Corporate Crime: Definition, Types & Examples

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  • 0:01 What Is Corporate Crime?
  • 1:53 Types of Corporate Crime
  • 3:43 Lesson Summary
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Lesson Transcript
Instructor: Yolanda Williams

Yolanda has taught college Psychology and Ethics, and has a doctorate of philosophy in counselor education and supervision.

In this lesson, we'll be looking at corporate crimes. We will learn more about the different types of corporate crimes as well as look at some examples.

What Is Corporate Crime?

Rite Aid is one of the largest drugstore chains in the United States. There are over 4,600 Rite Aid stores spread out across 31 states. In 2014 alone, the drugstore chain estimated its sales to be over $26 billion.

However, 2014 was also a year of trouble for Rite Aid. Rite Aid Corporation was required to pay the United States 2.99 billion dollars for violating the False Claims Act by using gift cards as illegal inducements to get individuals on Medicare and Medicaid to switch their prescriptions to Rite Aid pharmacies. In other words, the United States government felt that Rite Aid was using the gift cards improperly as a means to influence the healthcare decisions of Medicaid and Medicare recipients. In this example, Rite Aid committed a corporate crime.

Corporate crime is a crime committed by a corporation or business entity or by individuals who are acting on behalf of a corporation or business entity. In this example, the corporate crime was committed by a corporation (Rite Aid). However, a corporate crime can also be committed by someone who is employed by a corporation if the crime benefits the organization.

For example, in the late 1980s, Beech Nut Nutrition's chief executive Neils Hoyvald and vice president John Lavery violated the Federal Food, Drug, and Cosmetic Act by falsely selling and mislabeling apple juice sold by Beech Nut Nutrition. Both Hoyvald and Lavery were sentenced to 366 days in prison and had to pay a $100,000 fine. However, since the criminal act benefited Beech Nut Nutrition, the corporation was also held liable and had to pay a $2 million fine.

Types of Corporate Crime

Let's look at the different types of corporate crime:

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