CHAPTER 1: WHAT IS FIANCIAL ECONOMIC CRIME
INTRODUCTION
Example: 3M – Minnesota Mining and Manufacturing
Company
Digging in Zwijndrecht -> a lot of PFAS in the ground -> negative
impact on health because 3M ignored the regulated amount
- It is NOT a crime, because it is regulated -> regulating
possessing (ex. If it would be drugs, than it would be a
crime)
Example: Panama papers
A women became CEO of 200 letter boxes -> people could transfer
their money to these addresses VAT-free ! -> = investing in /
paying to a fake company to make sure you don’t need to pay
takses
Attention: it is evasion, not avoidance
Tax evasion: make sure you don’t have to pay takses (=
illegal)
Tax avoidance: avoiding takses by using regulated legal
constructions to pay less (= legal)
- Example: establishing an own company and facturing
the university for the work as a professor and than to
your account -> VAT goes from 47% to 25%
Example: Volkswagen
Emission scandal
Example: Marc Coucke
Sold Omega Pharma to Perrigo -> Perrigo said that the bought the
organization for too much money -> Coucke wait that different
pharam’s were sold for the difference in money (the ‘too much’)
but it isn’t -> they brought in a 3th party that where looking what is
possible
Example: L&H – Lernout&Hauspie
2 entrepreneurs devolved speeche technologies -> but:
accountancy frauds – let stakeholders and outsiders belief that
they did better than they did / fake invoicing
DEFINITION
Economic crime
= the intentional use of deceit to deprive another of money,
property, or a legal right
= crime undertaken for economic gain
Financial crime
= crime against property, involving the unlawful conversion of
property belonging to another to one’s own personal use and
benefit
= the use of deception for illegal gain, normally involving breach of
trust, and some concealment of the true nature of the activities
, A lot of definitions of both -> core elements: deception,
abuse of trust, concealment and conspiracy to gain financial
benefit
White collar crime -> has different type of definitions
1) Offender-based definition
2) Offense-based definition
Offender-based definition of white collar crime:
= crime committed by a person of respectability and high social
status in the course of his occupation
3 components: 1) high status / respectability offender; 2) in
course of occupation; 3) violations of criminal,
administrative and civil law
Criticism: too broad, is the focus on the social status useful?
Offense-based definition of white collar crime:
= an illegal act or series of illegal acts committed by non-physical
means and by concealment of guile to obtain money or property, to
avoid the payment or less of money or property, or to obtain
business or personal advantage
= white collar crime is planned or organized illegal acts of
deception or fraud, usually accomplished during the course of
legitimate occupational activity, committed by an individual or
corporate entity
Criticism: no attention to crim that causes physical harm; in
practice often overlooks the crime of the powerful
Why make a difference between offender en offense based
definition?
1) Offense: you might come up with different types of
people who do it -> focus on input, throughput and
output
2) Offender: you might come up with different crime and
persons
Categorisation of offender
Organised crime
= systematically committing crimes which are separately or
together or significant importance, in pursuit of profit or power, by
more than two persons working together, during a relative long or
undetermined period, with a division of tasks (use of commercial
structures, use of violence or intimidation techniques, influence on
,political life, media, public governance, judiciary or corporate life)
- Difference with organisational crime: in organised
crime, they do illegal things as extra (example weapons,
drugs, …) while in organisational crime (more white collar
crime) they work in a legal business
Organisational crime = crime you commit to benefit the
company / organisation
- Corporate crime (legal private organisations) = offenses
committed by corporate officials for their corporation & the
offenses by the corporation itself
- State crime (legal public organisations) -> ex. Gaza vs
Israël
- State-corporate crime = illegal or socially injurious
actions that result from a mutually reinforcing interaction
between (1) policies and/or practices in pursuit of the goals
of one or more institutions of political governance and (2)
policies and/or practices in pursuit of the goals of one or
more institutions of economic production and distribution
State-corporate crime -> examples:
1) Royal Dutch Shell (drilling) where the
Netherlands is a stakeholder -> gas got free ->
environmental pollution -> people were killed,
arrested, … to protect Royal Dutch Shell
2) In the Vietnam War they used Agent Orange to
remove the leaves chemically so they could see the
enemy
Occupational crime
= offenses committed by individuals for themselves in the course
of their occupation & offenses of employers against their
employers
- Using the position to earn the benefit
- Example. Copping the study books for €35 using the
printers of the UGent together with a college
Organised vs organisational crime
Organised crime Organisational crime
Aim: Aim:
- Illegal business - Legal business
- Violence and - No violence /
intimidation intimidation
- Criminal organisations / - Good reputation
criminals offenders
- No trust from society - Breach trust society
- Continuity - Less continuity (?)
, Categorisation type crime
Typology of Gottschalk
Problem: so much
‘fraud’
MEASURING FINANCIAL ECONOMIC CRIME
Why measure financial economic crime?
1) Tracking evaluation of crime over time
2) Describing the structure of criminality
3) Assessing impact law enforcement
4) Assessing impact criminal justice reforms
5) Describing sanctions offenders
How to measure? -> 5 sources of information
1) Law enforcement
2) Research
3) Policy documents
4) Private information
5) Media and NGO’s
Law enforcement
Data / statistics from police, prosecutor, convictions, report or
database of enforces
- Ex. Belgium Financial Intelligence Processing Unit,
inspectorate services
Caveats (kanttekening)
- Only focus on data from police
- Reflects activities, priorities & resources
- High dark number: unaware victims, no direct individual
victim, complex constructions, reluctance to press charges
Research
Victim surveys
- Ex. Survey on white collar crime, monitor criminality
corporate life
Self reports
- Ex. SUBLEC Belgium
INTRODUCTION
Example: 3M – Minnesota Mining and Manufacturing
Company
Digging in Zwijndrecht -> a lot of PFAS in the ground -> negative
impact on health because 3M ignored the regulated amount
- It is NOT a crime, because it is regulated -> regulating
possessing (ex. If it would be drugs, than it would be a
crime)
Example: Panama papers
A women became CEO of 200 letter boxes -> people could transfer
their money to these addresses VAT-free ! -> = investing in /
paying to a fake company to make sure you don’t need to pay
takses
Attention: it is evasion, not avoidance
Tax evasion: make sure you don’t have to pay takses (=
illegal)
Tax avoidance: avoiding takses by using regulated legal
constructions to pay less (= legal)
- Example: establishing an own company and facturing
the university for the work as a professor and than to
your account -> VAT goes from 47% to 25%
Example: Volkswagen
Emission scandal
Example: Marc Coucke
Sold Omega Pharma to Perrigo -> Perrigo said that the bought the
organization for too much money -> Coucke wait that different
pharam’s were sold for the difference in money (the ‘too much’)
but it isn’t -> they brought in a 3th party that where looking what is
possible
Example: L&H – Lernout&Hauspie
2 entrepreneurs devolved speeche technologies -> but:
accountancy frauds – let stakeholders and outsiders belief that
they did better than they did / fake invoicing
DEFINITION
Economic crime
= the intentional use of deceit to deprive another of money,
property, or a legal right
= crime undertaken for economic gain
Financial crime
= crime against property, involving the unlawful conversion of
property belonging to another to one’s own personal use and
benefit
= the use of deception for illegal gain, normally involving breach of
trust, and some concealment of the true nature of the activities
, A lot of definitions of both -> core elements: deception,
abuse of trust, concealment and conspiracy to gain financial
benefit
White collar crime -> has different type of definitions
1) Offender-based definition
2) Offense-based definition
Offender-based definition of white collar crime:
= crime committed by a person of respectability and high social
status in the course of his occupation
3 components: 1) high status / respectability offender; 2) in
course of occupation; 3) violations of criminal,
administrative and civil law
Criticism: too broad, is the focus on the social status useful?
Offense-based definition of white collar crime:
= an illegal act or series of illegal acts committed by non-physical
means and by concealment of guile to obtain money or property, to
avoid the payment or less of money or property, or to obtain
business or personal advantage
= white collar crime is planned or organized illegal acts of
deception or fraud, usually accomplished during the course of
legitimate occupational activity, committed by an individual or
corporate entity
Criticism: no attention to crim that causes physical harm; in
practice often overlooks the crime of the powerful
Why make a difference between offender en offense based
definition?
1) Offense: you might come up with different types of
people who do it -> focus on input, throughput and
output
2) Offender: you might come up with different crime and
persons
Categorisation of offender
Organised crime
= systematically committing crimes which are separately or
together or significant importance, in pursuit of profit or power, by
more than two persons working together, during a relative long or
undetermined period, with a division of tasks (use of commercial
structures, use of violence or intimidation techniques, influence on
,political life, media, public governance, judiciary or corporate life)
- Difference with organisational crime: in organised
crime, they do illegal things as extra (example weapons,
drugs, …) while in organisational crime (more white collar
crime) they work in a legal business
Organisational crime = crime you commit to benefit the
company / organisation
- Corporate crime (legal private organisations) = offenses
committed by corporate officials for their corporation & the
offenses by the corporation itself
- State crime (legal public organisations) -> ex. Gaza vs
Israël
- State-corporate crime = illegal or socially injurious
actions that result from a mutually reinforcing interaction
between (1) policies and/or practices in pursuit of the goals
of one or more institutions of political governance and (2)
policies and/or practices in pursuit of the goals of one or
more institutions of economic production and distribution
State-corporate crime -> examples:
1) Royal Dutch Shell (drilling) where the
Netherlands is a stakeholder -> gas got free ->
environmental pollution -> people were killed,
arrested, … to protect Royal Dutch Shell
2) In the Vietnam War they used Agent Orange to
remove the leaves chemically so they could see the
enemy
Occupational crime
= offenses committed by individuals for themselves in the course
of their occupation & offenses of employers against their
employers
- Using the position to earn the benefit
- Example. Copping the study books for €35 using the
printers of the UGent together with a college
Organised vs organisational crime
Organised crime Organisational crime
Aim: Aim:
- Illegal business - Legal business
- Violence and - No violence /
intimidation intimidation
- Criminal organisations / - Good reputation
criminals offenders
- No trust from society - Breach trust society
- Continuity - Less continuity (?)
, Categorisation type crime
Typology of Gottschalk
Problem: so much
‘fraud’
MEASURING FINANCIAL ECONOMIC CRIME
Why measure financial economic crime?
1) Tracking evaluation of crime over time
2) Describing the structure of criminality
3) Assessing impact law enforcement
4) Assessing impact criminal justice reforms
5) Describing sanctions offenders
How to measure? -> 5 sources of information
1) Law enforcement
2) Research
3) Policy documents
4) Private information
5) Media and NGO’s
Law enforcement
Data / statistics from police, prosecutor, convictions, report or
database of enforces
- Ex. Belgium Financial Intelligence Processing Unit,
inspectorate services
Caveats (kanttekening)
- Only focus on data from police
- Reflects activities, priorities & resources
- High dark number: unaware victims, no direct individual
victim, complex constructions, reluctance to press charges
Research
Victim surveys
- Ex. Survey on white collar crime, monitor criminality
corporate life
Self reports
- Ex. SUBLEC Belgium
