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Occupational Crime & Law: Examples

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  • 0:03 What Is Occupational Crime?
  • 2:20 Example: Charles Ponzi
  • 4:07 Example: The Enron Collapse
  • 4:54 Example: Bernie Madoff
  • 5:52 Lesson Summary
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Lesson Transcript
Instructor: Brittany McKenna

Brittany is a licensed attorney who specializes in criminal law, legal writing, and appellate practice and procedure.

This lesson discusses the concept of occupational crime and the circumstances under which it is most likely to occur. Several famous examples of occupational crime are also discussed.

What Is Occupational Crime?

Imagine that you answer phones at a large accounting firm. One day, you hear a couple of high-level executives discussing a possible merger with another large firm. You do some snooping, and soon realize that the company is poised to be sold. You think that this sale will cause stock prices to go up substantially, so you rush home to tell your family and friends to invest in the company.

As the snarky saying goes: 'No good deed goes unpunished.' What you assume was a just friendly tip to help your pals makes some easy money may have actually constituted the commission of an occupational crime. Occupational crime refers to a crime committed by someone during the course of his or her employment. Also known as workplace crime, occupational crime encompasses a wide variety of criminal acts including: theft or embezzlement, money laundering, and the misuse of company property or information.

The illegal conduct in occupational crimes originates in the employee's access to company data, property, or funds. For example, if an accountant at a large manufacturing business purposefully withholds information about company revenue from the Internal Revenue Service, the accountant has committed corporate tax fraud. In this scenario, the accountant has committed an occupational crime. He has used his access to sensitive company information (i.e., revenue reports) to defraud the IRS.

The most common form of occupational crimes are white-collar crime, which are financial crimes committed by business professionals. White-collar crime is nonviolent in nature, and often arises in circumstances where business professionals misuse company information for financial gains.

Occupational crime is not only limited to business professionals in the private sector. The corruption of government officials is also considered to constitute occupational crime. Occupational crime may also be industry specific. For example, a power plant that discards waste into streams in violation of environmental regulations has committed an occupational crime. Let's take a look at a few infamous examples of occupational crime.

Example: Charles Ponzi

In 1918, Boston businessman Charles Ponzi discovered a way to make money by buying and selling postal reply coupons. Postal reply coupons allowed for someone in one country to write a letter to someone in another country with a coupon enclosed that would pay for postage for a reply. Ponzi learned that postal reply coupons were very cheap in Italy, but very expensive in America. Once he recognized the discrepancy in prices, Ponzi asked his Italian relatives to buy large amounts of postal reply coupons and send them to him in America.

Ponzi realized large profits in selling postal reply coupons in America. Soon he convinced investors to give him money to purchase coupons to be sold in America. But instead of paying investors with profits, Ponzi paid investors with money belonging to other investors. This fraudulent practice gave the impression of a highly successful business. Ponzi's scheme began to unravel in 1920. Despite living extravagantly, Ponzi was in debt.

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