Research Paper on "Exercising Discretion and White Collar Crimes"

Research Paper 10 pages (2897 words) Sources: 10 Style: MLA

[EXCERPT] . . . .

discretion in relation/emphasis to white collar crimes. The paper represents a useful and practical source for fraud examiners and other white collar crime investigators. The paper needs to examine arguments for and against the uses of discretion by white collar crime participants and/or victims.

One of the issues of white-collar crime is the issue of Prosecutorial discretion. Prosecutors who dabble with white-collar crimes have great scope of discretion in that they can determine whether to bring a criminal case and which issues to quote if they do indict. The nature of the white collar statutes often cedes discretion to prosecutors. This is because they may be seen to overlap into the area of civil, rather than criminal, interest and are therefore seen by many as encompassing economic regulations that fall within the perimeters of civil enforcement. Critics see this as an unjust and partisan system, whilst supporters see it as being blessed with flexibility rendered by cautious and rational prosecutors, and checked by presiding judges . The issues, back and forth about the fairness or unfairness of the discretionary system, are febrile and ongoing. Suggestions such as inquisitorial trials (with jury assessing prosecutorial decisions) have been suggested, but none have been taken seriously. It is likely that the issue will not be so readily solved since prosecutorial discretion has been an entrenched and accepted part of the criminal justice system ever since the beginning and will likely remain so in the future. The best one can do is monitor prosecutorial decisions with presiding judge, and this is what is being done at the moment.

2. Introduction

White-collar crime, as distinguished from common crime in that it is generally perpetrated by people (or corporations) of higher status and is a more genteel sort of crime, falls outside the jurisdiction of criminal penalty. Rather, it is judged by a system of prosecutorial discretion where prosecutors practice flexibility and arbitrariness in deciding whether or not to inculpate the individual and, if so, what his or her penalty should be.

Some see prosecutors, consequently, as having "more control over life, liberty, and reputation than any other person in America" and as performing "the role of god." (Moohr, nd). The reputation of prosecutors has particular raised since the 1980s when a string of scandals such as the Enron affair, results in prosecutors putting new laws into action for protection of the public. One of the laws, at least in this case, was the Sarbanes-Oxley Act. The Act augmented the position of prosecutors by inventing a new caliber of crimes, enhancing sentences of existing crimes, and introducing a string of Congressional directives. In this way, prosecutors are seen as doing a good thing. They recognize the distinction between the common criminal case and the white-collar act, and treat it accordingly.

At the same time, however, some fear that these prosecutors may be too omnipotent and that their power may cause them to be partisan and biased. The general topic of prosecutorial authority concerns many, particularly when we are talking about an incompetent prosecutor who treats the white collar offender more deferentially than he should be punished.

The following essay analyzes both opinions and concludes by assessing future directions on the topic.

3. White Collar Crime Discretion

In order to talk about prosecutorial discretion in white collar crime, we first have to define the concept of 'white collar crime'.

The earliest known definition of white collar crime was formulated by Criminologist and sociologist Edwin Sutherland first in 1939 who defined it as crimes "committed by a person of respectability and high social status in the course of his occupation." (Strader, 1999).) Included in this definition were crimes committed by corporations and other legal entities. Sutherland posited that white-collar crimes have a greatly underestimated impact on our society.

Sutherland's opinion of white collar crimes changed in the latter half of the 20th century, as observers noted that crimes that we generally consider white-collar, such as securities fraud and tax fraud, are perpetrated by people of divergent backgrounds. Although, therefore, a misnomer the term is still used, probably because people use it to differentiate this type of 'meeker', more genteel type of crime from common crime. In fact, in 1988 the United States Department of Justice described white collar crime as such as consisting of:

nonviolent crime for financial gain committed by means of deception by persons whose occupational status is entrepreneurial, professional or semi-professional and utilizing their special occupational skills and opportunities; also, nonviolent crime for financial gain utilizing deception and committed by anyone having special technical and professional knowledge of business and government, irrespective of the person's occupation. (Bureau of Justice Statistics, 1981).)

This, according to the white collar crime prosecutor or defense attorney would however be still too narrow. They would define white collar crime as:

(a) Not necessarily involving force against a person or property;

(b) Directly relating to the possession, sale, or distribution of narcotics;

(c) Directly relating to organized crime activities;

(d) Directly relating to such national policies as immigration, civil rights, and national security; or (e) Directly involving "vice crimes" or the common theft of property (Strader, online)

A recent example, therefore, of a white collar crime was that committed by Neil Armstrong who was accused of doping on narcotics in order to win his bicycle races. He was acquitted

4. Public perception of white collar crime

White collar crime is not as 'white' as erroneously labeled. In 1988 a string of white collar crime befell he nation committed by powerful corporations and the United States Supreme Court declared that white collar crime "is one of the most serious problems confronting law enforcement authorities" (Braswell v. United States, 1988).). This is because it causes grievous and endurable harm as well as huge financial losses to federal, state, and local governments, to private organizations, and to individuals.

Some stories will illustrate the impact. The 1980s was the era of corporate scandal, and one of these was the phenomena of corporate insiders trading on secret information to the detriment of ordinary investors who lacked access to that privileged information. In the late 1980s and early 1990s, too, the savings and loan industry collapsed largely due to individuals and companies that engaged in fraudulent accounting activities. Thousands of people became poor as a result, and jobs closed. In 2002, Wall Street experienced accounting scandals and many lost their retirement accounts and their entire life's savings. And the list continues. White-collar crime still continues to this day on a regular basis.

Unfortunately, white collar crime is very difficult to detect. In this way, too, it may be arguably worse than common crime. White collar crime is perpetrated in the privacy of the home or the office, usually with very few others knowing and no 'smoking gun' left to reveal the details. Proof comes instead from an intricate and complex paper trail. Secondly, the sheer scope of energy and time invested in unraveling and dealing with investigating white-collar crimes can last months, if not years, and the government often lacks the energy and resources to do so. More than one office has to be involved, and so, frequently, white-collar crimes become submerged by lack of attention.

5. Defining Prosecutorial Discretion

One of the issues of white-collar crime is the issue of Prosecutorial discretion. Discretion is defined as the decision maker's freedom to distinguish between two or more courses of actions and the freedom to decide whether through rules or one's judgment, to act or not to act. The exercise of discretion is also based on perception, and individuals vary in their perception of the extent they can take discretionary action.

Prosecutors who dabble with white-collar crimes have great scope of discretion (and 'play god' as Moohr (nd) said) in that they can determine whether to bring a criminal case and which issues to quote if they do indict. The reason that this is so flexible is due to several facts:

1. It is not so clear that criminal accusation can be brought. The prosecutor may decide that the defendant's actions can be addressed by civil remedies. In this case, the prosecutor will change the nature of the case from criminal to civil.

2. Some cases can involve parallel state and federal criminal proceedings. In this situation, the prosecutor has to decide whether additional criminal penalties for the same conduct are in order. A prosecutor may also decide to hold a parallel proceeding if there is no state or federal law prohibiting such a proceeding.

3. Some states prohibit a prosecution where the defendant has been tried to a verdict in state court

4. The prosecutorial agency may have polies regulating the issue, for instance the United States Department of Justice has a policy against a follow-up federal prosecution unless such a prosecution is utterly necessary to remediate a substantial federal interest

The nature of the white collar statutes often cedes discretion to prosecutors. This is because they may be seen to overlap into the area… READ MORE

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