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SYSK Selects: How White-collar Crime Works

Stuff You Should Know

51:32 min | 4 months ago

SYSK Selects: How White-collar Crime Works

"From the mind of legendary filmmaker Ridley Scott the visionary director of alien and Blade runner comes as neck Sifi masterpiece the HBO Max Original Series raised by wolves in epoch new series to Andrew Guardians task to the singular mission to raise the last of mankind as their own and protect them any cost don't Miss Ridley Scott's highly anticipated television debut raised by wolves humanity begins again now streaming only on Hbo Max You Know Folks Finding a new home that fits your family's needs can be pretty tricky luckily when you need a mortgage that fits your family's. Needs. A great place to look is rocket mortgage. They provide the tools and expertise you need to understand all your options and find out exactly what works for you, and if you have questions now or along the way there, online home buyers guide has tons of Great Info to help you move forward confidently visit rocketmortgage dot com slash stuff because when you need a mortgage that fits your life rocket can call for cost information and conditions equal housing lender licensed in all fifty states in. M. L S Consumer Access Dot Org number three zero three zero. Hey everybody. It's me Josh your old pal, and for this week's S. Y. S. K. selects I've chosen one of those overlooked gems from way back in July of two thousand and twelve eight years ago Keane believe that it's how white collar crime works. Out Back Relax and learn about how the other half commits crime. Welcome to stuff. You should know a production of iheartradio's how stuff works. Hey and welcome to the podcast I'm Josh. Clark. There's Charles W. Chuck Bryant sipping on his qua-. Mineral Water Yes delitzsch and this isn't even sponsored by the question. And this? Like three times? I agree. Qua- call us. and since you put the two of US couple of microphones in an ice cocaine of refreshing Qua-, mineral water together you have something called stuff you should know it's a podcast. PODCAST I'm looking to see who makes us actually. No. I thought it was GONNA say coca-cola smaller Zillah. Now it's Sundance Beverage company Oh. Yeah. They're huge from Minnesota I. think that's perfect. That is a perfect sponsor for stuffy know a little guy that's producing a great product agreed look what. So Chuck yes I've got an intro today. Awesome a MRIs. Stop criticizing me no I mean. So, very recently a trio of Brits economists British economists. Try like walking saltines on the very exciting. But, anyway, these guys did something pretty cool. They studied bank robberies. And their study was published in a journal called significance. It's actually kind of a cool journal it takes statistics and applies to real world stuff. So it's an interesting statistics journal. There is such a thing I in if there is this your and what these guys found was that bank robbery is actually a really terrible way to make a living. Yes I would agree with that morally economically. It's a terrible way to make a living to sure they they office no good, right yes. They looked at looked at a lot of variables like the number of people involved and they found that the bigger, the gang, the more the bigger the hall I guess, but it also meant that's one extra mouth to divide up amongst unless you're like one of those bank robbers just kills everybody afterward. Yeah. You don't WanNa get in bed with one of of those guys like Ben Affleck or like in heat when there are a lot of can. Heat Yeah. In the town Ben Affleck recent heist movie. Killing going on I was GONNA. Let that one walk by but you brought it up twice. I enjoyed a really. and okay. So anyway, there's a lot of variables involved but what they found is no matter what in the UK you can make off with about thirty one gram that's not bad her. Yes. In on average that's what that's what the take was. So in the UK, it's not so bad but at the same time thirty, one grain, what are you going to do with that? Yeah I mean if you WanNa live the highlife you gotTa Rob like four or five banks a year easy right or right okay or. If you're in the US, you have to rob a lot more than that. So the UK suffers about one hundred and six bank robbers a year in the US There's twelve thousand. And of those two thousand, the average take is like four grand. They only have how many a year England hundred, six God that's amazing. Really stiff stiff gun laws and I think that probably Detroit robbery because you kind of have a gun or a note in your pocket says something well, these guys figured out that the presence of a firearm increase your take. Okay. but anyway so forty three, hundred bucks. Yeah. That's not much at all. No, and about a third of bank robberies I guess in both countries yield nothing. Zero Zero. Wow. So it's a lot of hard work a lot of risk for very little gain. The real money is in white? Collar Crime Oh. Yes. You WanNa make some cash quick maybe one good heist. It's going to set you for the rest of your life and even if you're caught even if you're caught the chances are you will have a mild if any penalty levied against you well, white collar is the way to go. Yeah. We're talking guys who tell people that. They are financial investors and get friends and family and parents of the Little League coach to give them nine hundred grand There's other guys who have little penny stock companies that pump up there stock prospects called stock touting and dump all of their shares. Sure. that's investor fraud. They make hundreds of thousands if not millions of dollars, it's where the real money is an. Historically speaking it has really low risk. Yeah. All. Right. So we're endorsing white collar crime. We're not endorsing it. I was being facetious. Okay. I thought you met up with white collar crime in two thousand twelve. No. No. As a matter of fact, it's going down. The Times are definitely changing. There's a big struggle going on right now is to figuring out the just the right amount of punishment with white collar crime because there's a lot of factors involved it's different from blue collar crime eeg stealing a car robbing a bank church. There's a lot of differences that differentiate it. That's separate the two. And one of those now is the sentencing for him is probably stiffer, which is a total reversal from how it used to be before, and they've also close a lot of the club beds down that got so much press. Yes. Well, the change them they're still there there are a lot more shutdown period. Oh, really. Yeah. Just to ship them to Real Federal Penitentiary penetentiary penitentiary century. Senator. That reminded me of of word that will definitely be hearing at some point in this podcast. What? It's a Ponzi. Oh Yeah. Because that's definitely white collar part of the problem with white collar crime? Josh is you know from reading this is that it's hard to come up with an exact definition of what constitutes it. So that's why they have a hard time getting great statistics on punishment and fines levied and how many they're catching, but I'm GONNA go with. Non Violent Crime Yeah that typically involves. Typically because it's kind of all over the map, right typically involves deceit and fraud. Given by perpetrator because of their occupation. Yeah. For there is a lot of times it's called occupational Crime Yeah. And if you look at it through that view, which is a very broad view of white collar crime or it's not just the exects in the three thousand dollar suits who perpetrating this it's the guy who stealing pencils from work. Yeah or violent. Especially somebody asked him if he did it and he says no, and it's because you are you're you're granted this opportunity through your. Occupation. Actually I would call that petty theft. It's but I'm saying like a very, very broad definition of collar crime that that definitely counts. But for the most part when you think of white collar, you think about the CEO's you think about. Investor fraud embezzlement that kind of stuff exactly feds have been after it in the United States in earnest since nineteen seventy four as far as a a dedicated division the. Yeah, and that's because the Nixon I read and then despite that about three, hundred, billion dollars a year and that's a pretty rough estimate was the two, thousand, ten, two, thousand, ten. Yeah so. Let's talk about a few ways you can commit white collar crime. Yeah. Because the definition you gave us like beautiful it's pretty good and there are some that just like I said, investment fraud or embezzlement or. prototypical. Wash your other crime insider trading is one that's a big one now, which falls under securities fraud right? Yeah. I mean it's a type of securities fraud. So basically, insider trading we've I swear we've done something on this I don't think so. It must have been in our fannie and Freddie presentation then. Studied a lot of this stuff that we yeah and I thought we'd done a podcast and I guess not, but insider trading is essentially like Let's say that you and I find out that discovered an awesome quarter and so we go and buy a bunch of discovery stock for nothing, and then it just shoots through the roof after the stock price comes up that's insider trading shirt that's using private knowledge about a publicly traded company for your own gain. That's a no no, we were both. To other people that would count as well and then. Stewart yeah they took part and then they would be insider traders as well. Exactly and it works the opposite way as well. Like if you find out that there's a lot of terrible terrible information's going to make your stock drop trying to sell before that information because public you're in trouble big trouble. Securities fraud which insider trading is kind of like that but it is also manipulating cooking the books you've heard that term of your own company to maybe undervalue a stock before it goes public or I mean there's all different variations but basically involves manipulating numbers in a dishonest way pump and dump scheme. Yeah. It stock touting there's that's all securities fraud And then there's antitrust violations or another good one. There's this has been kind of big lately. So Google supposedly hogging the Youtube Meta data, which is preventing Microsoft for making a decent APP for it a really yeah and and Google's like well, it's proprietary whatever and I know you got to kind of to share that. That's their alleging an antitrust violation companies police when another with that. Oh, I'm sure and then also price-fixing a big one, which is like the of companies policing another. It's collusion between companies like apple and publishers fixing the prices of e books allegedly has been going on that really. Yeah. Yeah. Man It's going on all over the place. It's sincerity dirty dirty world. Bribery one of the oldest tricks in the book Obviously that's involved some sort of A. Payoff or a kickback in exchange for. whatever information I get the bid my company gets your bid this government job, and I get a little kickback or I give you a little kickback rather. Any kind of maybe favorable decision the CAN influence your company. Yeah. Little Little Greece in the palm going on. Three Frozen steaks, please. Consider it and you say. Consider granite and within each of these steaks is a one million dollar bill. It's not even those uneven exist what frozen steaks with money in a million dollar bill we know about frozen deutschemarks. So tennis dollar by the way I, want the dollar. They'll give you fifty cents or thirty three and a third. We gotTA give Jerry Haircut. Don't go there. We'll talk about it later. Embezzlement. Yeah. Office space. Everyone's seen the movie office Fisher a little program they had to like shave a seven or something off of. That's embezzlement. They were given the opportunity through trust with books with accounting. They basically had access to the money and skim off the top that's in Belgium appearance. Wrong guys. Money Laundering which we have a podcast on Yup a ponzi schemes. Yeah. On tax evasion huge So basically. All of the those were all the stars. There's also other ones like Espionage industrial espionage corporate SPF on Secrets white-collar. Sure. remember the lady who tried to sell Pepsi's secret. Yeah Coke Yeah that was pretty Hackney. No coke secret the Pepsi. WHO's like we're here she wasn't even called the cops. She didn't do a real good job as you surprise. environmental law violations like toxic waste. Covering that up. Like Erin Brockovich style yeah one of the things they point out in here, which is when it comes to things like. Your little office space scheme that you just touted A Lotta Times, it's difficult to imagine victims like in office space they think, no one's going to miss a penny is a huge company, right? So you commit these crimes without realizing that someone is hurt somewhere down the line. If you dump your stock, your company stock that he knows about the tank and I'm not saying it's Understandable but if you've worked your whole career. Investing in this company with your 401k yeah. You know it's about two tank. You're like man I need to sell this or else I'm done for my family's done for you don't think about the people buying the stock, they're the victims. No it's absolutely true and I mean like you are being pawned you're pawning your problem often somebody else I think you paint a really really excellent. Scenario like you can in some cases feel bad for the white collar criminal Especially, if it's just some average Joe who's worried about his 401k yeah. or the case of Enron. You don't feel bad for the the upper dudes you feel bad for everyone in that company that got defrauded right but they were strictly victims they. Turn around and try to dump stocks. But that that's a very visible case of like screwing over your own employees but you make a good point like even if the even if the criminal is sympathetic, there still is a victim even if it's just some amorphous. Trader. They'll never meet even if the victim is some like hedge fund manager. Yeah. It's really tough. There's like a really weird spectrum here. There's like I don't know if it's a bell curve or like the UV spectrum who knows yeah. But there's sympathies like placed in different spots, sympathies and. Antipathies. Yeah. Places along this this depending on who did what and what they gained from and what their motives were agreed because you also have credit card fraud in computer and mail fraud. And counterfeiting and things like that. You know the Nigerian. E mail scams, white collar, but and they're in the same boat is like Ken Lay and Jeff Skilling's Brian Ron. Exactly same scummy crooks or let's say you commit a little credit card fraud and you or bankruptcy fraud in your dislike be easy way to get out of my debt. I'd say someone stole my credit card. It's very easy there to not envision a a victim because it's It's Chase Manhattan Bank and they're going to notice. But what happens is they raise the rates on you and me. And all the sudden everyone across the board is paying more money for stuff. Yes. That is that is true. That is very true and I that is I think everybody's probably i. think good companion piece that occurred to me is to go listen to our why do corporations have the same rights as you? One of the fundamental flaws of corporate policy is that you serve your shareholders I right like you need to adhere to the law. But really ultimately, like anything you can do to serve your shareholders is your mandate as a as a corporate governance right that includes keeping the profit margin high highest possible. Yeah. which you're not GonNa go to your shareholders and be like, Hey, we're making enough money. We took kind of a hit, but we're still making a ton of profit so we'll just take a little hit this year. No, it's where we took a hit. So we're going to fire people. Yeah. However. You reconcile that I mean that's your own personal beliefs like what you feel about that. But that is reality as far as business goes right the great there's fraud there's adjustments to the fraud the. Fraud and it's the corporation trying to get as lean as possible. They're not gonNA take the hit for that. They're not going to say, Oh, well, a bunch of people. Defaulted. On their credit cards this year I guess we'll just have a bad year. No and I know in reality that's how it works but I find disingenuous to be like well, everybody suffers. So you know people lose their jobs because it's like there's a there's a point be in there that that has to be held accountable to some degree well, which is your own frigging ethical code of conduct and like about not doing that because it's the wrong thing to do not I'm saying like there's an institution. Being the hit and then turn around and firing this poor guy. Yeah exactly. It's just it's tough because. I came across a word when they were describing white collar crime giving a definition of and they said victims. Colon. Diffuse. Yeah you don't meet the person the the victim passes along the the hit two other people. It's a big it's nebulous. Yeah. And even if they're raising rates by like a quarter of a percentage point or you're paying an extra two dollars a consumer a year. It's like it's still not right. You know. Hey everybody today's episode is sponsored by the new Mazda C X thirty. So lately, we've been trying to do our part to be cautious and do what we can for public health. So we've. Cooped up in the house a lot not a getting out a lot Robert is there anything you miss about the about the road trip or going on long drives? Have to say there is something really cool about having a long drive. Hopefully, you know like a in driving through the mountains or something and you get to just really dive into a particular. Really experience it beginning to end while taking in the scenery also a great time for the children to learn about metal machine music. 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It creates tech that gives you time back. So you can focus on what matters that's right. There's a new world of work being built six can't wait to show you just visit citrus dot com slash stuff. So where did this come from? Josh came it sounds like it came from a cold. Wall delivery boy. I WANNA to know more about this was this do cold or not really steal a lot of wool. So you're talking about the carriers carriers case of fourteen seventy, three ish it's the first white collar trial. Yes. in in resulted in the first white collar law in fifteenth century England and this wool transporter was given a bunch of wool and said, Hey, take this will to this person and it was his job. So he decided to instead just keep the Wolfer himself for his own you. Okay. So you looked into this more. Yeah. I thought he might have been like cold on his journey now and said, you know I'm GonNa keep some this wool. Now he he kept some of the woolley I. Think he kept all of them but somebody gave it to him. He's like thanks chump. He was but the key is and this is something that has is woven into the history, of White, collar crime. It what he did was not illegal at the time right? The law that was enacted as a result of the carriers case was there saying okay, this isn't this isn't illegal, but it's obviously there's a huge problem with this. So we're going to create a law right that outlaws this act so people can't do anymore good point. And basically, that's what happened. That's kind of what happens with every lie guess commits at first and then someone says, Hey, maybe we should do that. Yeah. Yeah, I guess. But in this case, especially like the industrial revolution in the West obviously you started getting these large corporations and all the sudden things like monopolies and price-fixing and employees, safety, and all these things crew come into effect for the first time. So that sort of when it was really born and when they started saying, Hey, we need to look at something called antitrust again like monopolies were not illegal but when a company bought up all of its competitors and said, oh Suddenly the price for your groceries. Like through the roof right where else you gonNA go it wasn't illegal but the the people of the world started screaming and governments finally responded and it was really the US that I had the real first solid response in the Sherman antitrust, act, in the eighteen seventies maybe I think Eighteen ninety name for John. Senator John Sherman Ohio. Republican Dude. Yeah Chairman of the Senate Finance Senate Finance Committee which I didn't know they even had way back then. They didn't either but I mean, it seems like a basic committee there. So this is interesting in that it was voted on it one by vote of in the Senate. Fifty one to one in the house by two forty, two, zero. Wow to there was one dude that didn't vote for it and then I think twenty five years later when they came up with the Clayton Antitrust Act to really put some punch into the Sherman. act. It was two, seventy, seven, seventy, four, and forty, six to sixteen. So in that twenty, four years, it sounds like maybe things got slightly corrupt here and there well, it wasn't that it was that. Maybe it was but there was also some real problems with the Sherman Act there was really vague. Yeah he basically said like. From here fourth. anti competitive corporate measures are illegal right and then left it to the courts to decide what was what and the courts weren't really in the mood to enforce it. So it went largely uninformed although American Tobacco Company and Standard. Oil to the big companies country were dissolved under the Sherman a standard oil big time. Imagine that like imagine going to accompany now and saying like, Hey, apple, it's too big. Yeah. So we're going to dissolve you into thirty one companies. We have all these federal regulators here and they're gonNA come in and look at everything and dissolve you into different company. Sorry. That's what they did. Yeah. Okay. Even still it didn't have enough teeth so they can't with the Clayton Antitrust Act then that one really spelled things out like you couldn't do price coronation anymore right which if you were black in America during the Jim Crow. Era. Price. Discrimination was mind boggling walk into a store if you're allowed in there to begin with yeah and they'll just make up whatever price they want. Yeah it's. It was really I'm reading this consumerism in America Book and at this point now is really just as Blemish on American. Slavery wasn't bad enough be like. Slavery Light through the Jim Crow era it's disgusting exactly Okay. So there is no price discrimination allegedly. Corporate mergers were outlawed. In the Clayton Yeah. and then interlocking boards where you had like competitive companies. Yeah. But the same people on the board of each right right. You can't have that and then also exclusive contracts or it's like Hey Home Depot you can sell our we bikers, but you can't tell anybody else's those contracts were out right? Hey Home Depot. They do stuff like that now though, right. Maybe not exclusively, but they carry lie. They do not want limited number of corporate mergers are locking boards exclusive contracts. All that stuff when they all. Chipped away. Okay. It's just I mean this this this act is like not enforce anymore basically. Well, that's one things that bugs me about like grocery or actually the big box hardware stores grocery shopping. You only have access to what they who they have partnered with. Whether it's your potato chip that you want your weed whacker that you want. It's true and most of the big bucks stores also have exclusive contracts the other way like, yeah we'll sell your weed whacker, but you can't sell it you. No one else can. Right. So it's like a real gamble I understand to like sign onto one of these giant corporations. Well, that's one in the Wal Mart effect that was one of the things I think they used to. Like a tint company or a awning company then like this mom and pop owning company, all of a sudden gets a Walmart contract and they're like sweet they answered all our prayers ordered like thirty thousand of these the order thirty, thousand they opened up like three new buildings, hire all these employees and then the next year they come back and say we want thirty thousand more but we're GonNa pay you about. Sixty percent less and you've already bought the buildings and even you know invested in the in the materials and the people and also you're screwed you know one thing that I've long thought and I'm GonNa totally take flack for this but I still think it's worth saying like you hear like well, that's just business. Yeah. I feel that any any institution where like morally reprehensible acts can just be you know. Off Handedly dismissed as a matter of course. Be of that institution is inherently fought. There's an inherent. Problem with it that's not okay. Agreed like we don't just go. Well, that's just murder. You know or well, let's just stealing. And welcome to Earth, human. Well, we have a moral and legal guidelines that we follow and businesses incorporations of so so long stood outside of these things. It's just it always bugs me when it's just like were you gonNa do yeah. I I don't like that. So sorry, I'm off my myself I. Agree completely well, my tie brand soapbox we'll said. So things are kicking along here in the industrial West. Corporations are getting larger and all the sudden these crimes start happening in something called a muckraker in the nineteenth and early twentieth century comes about and I didn't realize muckraker was exclusively a journalist. Yeah it's it's. An investigative journalist thought I would was anyone rake in muck no but it's specifically journalist who basically early on said, you know what? There's bad stuff going on C. and I'm going to expose you right on the instant Clare was one. And he wrote the jungle change. Of course I mean the FDA basically came about because of the investigation that he conducted. Well, muckrakers raked a lot of mock and caused a lot of problems in these companies and One of the things that came about because of the muckraking were you know? Things like the Clayton at the exactly right exposing all this stuff exactly and things like that. The federal regulations consumer protections, the muckrakers basically stirred up public sentiment like, Hey, don't be idiots like this stuff's going on and a lot of people said, well, it's not illegal and then a fortunately there are guys like ea Ross who was a criminologist and sociologist, and he started really kind of looking into this and said, hey, man. These people might not be criminal, but let's call them criminal dhs like those the coin, the coin for people who especially in business carried out these terrible acts that weren't illegal. He argued that even though it's not illegal, they're causing ill and these people are still responsible for him. So make a law that outlaws at dummies. Yeah. Yeah and he inspired a guy named Eh Sutherland. Okay. He came before Sutherland's yeah, Gotcha he was at the Ross working at the time of the muckrakers and then Sutherland came about twenty years later, Sutherland coined the term actually white collar crime in nineteen, thirty nine and he was criminologist and sociologist and he pretty much. Hid a broader definition that basically it was. The High Society and not the lower class at all. Committing these crimes, right which nowadays, you can't really say that because anyone can get a stock tip. Commit, enter you know it happens all the time across all spectrums of the class system but Sutherland's point was and he wrote a book called White Collar Crime Yeah his point was is that there is a huge bias in the United States where the where law enforcement in the courts leaned heavily on the working class crimes, and both ignored the crimes of the upper class. And said, this is not okay like if a guy's gonNA steal a thousand dollars from a cash register with no gun or anything like that right? Like there are other factors. But let's just say a guy steals a thousand dollars from a cash register these poor and a guy steals a thousand dollars from an investor and he's rich. That's they should be treated equally in the dot and that's what Sutherland's point one and he was the first to really bring to light. Wasn't he? Yeah. Well, Ross kind of started to but Sutherland, was very well received. It was well received in certain corners but there are also certain flaws pointed out by people over the years One of the things mentioned the article has said if he failed to distinguish illegal crime from deviant. mere deviant behavior. Like apparently his his whole premise was like you're into donkey's you're white collar criminal. Exactly. And the other thing I mentioned too was that he pretty much said, it was anyone like any upper-class non violent crime right and that's definitely involved in I. Think Fairly sure I think you can be working class. You can be business class if if you like that's a big part of white collar crimes, definition is your opportunity arises because of the trust that screen into you through your occupation, and even if you're a lower level employees you still may have access like the lady who wanted to sell the coke secret. She wasn't like seeing. No, she was an Admin, I believe. Hey friends as we slowly adjust to a new normal. We still need to be smart about how we do business and luckily there as stamps dot com to make things a whole lot easier. Yup. Thousands of small business owners have discovered the benefits of stamps dot com in recent months, and they've been able to keep their business running and avoid the crowds at the post office all from their own computers. That's right. Because as you know was stamps dot com, you can print postage on demand and avoid going to the post office and you'll save money with discounted rates that you can't even get at the post office. Stamps Dot. com also offers ups services with discounts up to sixty two percent and no residential surcharges. All you have to do to you stamps dot com is grab your computer and print official US postage twenty, four, seven for any letter, any package, any class of male anywhere you want to send and right now listeners stuff. You should know get a special offer that includes a four week trial plus free postage and digital scale without any long term commitment. JUST GO TO STAMPS DOT COM click on that little handy microphone at the top of the homepage and type in S. Y. S. K. THAT HAS STAMPS DOT COM enter S. Y. S. K.. Hi. Everybody Holly Fry here listen my friends from headcount just wanted to make sure that everyone knows that September twenty second is National Voter Registration Day twenty twenty has come with a lot of uncertainties, but you can make sure you're all set for election day by registering the vote checking your registration or requesting an absentee ballots. Don't worry our friends at headcount dot org have made it easy and they are nonpartisan. So they want everyone to make sure that they are registered and that they are ready to vote come election day to get your. Information just text the word voter, two, four, zero, six, four, nine, or visit headcount dot org for more INFO and headcount can walkie right through registration. If you're already registered, they would love it if you would take their me plus three pledge. So make a plan to vote and then get three friends to join you and if those friends are registered heads headcount dot org with them and make sure that they do get registered it takes two minutes to do this but it has a huge impact. Don't wait registered today and vote on November third. So, there's a there's one thing that that like you said, they liked to shoot a hole in Sutherland's theory that. Or. They say is definitions too broad because he did include behavioral it's not illegal, but it's a very legitimate point to say you kind of have to because if not then we wouldn't have had the Sherman antitrust ex we wouldn't have had the Clayton Act have had You know the FDA, all of these things that that W- The carriers case he would have gotten off Scot free well, he did was not illegal so. It has to evolve over time agreed. Okay. And it has agreed. So let's talk about I. Guess The impacts of today's modern. White collar, crime. I was like man that was suspenseful. All of a sudden thanks Yeah. We've talked about a few of these about seemingly not having victim but what happens is you rip off a huge corporation, they'll raise the prices. There's another ripple effect we talked about cutting jobs. To meet the needs of the investors of it's a publicly traded company right when their stock fraud committed insider scandals like Enron, are going to ripple out oh, my rule out the stock market 'cause like you know basically cause people to be unsure and have no faith in the stock market on the said Yeah that's dangerous. Yeah. Think about all the people who lost everything I know. Oh God I get. Yeah I get just as angry if not more angry at something like that then. You, know some heinous crime Yeah, it's an equal. Yeah. They're both scumbags. Okay. So. You said like in seventy four, the FBI I started they. That's when they've created this white collar crime. Division. So, apparently like teen seventy four. Yes and it was a response like this University of Michigan's survey that they conducted between Nineteen Fifty, eight, I think in nineteen, seventy, three, they found that people who said that they trust the federal government went from seventy three percent to thirty, seven percent and then. Time between nineteen, Fifty, eight and nineteen seventy three mile yeah flip-flopped. Talk see that over that time period, the sixties. Yeah. One of the big ones was just like fraud and corruption at high levels, and so the FBI created this white collar crime thing. One of the other things that differentiates white collar crime from regular working class crime. Is the. Ability to police it right you walk into a room, and there's some guy weighing out cocaine. He's a criminal. Yes. You walk into a room and there's some guy on a computer doing a pump and dump scheme who knows the average cop is equipped to detect this kind of crime and as a matter of fact, even very very well, trained cops aren't typically equipped to detect this kind of crime. One of the hallmarks of white collar crime is that it's very difficult to prove. Yeah. It's very difficult to uncover and it's also difficult to prosecute. Yeah, and there's no smoking gun there's no paper trail or there may be a paper trail, but it's Probably Electronic Fide. Sure. So, it's a little harder to follow. You GotTa really you know you got to have people that know what they're doing right? That's why the FBI created that division and I guess they're doing a good job but. It's Kinda hard well the Justice Department has been going after white collar crime lately under Obama Pretty hard here there and then the Sarbanes Oxley Act. Definitely step things up and he sounds as you say too much. Yeah I. Mean I've had comply with this at various when I worked in the film minutes USC production companies had to. Like jump the way more hoops paperwork because sarbanes-oxley. Yes. Do, you want to talk to you. I tell well, it's it. It was in two thousand and two, and it was to improve corporate governance which is. Basically accountability. Between Corporation. The stakeholders what amounted to was a lot more. Paperwork. Essentially. Right. More proving of numbers and showing numbers. Jumping through hoops and it was a direct reaction from of the fallout of Enron, the followed of Enron, Tyco and like all the other companies around that time But one of the other things that did chuckers was AH quadrupled. Sentences in a lot of cases for white collar crime. So now you have guys like Bernie madoff getting one hundred and fifty years. There's a guy named Scholem Weiss who was involved in like the breakup of some insurance company he got eight hundred and forty five years while he gets out in twenty, seven, fifty, four, I don't think he's GonNa. See I I don't either but I mean the guy named rich harkness got one hundred years for thirty nine million dollars Ponzi scheme like these in all of this is like post Sarbanes Oxley except Scholem Weiss which is really saying something but he still got that yeah but I mean like so now now sentences are like quadrupled. It's like well. Wait a minute maybe maybe this is a little too much like just retribution on the rich it is, and that's kind of I think y a lot of people are having a hard time feeling bad for ridiculously wealthy people who were huckster tres and fraud or people who bilked people out of their retirement accounts. It's tough to feel sorry for him BA legally speaking it's like. Well, wait a minute you're worried about the guy is still a thousand dollars out of a till right being treated differently from the Guy Stole a thousand dollars from investor. Now it's flip flop to how is that? Any better? Exactly one of the arguments for these kind of things is that these people are. Traditionally. Historically have been treated differently because they look like the judges that are sentencing them. Yeah and so judges historically like really have taken it easy on them. Yeah. Let's go and just call them white dude's okay but they also have been You can make the case that they are usually first time offenders. They're usually family people That's that's something that the judge put out there. This is a family man. He's not much of a flight risk. He's probably never going to do this again as he a danger to society. Yes. He didn't use a weapon. Yeah, which is a huge huge differentiation. Yeah, and so sentences typically typically been light but You can. You can also kind of say well, you know where where it feels like we haven't quite felt it out like we've traditionally ignored white collar crime. Now, we're really sticking it to them. Well, it's that whole argument with prison is it like punishment for a crime done or is it rehabilitating a person who has a problem with crime? Well, within eight hundred, forty, five year sentence. Making an example out of that person here because since you can't police it another way to prevent it is to send a message through the courts like you do this man, you're going to prison for a long time. Yeah. I don't know if that's such a deterrent though for some of these people, I don't know. I mean think about it twenty years in a in a federal you say club Fed is not around any longer. Yeah. True and I mean this is like twenty actual years. some guy named Thomas petters recently got fifty years and he will spend forty years in jail and he's fifty two and he will probably die in prison. Now that's a big deal with somebody who's like maybe I shouldn't do this insider maybe I should let fifty grand just walked by because it's not really worth it. Well, something like that talking about the ones who are getting rich by the tens of millions of dollars you know what I wanna see is that these people don't get out of prison and still have all those millions of dollars. Yeah. Like hidden and different foreign accounts and offshore islands and Like the financial part is what really bugs me I meant to. I didn't get a chance to look up and see if any of the Enron. Victims and employees wherever repaid or if they were just Sol. I'm under the distinct impression they were. Sol. Really because the company was in such bad shape that even dissolving it in and just letting me. Do. I think some people did get some money. Yeah. But I don't think it was anything approaching what they lost. Well, whoever commits he's crimes gets out of jail and they have two pennies to rub together then the two pennies more than they should have I think well, that's the thing like so the government started prosecuting under the Rico Act, the answer's the. Same thing they bust up mafia organizations with and they've been fighting while white collar crime with that and one of the things about the Rico Act as it allows states and individuals who are harmed to sue for up to three times. The damages. Yeah. But even then all they have to do is say, yeah, I don't have that money give me. It's true. Can't pay it. No, it's true. The like in the mail off case the guy who's who was assigned to basically get money back for investors has gotten. I don't remember how much made off Fleece was. The guys managed to get like six billion back. Oh really. Yeah. He's done a really good job of getting the money back and that's just a that's that's an example. It's not. But it's it's something pretty significant. You're still going to get email wasn't eight billion. I'm looking forward to the ones where it's like, Hey, man, we don't listen to you for free to hear your opinion about plants. All right. Let's move on to other countries. things are different all over the world. Obviously when it comes to big business and business dealings, Western Europe has followed right behind the US most wholeheartedly with laws to prevent corruption, Eastern Europe coming on board little slower But then you go into other countries like in western Africa and. It may be customary to. Grease. Palms. To get a deal going right or an India where apparently if you're a truck driver, you're going to have to bribe people to keep your rig on the road, and that's just how it is their right and not only is it customary is frequently legal. Yeah Russia. Bribes all over the place. You WanNa Lane contract. You might have to bribe somebody. So if you're a multinational corporation is tough. Headquartered in America yeah. Yeah you have like a real problem facing you especially like I said, the Justice Department under Obama's been prosecuting white collar crimes and going big time after people under the Foreign Corrupt Practices Act, which says, if you're an American company, you can't engage in bribes even legal in that country will. Good. But what's the point like why Hamstring? American. Business. Abroad Yeah exactly into help this out actually. There has been a unified. Committee called company I'm sorry committee called Transparency International and they are out to get rid of corruption and to unify business business ethics all over the world right, and that's that's the reason that you hamstring American business is basically saying Hey we can take the hit in the hopes of pressing the rest of the world into the same clean up their act competitive. Laws we have here in the states that work very well. So good luck to them. That's it. Man I got nothing else? No we should We should play this out with The talking heads big business. Okay. Agreed okay. So chocolate see. If people WANNA learn more about white collar crime. I would strongly advise them to go read this article by J. McGrath. Able jump in. There's a simpsons referenced in the way to go Jane You can type in white collar crime in the search Bar Dot Com which frendo brings up. Listener. Right. Josh I'M GONNA call this Off The presses could cause. I'm. Okay Chuck Ingestion Jerry you. WanNa say thank you for all the hours of listening and my brother chasing. I've been listeners nearly as long as he has been making him. It was even when New Year's Day where all we would do was listened to your hangover podcast repeat. I don't know if that's good for a hangover. Yeah. it's funny and informative, and I always feel like calling my brother after listening latest episode I'm writing you because it's recently his birthday. He's the best brother in the world and downright awesome human being would mean a lot to me if you could tell. The stuff you listeners about his latest project. When his friend Jim survived cancer, he told chase that he gained strength in the music he loved over two years two, hundred, twenty, six. Hundred tracks. Hundred and twenty, six hundred. Two weird way to put it. That be. Two, hundred, twenty, six, hundred, would that be? How many two, hundred and twenty, six, hundred That'd be twenty, eight hundred would it or twenty two, hundred? No twenty, six, hundred, plus two hundred is twenty, eight hundred. Nearly two hundred artists. Persons. Insane. No. She's not. Over two years two, hundred, twenty, six, hundred tracks nearly two hundred artists from other countries all over the world have allowed them to share that message they are releasing their second compilation disc. Electronic Saviors. Colon industrial music to cure cancer. So it's these artists, compilations are putting together catching apparently two, hundred, twenty, six, hundred track. they are registered. US. Charity and all proceeds go to cancer research and if you want if you're into electric music. And if you want to support cancer research. You can go to www dot `electronic saviors dot. com. And that is something chases got going in and sister Laura Dudley. is a big fan of her broke. He sounds like a swell guy. I'm, for it. Those. Kennedy answer we'd have promoted 'cause chuckers we tried to do that. You think. Yeah. We always want to hear about good causes. So you can get in touch with us. Let us know about yours. We'll try our best to let everybody else know about especially people can support it greet Let's see. Also enjoy a little talking heads big business from the live album stop making sense release to nineteen eighty-four. We're sure it's up on Amazon and elsewhere You can get in touch with us. It S why S. K. podcast on twitter you can go to facebook dot com slash stuff you should know and you can send us a regular old email to stuff podcast at how stuff works dot com and as always join us at our home on the web stuff you should know dot com. Stuff you should know is a production of I heart radio. How stuff works for more podcasts my heart radio, visit the iheartradio APP apple podcasts or wherever you listen to your favorite shows. Hello friends. This episode is brought to you by six digital workspace company citrus creates technology that gives you time back. So you can focus on what matters they're. So into saving time, they have crunched a full minute message into thirty seconds. Now, you can have more time to think about the important things like are you finally going to remember to water those plants after work? Anyway, thanks for the time said tricks there's a new world of work being built. Cedric invites you to see it at six dot com slash stuff. It's no secret that in Washington DC corruption is everywhere and I should know. My Mom's the speaker of the House. My friends are all on the same boat daughters of the DC elite. When you're this close to power, there's nowhere to hide. But. In here no one knows me as James Parker. The only know me as storm alloy. You See. I'm a bit of a hacker. Join me and my friends for daughters of DC. A new twelve part scripted podcast political thriller from the team that brought you lethal lit Einhorn's EPA productions and iheartradio listened to see for free iheartradio apple podcasts or wherever you get your podcasts.

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