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Unformatted text preview: Occupational Crime and Occupational Crime and Avocational Crime
White Collar Crime
CRJU E491W Fall 2011
William C. Smith A Distinction
A Distinction The term “occupational crime” refers to offenses committed within the context of a legitimate occupation and specifically made possible by that occupation.
The term “avocational crime” refers to offenses that are committed not so much within the occupation of an offender as in some “peripheral,” or collateral, area associated with the offender’s occupation or in violation of the trust that is generally afforded the offender’s occupation. Examples might include an attorney engaging in tax evasion or a physician engaging in health insurance fraud by overbilling. Crimes by Businesses
Crimes by Businesses Crimes by small and large businesses include retail crime and service fraud.
Offenses generally occur in the form of deceptive and illegal business practices, such as the following: Misleading advertising, Illegal pricing practices, Misrepresentation of products, Adulteration of products, Shortweighting, Concealing food spoilage, Unsafe food handling practices, and Diluting substances such as drugs. Defrauding Vulnerable People
Defrauding Vulnerable People Immigrants, the poor, and the elderly are especially vulnerable to white collar crimes committed by small businesses.
Some unscrupulous practices include maltreatment of elderly residents in nursing homes, overcharging consumers for products in the wake of natural disasters, and offering prepaid burial plans to senior citizens with the assurance that buying such coverage will alleviate concerns for their families at the time of their death. Service Business Fraud
Service Business Fraud Auto Repair Scams This problem can occur when a shop provides a very reasonable quote when the customer’s car is dropped off, but no written estimate is given. At the end of the day, the consumer finds that the shop has raised the final bill with the explanation that mechanics found additional problems with the vehicle.
The scam can also occur where an auto repair firm bills a customer or insurance company for repairs that either were not made at all or not properly or completely made. Crimes by Professionals
Crimes by Professionals The professions, including medicine, law, academia, and religion, are another source of occupational crime.
Medical crime is committed by people in the medical profession, such as physicians, psychiatrists, and dentists. The offenses may, typically, be viewed as constituting violent crime (e.g., performing unnecessary operations, tests, and other medical services) or fraud (overutilization of services, false and fraudulent billing, fee splitting), which costs billions of dollars every year. Legal Crime
Legal Crime Legal crime is committed by lawyers and generally involves fraud (overbilling, excess billing, stealing from colleagues or clients) or collusion (activities that aid the crimes of their clients).
Often, the offenses committed by lawyers result in the attorney’s being sanctioned or disbarred by the state organization regulating lawyer conduct, as well. Academic Crime
Academic Crime Academic crime is committed by professors, researchers, and students, and chiefly involves various types of fraud, including plagiarism.
Academic crime may also result, in addition to criminal charges, in institutionally imposed discipline forthe offenses committed, such as dismissal. James B. Holderman
James B. Holderman Holderman was elected President of U.S.C. by the board of trustees in 1977.
Holderman was given credit for the creation of the U.S.C. Honors College and the Carolina Plan, but his lavish spending came under scrutiny.
A journalism student, upset with tuition increases, requested that Holderman release the salary of visiting professor Jihan Sadat, the widow of Anwar Sadat, former President of Egypt. Holderman refused and the ensuing scrutiny of university secrecy ultimately led to Holderman’s resignation in 1990 based on overwhelming evidence of financial irregularities and his extravagant spending. Student Academic Crime
Student Academic Crime Although academic crime is most often linked to acts committed by professors and other academics, students may also become involved in academic transgressions that may lead to criminal charges.
The most common examples involve students who commit plagiarism or engage in other dishonesty in an effort to gain an academic or financial advantage. Religious Crime
Religious Crime Religious crime, committed by clergy members in various faiths, consists largely of defrauding believers by using donations or offerings for corrupt purposes.
Religious crime may also be seen in the exploitation of a position of trust in order to engage in child molestation. The PTL Club The PTL Club The PTL, or “Praise the Lord,” Club, was founded by Jim Bakker and his wife, Tammy Faye Bakker, in 1975 near Charlotte, N.C.
The club, an evangelical television outreach program, grew quickly and was carried by nearly a hundred stations, with an average viewership numbering over twelve million. PTL solicited donations from viewers to support the club’s outreach activities and to fund the building of Heritage USA, a Christian theme amusement park near Fort Mill, S.C. PTL's fund raising activities were PTL's fund raising activities were scrutinized by The Charlotte Observer, eventually leading to criminal charges against Jim Bakker.
Bakker sold $1,000 “lifetime memberships,” which entitled buyers to a threenight stay annually at a luxury hotel at Heritage USA. According to the prosecution at Bakker's fraud trial, tens of thousands of memberships had been sold, but only one 500room hotel was ever completed. Bakker sold more “exclusive partnerships” than could be accommodated, while raising more than twice the money needed to build the actual hotel. Much of the money went into Heritage USA's operating expenses, and Bakker kept $3.4 million in bonuses for himself. Bakker was indicted in 1988 on eight counts of mail fraud, 15 counts of wire fraud and one count of conspiracy.
In 1989, after a fiveweek, the jury found him guilty on all 24 counts, and he was sentenced to 45 years in federal prison and a $500,000 fine. The prison sentence was later reduced to eight years. Avocational Crime
Avocational Crime Avocational crime refers to offenses that are committed by an offender in some “peripheral,” or collateral, area associated with the offender’s principal occupation. Case Study:
The Toxic Pharmacist
White Collar Crime
CRJU E491WFall 2011
William C. Smith Robert Courtney
Robert Courtney After graduation from Pharmacy School in 1975, Robert Courtney went to work for Research Medical Tower Pharmacy in Kansas City, Missouri, where he was soon made manager.
In 1986, Courtney purchased the pharmacy and soon bought another store. Courtney operated a compounding pharmacy as an independent pharmacist. Independent pharmacies seldom generate the revenue amounts that chain pharmacies generate.
Beginning in 1990, around the time of his first divorce, Courtney started buying “gray market” drugs and using them to fill prescriptions at his pharmacies in order to make more money, and also sold generic drugs at brandname prices. Drug Diluting
Drug Diluting Also, in the early 1990s, Courtney began the lucrative practice of mixing chemotherapy drugs for physicians in the Research Medical Tower.
Courtney quickly realized that he could make large amounts of profit by “diluting” the expensive chemotherapy medication he was compounding. Getting Caught
Getting Caught Courtney’s undoing began slowly when he would not respond to inquiries from pharmaceutical reps about how much of their drugs he was selling.
A sales representative for Eli Lilly believed Courtney was getting the drugs outside of regular channels, but an internal investigation by Eli Lilly did not disclose another supplier.
In 1998, Eli Lilly discovered that Courtney was selling more of its Gemzar chemotherapy medication to the doctors in the Research Medical Tower than he was buying from Lilly, the manufacturer. The Sting
The Sting One of the doctors, Verda Hunter, who regularly bought cancer treatment drugs from Courtney, learned of the Lilly discovery and became alarmed. She decided to have one of the prescriptions for Taxol, a drug used to treat breast cancer, lung cancer, and ovarian cancer, tested. When the test results revealed that the drug was diluted, Dr. Hunter notified the F.B.I. and F.D.A., who reviewed the test results on July 27, 2001 and persuaded her to participate in a “sting” operation. Hunter ordered six more Taxol prescriptions from Courtney. The F.D.A. test results showed that each had been diluted to between 17 and 39 percent of the required dosage. Similar results were found for prescriptions of Gemzar that Hunter also ordered as part of the sting.
On August 13, 2001, federal lawenforcement agents, armed with a search warrant, raided Courtney’s pharmacy and then arrested him. The Plea
The Plea After his arrest in August 2001, Courtney initially pleaded not guilty. In February 2002, however, Courtney pleaded guilty to 20 counts of tampering and adulterating or misbranding the chemotherapy drugs Taxol and Gemzar, in exchange for a federal prison sentence of not more than 30 years. He was ultimately sentenced to serve the 30 years.
Courtney was also fined $25,000 and ordered to pay $10.5 million in restitution and all of his assets were seized. Additional Acts Courtney also acknowledged that he and his corporation, Courtney Pharmacy Inc., weakened the anticancer drugs Platinol and Paraplatin, conspired to traffic in stolen drugs and caused the filing of false Medicare claims.
After he entered his pleas, Courtney further acknowledged to federal investigators that he had diluted additional drugs, including fertility drugs, antibiotics, drugs to prevent nausea and drugs to improve blood clotting. Civil Lawsuits
Civil Lawsuits In addition to the criminal sentence he received, Courtney also lost a civil suit filed by one of the victims of his crimes, Georgia Hayes, and was ordered to pay $2.2 billion.
More than 400 other additional civil suits were filed against Courtney. Collateral Damage
Collateral Damage Eli Lilly and BristolMyers Squibb were also sued over Courtney’s actions; plaintiffs alleging that they were aware of his actions and did not report their knowledge to authorities which resulted in the untimely deaths of many cancer patients.
Between them, the two companies settled over 300 such civil suits for an undisclosed amount. How Could He Do It?
How Could He Do It? We have “blind trust” in pharmacists, don’t check their credentials, or check to see if there have been any malpractice suits filed against them.
The F.D.A. “closed” supply chain is anything but closed and drug companies estimate that 10% of the medication circulating in the supply chain is counterfeit. IMS Health, the organization which tracks pharmaceutical sales, admits that it can only keep track of “roughly 70 percent of all prescriptions dispensed in the U.S.” Different patients respond in different ways to the same medication, with side effects as individual as the patients themselves, so that the absence of side effects was likely seen as a positive by Courtney’s customers. Why Did He Why Did He Do It? What Was the Impact?
What Was the Impact? The FBI estimated that Courtney’s dilutions impacted 400 doctors, 4,200 patients, and up to 98,000 prescriptions. Of the 34 cancer victims specifically mentioned in the charges against Courtney, half died. Besides chemotherapy medication, Courtney adulterated drugs to treat infertility, diabetes, AIDS, multiple sclerosis, arthritis, and other diseases.
In the civil suit against Courtney, a professor of pharmacology testified that receiving a weaker dose of chemotherapy drugs may be worse than receiving no drugs at all. When the drugs are not at full strength, cancer cells can build a resistance to them and become stronger. ...
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This note was uploaded on 02/20/2012 for the course CRJU E491 taught by Professor Mr.smith during the Fall '11 term at South Carolina.
- Fall '11