Business crimes - Business in United States of America

Business crimes: Historical Frauds

Business crimes: Modern High-Tech Frauds

Definition: Crimes committed by individuals or corporations during the course of business, usually for economic reasons
Significance: White-collar crimes such as embezzlement, fraud, tax evasion, false advertising, and unfair labor practices have occurred with regularity throughout the history of businesses and corporations. Whether committed at the individual or corporate level, these crimes can destroy companies and the lives of employees and investors as well as hurt customers and everyday Americans.

Although business crimes can be perpetrated by business owners, most white-collar crimes are committed by individuals who work for or manage businesses. Therefore, business crime in the United States has developed hand in hand with the growth of large businesses. As businesses grow too large for every aspect of their operation to be overseen by their owners, the opportunities for fraud and embezzlement multiply. Corporations, in which ownership and management are separated, are especially vulnerable to white-collar crime. One of the earliest forms of corporations, the railroads, were subject to fraud for a number of reasons: They had lots of cash, assets were spread out over miles of countryside, and the business was too large for a single manager to oversee operations. Therefore, the early railroad companies experienced numerous instances of fraud. By the 1870’s, half of the railroads in America were in receivership, many because of the illegal acts of corporate managers.

Dale L. Flesher

Further Reading

  • Cooper, Cynthia. Extraordinary Circumstances: The Journey of a Corporate Whistleblower. New York: Wiley, 2008. The full story of the downfall of WorldCom by the internal auditor who uncovered the fraud. 
  • Fox, Loren. Enron: The Rise and Fall. Hoboken, N.J.: Wiley, 2003. Examines Enron’s culture and what led to the fraud there. Also discussed are the impacts on the financial markets and the U.S. economy. 
  • Miller, Norman C. The Great Salad Oil Swindle. New York: Coward McCann, 1965. Tells the story of how one man manipulated millions of gallons of nonexistent salad oil, resulting in the bankruptcy of two Wall Street brokerage houses; caused the demise of a subsidiary of American Express Company; and destroyed the stability of the stock market. 
  • Minkow, Barry. Clean Sweep. Nashville, Tenn.: Thomas Nelson, 1995. Autobiographical work describing the author’s leadership at ZZZ Best, involcing one of the largest frauds of the 1980’s. 
  • Pilzer, Paul Zane, and Robert Deitz. Other People’s Money: The Inside Story of the S&L Mess. New York: Simon & Schuster, 1989. The story behind the frauds at savings and loan associations during the 1980’s. 
  • Shaplen, Robert. Kreuger: Genius and Swindler. New York: Alfred A. Knopf, 1960. Explains the role of Ivar Kreuger in what at the time was the largest corporate bankruptcy in history. Kreuger’s securities were the most widely held in the world. 

See also: computer industry; Enron bankruptcy; identity theft; U.S. Department of Justice; organized crime; Ponzi schemes; Private security industry; Racketeer Influenced and Corrupt Organizations Act; U.S. Secret Service; United States Department of the Treasury.

Business crimes: Modern High-Tech Frauds

Business crimes: Historical Frauds

Bankruptcy law: Corporate Bankruptcy After 1978

WorldCom bankruptcy

U.S. Department of Justice (DOJ)

Identity theft

Enron bankruptcy

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