NCJ Number
79657
Date Published
1979
Length
10 pages
Annotation
A model of business functions and operations is constructed to pinpoint those activities which are vulnerable to exploitation by white-collar criminals. Remarks are presented on the difficulties in detecting and prosecuting economic crime in Sweden.
Abstract
All businesses, whether they produce products or provide services, and whether they are simple, privately owned enterprises or multinational corporations, operate on the same general principles. They take raw materials of some type, put the materials through a process to produce the product or service, and then market the output. This activity takes inputs such as human resources, machines and other equipment, a facility, and so on. Profits made from the sales are used to pay employees and other overhead expenses. Businesses also have additional monies in the form of invested capital or loaned monies. The business will pay taxes on both its profits and its capital. Economic crime, when it occurs in businesses, can affect any of the abovementioned phases of the business operation. Generally, economic crime in businesses can be categorized as (1) misuse of invested capital, with the victims being the shareholders and creditors (this type is perpetrated through fraudulent recordkeeping, misrepresentation of facts, and other methods of reducing a person's rightful share of the profits); (2) misuse of loaned capital, with the victims being the creditor and guarantors of the notes (crimes include fraudulent bankruptcy, insurance fraud); and (3) crime perpetrated through abuse of the workforce, such as unfair labor practices, abuse of health and safety regulations. Economic crime can also be classified as crimes against the consumers of the products or services; crimes whose aim is to cheat or deceive the middleman, distributors, marketers; abuse of the environment and natural resources; and crimes against the Government, especially tax and customs fraud. Detection, investigation, prosecution, and conviction of business crimes in Sweden is difficult because meddling in private business has traditionally been taboo, authorities are not sufficiently familiar with the field, and the laws and regulations allow too many loopholes and do not give law enforcement authorities adequate powers to conduct a thorough investigation. A model of business operations is illustrated, and no references are cited.