CHAPTER 13
White-Collar and Organized Crime
Chapter 13 Multiple Choice
Choose the best answer for each of the following.
1. __________ has been called the biggest white-collar crime in history.
a. The collapse of the Enron Corporation
b. The bankruptcy of WorldCom, Inc.
c. Teapot Dome
d. The 1980s savings and loan disaster
2. Martha Stewart was implicated in the insider trading scandal involving
a. Enron.
b. WorldCom, Inc.
c. ImClone.
d. Arthur Anderson.
3. To what exactly did the concept of white-collar crime originally refer?
a. Crimes involving illegal business enterprises
b. Any occupationally-related crime
c. Crimes committed by those who had been entrusted with money, such as bank tellers
d. Crimes committed by persons of high social status using their occupational positions
for illegal gain
4. According to Gary Green’s typology of occupational crime, __________ occupational crimes
benefit the employing agency.
a. organizational
b. state authority
c. professional
d. individual
5. A physician who bills Medicare for blood tests that are never actually performed is involved in
__________ occupational crime.
a. organizational
b. state authority
c. professional
d. individual
6. Currently, the concept of white-collar crime focuses on the
a. persons involved.
b. occupational involved.
c. nature of the crime.
d. work environment.
7. The obstruction of justice conviction of the accounting firm of Arthur Anderson is an example
of __________ crime.
a. corporate
b. state authority
c. professional
d. blue collar
8. Which of the following is an example of corporate fraud?
a. Insider trading
b. Ponzi schemes
c. Advance-fee fraud
d. Equity skimming
9. _________ fraud includes stock market manipulation, Ponzi schemes, and hedge fund fraud.
a. Mortgage
b. Corporate
c. Securities and commodities
d. Mass-marketing
10. Which of the following statements about health-care fraud is not true?
a. Health-care fraud is not limited to any particular geographic area
b. Health-care fraud targets large health-care programs as well as beneficiaries
c. Health-care fraud is perpetrated by organized crime groups
d. Health-care fraud primarily targets private health-care programs, rather than
government-sponsored Medicare and Medicaid
11. ____________ fraud is any fraud connected with communications media.
a. Mass-marketing
b. Environmental
c. Mortgage
d. Corporate
12. Which of the following is an example of environmental crime?
a. The cover-up of research findings about asbestos-caused diseases by several of the
largest asbestos producers in the United States
b. The nationwide savings and loan disaster in the 1980s involving personal appropriation
of funds by institutional executives
c. The dumping of 11 million gallons of crude oil off the coast of Alaska by Exxon’s
Valdez supertanker
d. The class action suit against makers and sellers of silicone gel breast implants
13. __________ criminology is the study of environmental harm, crime, law, regulation,
victimization, and justice.
a. White-collar
b. Green
c. Classical
d. Environmental
14. Edwin Sutherland applied elements of ________ theory to white-collar crime.
a. differential association
b. strain
c. corporate culture
d. control
15. Why do Hirschi and Gottfredson conclude that white-collar criminality is less common as the
types of criminality found among the lower classes?
a. People who have the opportunity to commit white-collar crimes rarely have the
motivation
b. People who are in a position to commit white-collar crimes rarely have the necessary
opportunity
c. People working at the white-collar level generally do not have the characteristics
associated with crime commission
d. People at the white-collar level generally do not have the skills to commit crimes of
any type
16. According to John Braithwaite, the central explanatory variable in all criminal activity,
including white-collar crime, is
a. self-control.
b. inequality.
c. social class.
d. learning.
17. The 2001 _________ Act gives the SEC the authority to bar dishonest corporate directors
and officers from ever again serving in positions of corporate responsibility.
a. Sarbanes-Oxley
b. Securities Exchange
c. Sherman
d. Clayton
18. The _________ Act was passed to prevent the development of trusts and monopolies in
restraint of trade.
a. Sarbanes-Oxley
b. Securities Exchange
c. Sherman
d. Clayton
19. __________ acted as a quasi-police organization in the Italian ghetto areas of American
cities during the industrial era.
a. The Black Hand
b. La Cosa Nostra
c. La Mano Negro
d. The Mafia
20. The expansion of organized crime and their focus on official corruption was due to which
event? a. World War I
b. Prohibition
c. The Great Depression
d. World War II
21. Which of the following is not one of the five types of activity that may qualify as organized
crime, according to the 1976 federal Task Force on Organized Crime?
a. Racketeering
b. Terrorism
c. Theft/fence rings
d. Murder for hire
22. Criminal enterprises originating from the former Soviet Union are part of __________
criminal enterprises.
a. Eurasian
b. Balkan
c. Middle Eastern
d. Asian
23. Which organized criminal enterprise is set up around a clan-like structure, rather than using
the structure found in the traditional Sicilian Mafia?
a. Asian criminal enterprise
b. Middle Eastern criminal enterprise
c. African criminal enterprise
d. Balkan criminal enterprise
24. Which of the following is an example of a nontraditional Asian criminal enterprise?
a. Chinese triads
b. Japanese Yaukza
c. Chinese tongs
d. Japanese Boryokudan
25. The rapid development of African criminal enterprises since the 1980s is due to
a. the response to the 9/11 terrorist attacks in the U.S.
b. the economic collapse in the early 21st century.
c. advances in communications technology.
d. the collapse of the former Soviet union.
26. Unlawful activity undertaken and supported by organized criminal groups operating across
national boundaries is known as __________ organized crime.
a. international
b. transnational
c. intercontinental
d. overseas
27. The first federal legislation aimed specifically at curtailing organized crime activities was the
__________ Act.
a. Hobbs
b. RICO
c. BCCI
d. Organized Crime Control
28. The single most important piece of federal legislation that specifically targets organized
crime activities is
a. the Hobbs Act.
b. RICO.
c. the Sherman Act.
d. the Sarbanes-Oxley Act.
29. Legalizing or decriminalizing illegal drugs falls into which of Howard Abadinsky’s
approaches to controlling organized crime?
a. Increasing the risk of involvement in organized crime
b. Increasing law enforcement authority
c. Reducing the economic lure of involvement
d. Decreasing opportunity for organized criminal activity
30. Which of the following activities to control organized crime would fall into Howard
Abadinsky’s category of reducing the economic lure of involvement?
a. Legalizing gambling
b. Enhanced forfeiture statutes and racketeering laws
c. Educational programs and job-training initiatives
d. Increase law enforcement resources
Chapter 13 True-False
Choose whether each statement is true or false.
1. Securities fraud is a form of equity trading based on confidential information that could affect
the value of stocks being traded.
a. True
b. False
2. According to Edwin Sutherland, a white-collar offender was a person of high social status and
respectability.
a. True
b. False
3. Blue-collar crime involves crimes committed by members of less prestigious occupational
groups.
a. True
b. False
4. State authority occupational crime is committed by professionals in their occupational
capacity.
a. True
b. False
5. Private health-care programs are the most likely to be victims of health-care fraud.
a. True
b. False
6. The problem of money laundering in the United States appears to be declining.
a. True
b. False
7. Welfare fraud includes the use of deceit to obtain worker’s compensation or unemployment
payments.
a. True
b. False
8. Environmental crimes involve violations of the criminal law that damage protected land areas.
a. True
b. False
9. White-collar crimes generally are not committed by terrorists.
a. True
b. False
10. According to Hirschi and Gottfredson, selection processes inherent to the high end of the
occupational structure tend to recruit people with relatively low propensity to crime.
a. True
b. False
11. John Braithwaite suggests that corporate officers are motivated to evade the law despite the
generally positive relationship that exists between businesses and the government agencies that
regulate them.
a. True
b. False
12. The Sarbanes-Oxley Act is the first federal legislation directly relating to the conduct of
American business.
a. True
b. False
13. One result of Prohibition was police corruption.
a. True
b. False
14. Loan sharking involve lending money at rates higher than those prescribed by law.
a. True
b. False
15. The James Gang, led by the outlaw Jesse James, was a true criminal organization.
a. True
b. False
16. State laws defining criminal enterprise are generally much more inclusive than federal
statutes.
a. True
b. False
17. Nigerian organized crime groups are well known for their financial frauds.
a. True
b. False
18. Despite the globalization of crime, U.S. law enforcement activities have not had to expand
beyond national borders.
a. True
b. False
19. According to RICO, it is illegal to derive any income or proceeds from racketeering.
a. True
b. False
20. According to Howard Abadinsky, increasing law enforcement resources is a way of reducing
the economic lure of involvement in organized crime.
a. True
b. False
Chapter 13 Fill in the Blank
Fill in the correct answer for each of the following.
1. The Teapot Dome Scandal involved the administration of President __________
2. According to Gary Green’s typology of occupational crime, __________ occupational crime
benefits the employing organization, not the individual employees.
3. The focus of the modern concept of white-collar crime has shifted to the __________.
4. __________ fraud is any fraud connected with communications media.
5. Victim of ___________ are contacted regarding substantial sums of money held in foreign
accounts that are supposedly owed to them, or are asked to act as U.S. agents to secure the
release of funds to the U.S.
6. Edwin Sutherland applied his __________ theory to white-collar crime.
7. Braithwaite has recommended the implementation of a(n) __________ model as a way of
reducing white-collar offending.
8. The __________ Act of 1933 is often referred to as the “truth in securities” law.
9. __________ occupational crimes are especially likely to be reduced by enforcement and
protective efforts.
10. The replacement of Jewish and Irish gangs by Italian immigrants is an example of ________.
11. Organized crime groups infiltrate legitimate businesses to use as fronts for money
__________.
12. A(n) __________ is a group of individuals with an identified hierarchy and extensive
supporting network engaged in significant criminal activity.
13. __________ refers to unlawful activity undertaken and supported by organized criminal
groups operating across national boundaries.
14. The __________ Act was the first federal legislation aimed specifically at curtailing the
efforts of organized crime.
15. Asset forfeiture under RICO allows federal officials to seize the proceeds of those involved
in _________.
Chapter 13 Matching
1. Match the following white-collar crime terms to the correct definition
1. Embezzlement
a. The use of an electronic communications
facility to intentionally transmit a false
message in furtherance of a fraudulent activity
2. Securities fraud
b. A type of equity trading based on
confidential information about important
events that may affect the price of the issue
being traded
3. Wire fraud
c. The theft of money resulting from
intentional manipulation of the value of
equities
4. Insider trading
d. The unlawful misappropriate for personal
use of money, property, or other thing of value
entrusted to the offender’s care, custody, or
control
5. Bank fraud
e. Any activity that illegally inhibits
competition between companies within an
industry
6. Antitrust violation
f. Fraud or embezzlement occurring within or
against financial institutions insured or
regulated by the U.S. government
2. Match the type of occupational crime to its definition
1. Individual occupational crime
a. Crimes committed for the benefit of an
employer or an organization and from which
only the employer or organization benefits
2. State authority occupational crime
b. Crimes committed by professionals in their
occupational capacity
3. Organizational occupational crime
c. Crimes committed by officials in public
office or their employees
4. Professional occupational crime
d. Crimes committed by people acting alone
3. Match the type of financial crime to its specific example
1. Securities and commodities fraud
a. Equity skimming
2. Health-care fraud
b. Foreign lottery fraud
3. Mortgage fraud
c. Stock market manipulation schemes
4. Mass-marketing fraud
d. Kickbacks
5. Corporate fraud
e. Health care providers conducing
unnecessary surgeries
4. Match the organized crime group to its description
a. Include both traditional and nontraditional
criminal enterprises
b. Developed quickly in recent decades due to
advances in communication technology and
the globalization of the world’s economies
c. Emerged in the West when Refuseniks were
permitted to immigrate to the U.S.
d. Some but not all have nexus to terror
e. Organization is based on a clanlike
structure grouped around central leaders
Chapter 13 Essay
Answer the following questions.
1. What was the Teapot Dome Scandal of 1929 and how did it end?
2. Explain Gary S. Green’s typology of organized crime.
3. List and define three types of financial crimes
4. What were the two acts created by federal legislators in reaction to the Stock Market Crash of
1929, and what were they designed to do?
5. Identify the five types of activities that may qualify as organized crime
Answer Organized crime is defined as the establishment and control of both legal and illegal
forms of gambling including lotteries, bookmaking, and horse-race and athletic betting.
Organized crime includes loan-sharking (the activity that entails the lending of money at far
6. Identify three of the major organized crime groups of different nationalities that currently
operate in the U.S. and discuss the type of crime in which they tend to be most involved.
Chapter 13 Critical Thinking
Answer the following questions.
1. What differentiates white-collar crime from other forms of crime, and why is it so difficult to
prosecute?
2. What approaches might best control organized crime? Give examples of these approaches