Collar Crime Edwin Sutherland was a very well known person in the the 1930’s, he is known for having many different theories about criminology. However, one of his most well known events in his life was when he coined the term “white collar crime” in 1939. He defined white collar crime as "a crime committed by a person of respectability and high social status in the course of his occupation". Sutherland published four books while he was at Indiana University and one being the censored first edition of White Collar Crime in 1949. This book is known as his masterpiece, and his thoughts about white collar crime spread very fast and became a national topic that was talked about. Sutterfield influenced many people and got many more people thinking and investigating for white collar crimes....
Words: 609 - Pages: 3
...Bernard Lawrence ‘Bernie” Madoff Valerie Correa Prof. Masheika E. Allen BUS 100 Mini Session 10/26/2010 1. Describe three types of illegal business behavior alleged against Mr. Madoff and for each type of behavior, explain how the behavior is illegal or unethical in the conduct of business. Mr. Madoff was found guilty of white collar crimes. Some of the crimes he was found guilty of were money laundering, perjury and securities fraud. Description: Securities fraud is one of many white collar crimes which violate trading laws. The definition of security encompasses many things including stocks, bonds, commodities and other investments. Money laundering is money obtained from criminal activity as a white collar crime is and have it appear as it originated from a legitimate source. Money laundering laws were enacted to take the profit out of criminal activity. Perjury is known as lying under oath. It is the deliberate, willful giving of false, misleading or incomplete testimony under oath. Mr. Madoff, who is allegedly lost $50 billion in investor money in histories largest documented Ponzi scheme, He plead guilty for stealing vast sums of dollars from individuals and organizations, some of them charitable, by taking their money and pretending to invest it in the stock market, when in actuality he used the...
Words: 1262 - Pages: 6
...The Fraud of the Century: The Case of Bernard Madoff The fraud perpetrated by Bernard Madoff which was discovered in December, 2008 is based upon a Ponzi scheme. Madoff took money from new investors to pay earnings for existing customers. The greater the payout to retiring and withdrawing customer, the more revenue or clients he would need to start and “investment relationship” with Madoff. The Ponzi scheme was named after Charles Ponzi who in the early 20th Century, saw a way to profit from international reply coupons. International reply coupons were a guarantee of return postage in response to an international letter. Charles Ponzi determined that he could make money, legally, by swapping out these coupons for more expensive postage stamps in countries where the stamps were of higher value. While making a significant profit with this system, Ponzi got the idea of enticing investors to provide him more capital to trade coupons for higher priced postage stamps. His promise to investors was a 50% profit in a few days. Touted as a financial wizard and the ‘Warren Buffet’ of his day, Ponzi lived outside Boston, he had a fairly opulent life bringing in as much as $250,000/day. Part of Ponzi’s success came from is personal charisma and ability to con even savvy investors. The promised payout was supported by the new investors anxious to take advantage of these robust returns because he appeared to create an image of power, trust, and responsibility. In July of 1920...
Words: 4737 - Pages: 19
...The Fraud of the Century: The Case of Bernard Madoff The fraud perpetrated by Bernard Madoff which was discovered in December, 2008 is based upon a Ponzi scheme. Madoff took money from new investors to pay earnings for existing customers. The greater the payout to retiring and withdrawing customer, the more revenue or clients he would need to start and “investment relationship” with Madoff. The Ponzi scheme was named after Charles Ponzi who in the early 20th Century, saw a way to profit from international reply coupons. International reply coupons were a guarantee of return postage in response to an international letter. Charles Ponzi determined that he could make money, legally, by swapping out these coupons for more expensive postage stamps in countries where the stamps were of higher value. While making a significant profit with this system, Ponzi got the idea of enticing investors to provide him more capital to trade coupons for higher priced postage stamps. His promise to investors was a 50% profit in a few days. Touted as a financial wizard and the ‘Warren Buffet’ of his day, Ponzi lived outside Boston, he had a fairly opulent life bringing in as much as $250,000/day. Part of Ponzi’s success came from is personal charisma and ability to con even savvy investors. The promised payout was supported by the new investors anxious to take advantage of these robust returns because he appeared to create an image of power, trust, and responsibility. In July of 1920...
Words: 4307 - Pages: 18
...appearance that the investments of the initial participants dramatically increase in value in a short amount of time. These types of financial schemes promise investors large interest returns if they provide money as a loan. As more new investors participate, the money that is contributed by later investors is paid to the initial investors, allegedly at the promised interest on their loans. This method works initially, but will then fold as more investors participate and choose to take withdrawals. Though these types of schemes have happened before, the first of this caliber was documented in the 1920’s by its namesake, Charles Ponzi. In 2008, Bernard “Bernie” Madoff was exposed for running the largest Ponzi scheme to date, conning investors out of over $65 billion over thirty years. INTRODUCTION Bernard Madoff was responsible for the largest reported Ponzi scheme in history. How did this happen? Who else knew about it? Why did it take so long for him to be exposed? This paper will endeavor to answer all of those questions and more. This paper will offer dialogue into how Madoff’s scheme differed from a traditional Ponzi scheme and understand the ethical, emotional and financial fallout to those closest to him. It is also important to understand the psychology involved in those who choose to construct a financial scheme. I will also provide some discussion around the issues concerning the SEC and how they...
Words: 4034 - Pages: 17
...examples where a forensic accountant played an important role in aiding attorneys in presenting fraudulent bookkeeping records of company’s who ultimately committed white-collar crimes. Have you ever heard the figure of speech a “needle in a haystack” when referring to finding a small object in a large setting? The task of performing a very detailed search seems impossible. Leaving no stone unturned and demanding hours and hours of mental and manual labor. This is what a forensic accountant faces. By definition, a forensic investigation of any kind is conducted with the purpose of obtaining evidence that will be used in a court case. Forensic accounting is simply the analysis of financial documents use as tax returns, bank statements, canceled checks and the like, in search of proof of a criminal act, be it tax evasion, running numbers, embezzlement, money laundering, fraud by wire or securities fraud (DiGabriele, 2009). These crimes exists for the sole purpose of illegally making money. Leaving a paper trail pointing to criminal activity producing money coming into and leaving the organization. This is one reason the demand for forensic accountants or becoming more mainstream. Once used only by governmental agencies only like the IRS and the CIA to investigate and exposed the most unmoral crimes. More and more corporations are hiring forensic accountants. Some are even developing departments within the company for added security in return making a paradigm...
Words: 2760 - Pages: 12
...White Collar Crime – presented by Mr. Neil Weinberg Mr. Neil Weinberg, Executive Editor of Forbes Magazine, wrote “Stolen Without A Gun” with co-author Walter Pavlo, using the compelling personal story of Mr. Pavlo to portray in intimate detail the pressures that white-collar professionals face every day in corporate world. Mr. Weinberg’s discussion at Rotman was extremely relevant to MBA students because of the main narrator’s background: Pavlo was a young MBA who had a promising career at MCI until he took the wrong step on a mud slide of accounting scams that ultimately cost him not only his career but also his freedom, family, reputation and self-respect. According to Weinberg’s research, white-collar criminals are not just ordinary people; they are smart, well-educated and ambitious. They often start as wide-eye fresh graduates at large corporations of which profit-driven culture infiltrates all levels within. Some of them were even chosen as CFOs of the year: Andrew Fastow (Enron) and Scott D. Sullivan (Worldcom). So why do they turn out to be the thieves stealing from the economy $2.5 trillion per year? Weinberg argues that these people, like Pavlo, do not just wake up one day and decide to commit in a greed-inspired fraud. In fact, only 7% of perpetrators have prior conviction. They operate business under the performance pressure from investors, stockholders and Wall Street professionals. They execute mega mergers which present opportunities for companies to hide flaws...
Words: 785 - Pages: 4
...role, but many believe that we should be more attentive to the role that class plays in targeting and the sentencing process in the criminal justice system. In order to understand the role that class plays in the sentencing process, we must, first, look at the role that it plays before the criminal reaches the day of sentencing. There are a plethora of publications that speak on profiling and actuarial methods which get people into the system. Though these are two large proponents of the discriminatory acts that exist within the confines of the criminal justice system, it does not begin with these institutionalized methods. The first instances of discrimination, which leads to all of the other forms within the system, are the laws and crime control policies that are implemented that, in some instances, are set up in favor of the rich and in opposition to the poor. In Marxist criminology, one of the fundamental principles is that the “ruling class” puts all of the other classes at a disadvantage. This is done...
Words: 4368 - Pages: 18
...but I believe that there needs to be more attention paid to the role that class plays in targeting and the sentencing process in the criminal justice system. In order to understand the role that class plays in the sentencing process, we must, first, look at the role that it plays before the criminal reaches the day of sentencing. There are a plethora of publications that speak on profiling and actuarial methods which get people into the system. Though these are two large proponents of the discriminatory acts that exist within the confines of the criminal justice system, it does not begin with these institutionalized methods. The first instance of discrimination, which leads to all of the other forms within the system, are the laws and crime control policies that are implemented that, in some instances, are set up...
Words: 4385 - Pages: 18
...side business that he started to manage investments for family and friends. Through word of mouth, he began attraction outside investors and Bernard L. Madoff Investment Securities was formed. However, a few people were not fooled and saw the danger behind the facade. A few people heeded the warning sign that were evident all around Madoff. They filed reports with the SEC on several occasions but they were too inexperienced to look deeper. In the end the story holds us not because of the engrossing details of the scam, but because of its human element. Madoff emerges here not as some master criminal, but as a sad man who sad man of weak character who committed one of the crimes of the century, instead of simply telling the truth. His story is not the story of ridiculous greed but more the picture of our unlimited aptitude for self-delusion. Bernard L. Madoff was arrested in December 2008 for defrauding thousands of individuals and organizations of billions of dollars for over two decades. The part of Madoff’s investment advisory company involved in private-investment or assess-management was where all of his illicit activities were carried out. In fact, most employees had no ideal he was stealing from his clients. Madoff had perpetrated an outsized Ponzi scheme, a Brobdingnagian con game (Lewis, 2012). In March 2009, Madoff pleaded guilty of soliciting funds to buy securities and failing to invest the money. He used the money instead, as did the notorious Charles...
Words: 2162 - Pages: 9
...Bernie Madoff It seems like they all start the same – with Secrets and Lies. With secrets and all the don’t tell anyone because it is exclusive talk - that’s the stuff that makes soap operas, scandals and the greatest ponzi schemes. Everyone likes feeling like they have a great opportunity that not everyone gets to have and that it is exclusive, especially when it feeds their financial greed. Those are the ingredients that helped Bernie Madoff build the biggest Ponzi investment scheme in history. Madoff maintains that he never meant for it to be anything more than him investing for close friends and family however the secrecy and not accepting just anyone are part of what made so many people want to be a part, thereby becoming one of the best marketing tactics ever. The first question I wanted to know was who is this man that earned the respect of some of the biggest names on Wall Street, the trust of friends, family and strangers and where did he come from? • Start of firm senior in college The firm that Madoff started in 1960 with the $5,000 he saved was a trading business that specialized in the trading of penny stocks – Continued to earn money as a life guard and landscaper until his business took off • Bernard Madoff is a former financier, American hedge-fund investment manager, chairman of the NASDAQ (National Association of Securities Dealers Automated Quotations) stock exchange, and chairman of the firm Bernard L. Madoff Investment...
Words: 3426 - Pages: 14
...the Sarbanes-Oxley Act was born. In 2002 Sarbanes-Oxley Act was created by Senator Paul Sarbanes and Representative Michael Oxley. Several large company failures not only sparked the public on fraud activity, but also these two gentlemen who decided to put into place something that would enforce financial honesty in businesses. There are several layers to the Sarbanes-Oxley Act. ,For example section 404 requires companies to have internal control report with their annual audits. This section of Sarbanes-Oxley also puts accountability and personal liability on the accounting teams of the companies. The infamous Enron scandal unraveled itself in 2001. Enron marketed gas and electricity among other public utilities. They were the 6th largest energy company in the world. In addition, they also provided financial and risk management services to customers all over the globe. Enron was established in 1985 and by 2000 they made the Fortune 500 list. In 2001 after some internal accounting concerns, Enron...
Words: 1439 - Pages: 6
...there are business leaders and philosophers that object to the belief or need of exhausting time, money or resources for the welfare of its people, be it consumers or employees, data indicates that those who do recognize their noblesse oblige will prosper (BP, pg 149). Practicing ethical business operations has been a talked about subject since the eighteenth and nineteenth centuries. Whether it is sustainability or social responsibility, approaches to business ethics have yet to be standardized. At the peak of today’s ethical environmental dilemmas stands Monsanto, the organization that prides itself on the ability to create sustainable agriculture. There are also scandals with regard to scrupulous or fraudulent investors, such as Bernard Madoff, who prosper at the expense of trusting individuals. Lending institutions have also taken advantage of the financially ill-informed consumers who have lost their homes and in some cases their families and lives as a result of subprime lending practices (cite). Toyota, who was once known as one of the world’s fastest growing auto makers (cite) deliberately ignored the safety of its consumers in effort to continue maximizing its profits. Organizations lacking business morals must understand that responsibility does not rest on one source, but rather it should be a collaborative effort between the companies, governments, and individuals (Business Ethics). Until standardized practices are followed at home and abroad, leaders will continue...
Words: 5512 - Pages: 23
...University of New Hampshire University of New Hampshire Scholars' Repository Honors Theses Student Scholarship Fall 2012 An Analysis of Fraud: Causes, Prevention, and Notable Cases Kristin A. Kennedy University of New Hampshire - Main Campus, kaj79@wildcats.unh.edu Follow this and additional works at: http://scholars.unh.edu/honors Part of the Accounting Commons Recommended Citation Kennedy, Kristin A., "An Analysis of Fraud: Causes, Prevention, and Notable Cases" (2012). Honors Theses. Paper 100. This Senior Honors Thesis is brought to you for free and open access by the Student Scholarship at University of New Hampshire Scholars' Repository. It has been accepted for inclusion in Honors Theses by an authorized administrator of University of New Hampshire Scholars' Repository. For more information, please contact scholarly.communication@unh.edu. An Analysis of Fraud: Causes, Prevention, and Notable Cases University of New Hampshire Honors Thesis in Accounting Kristin Kennedy ADMN 799 Professor Le (Emily) Xu Fall 2012 Table of Contents I. II. III. IV. V. VI. VII. Background……………………………………………………………........1 a. What is accounting and what role does financial reporting serve?..........1 b. History of accounting standards………………………………………..2 c. Role of auditing………………………………………………………...5 Fraud……………………………………………………………………….6 a. Two types of fraud……………………………………………………..6 i. Misappropriation of Assets…………………………………….7 ii. Misrepresentation of Financial Statements…………………….7 b. Fraud...
Words: 14962 - Pages: 60
...Homework: Term Paper GEB2430 Business Ethics & Social Responsibility Dr. Harvey Weiss June 16th, 2012 Abstract The main purpose of this research paper is to show how the Sarbanes-Oxley Act of 2002 may have contributed to holding corporate executives accountable for their actions then and for the future. This research paper will examine and discuss the origin of the Sarbanes-Oxley Act and go into detail regarding the eleven titles, or sections, of the document that it consists of. This research paper will then touch upon the different countries around the world that have been subsequently enacted with the Sarbanes-Oxley Act and conclude with the debates over the perceived benefits and costs from both opponents and proponents. The following research paper will prove to be useful for any executive running a public corporation. After reading this research paper, one will come to discover and understand the new standards implemented for corporate accountability as well as the new penalties for acts of wrongdoing. Body The Sarbanes–Oxley Act of 2002, also known as the “Public Company Accounting Reform and Investor Protection Act” by the Senate and “Corporate and Auditing Accountability and Responsibility Act” by the House of Representatives and commonly called Sarbanes–Oxley, Sarbox or SOX, is a United States federal law passed on July 30, 2002, which set new or enhanced standards for all United States public company boards, management and public accounting firms. It...
Words: 2565 - Pages: 11
