Analysis of the Changing Spectrum of Economic Crime - Coursework Example

?  Profile and Analyze the Changing Spectrum of Economic Crime al Affiliation) The following paper would fundamentally highlight the Chinese economic crime committed potentially in the past as well as some recent ones. This particular paper would precisely lay emphasis on how and why these crimes are mostly committed with specific motive on every example that is potentially stated in this parenthetical thesis. We would take note and account for the every aspect that links the crime to its target and seek out all factors for instance cultural, economic or even personal to make sure that the crime committed was a repercussion of any act that preceded the earlier actions of the criminal as well as the victim. Ideally with the appropriate research we would also try to lay specific emphasis on profiling all the criminal activity that took place in the incident and how it fundamentally affected the economic culture surrounding it. Profile and Analyze the Changing Spectrum of Economic Crime As fundamentally stated in The New York times Asia pacific section “The catchall term “economic crimes” is frequently used as a legal cover by police officers who wish to detain or imprison someone whom Communist Party officials consider a political threat. Such crimes can include prosaic failures to properly comply with regulations on business registration or taxation.” (The New York times Chinese Defend Detention….). These kinds of specific situation have recently been on frequent terms observed in the economic culture of China and as such are a cause of great concern for the economic Asian giant. To be technically precise China is the most powerful economic strength in the world today but even so economic crimes of any measure are the first step towards the collapse of a country’s financial assets. Another reason for an economic crime is bad economic policies by the government itself, on the part of China it can presumably be told that most economic crimes associated within the Chinese fortification is due to the government imposing inappropriate limitations on the private sector and hence emerging corporate business has no choice but to turn to an unfair policy that potentially helps him benefit in this part of the world. With the introduction of newer technology the spectrum of economic crimes is changing. People and organizations are involved in newer kinds of crime every day and types of crime that fall under the category of economic crime are increasing day by day. They are able to find loopholes in the law and able to exploit these loopholes to their advantage. With faster communication economic crime has become more organized. Unlike the blatant act of crime committed by the Georgian legislators nowadays people are committing economic crime that can be concealed and the law authorities often take years to uncover a crime that was committed long ago, long after the thief may have died. Some people like Jonathan James do it for fun and take the breaching of someone else’s computer system as a challenge. Others like Charles Ponzi do it for personal gain. Some people like Pablo Escobar made it their business and their crimes were well organized. Whilst internet has helped mankind in many ways it has made the committing of economic crime very easy for people. With so much information available on the internet such as people’s social security numbers, credit card details and bank details chances are that sensitive information may fall into the wrong hands and that information may be used for someone’s own personal gain. Economic crime is here to stay. With more technology, faster communication and more knowledge available to criminals they are able to commit more and more of these crimes, cause more and more loss to the public and economy (65 billion Ponzi scam that affected as many as 1300 investors) and elude capture from the authorities. There is also some very active political situation regarding such an issue stated earlier with reference to the New York times article of the Asian Pacific section that whenever an economic giant such as China come to tackle any of its economic hurdles that could potentially turn the country’s financial into turmoil major international competitors such as the US proclaim and accuse of their policies to have a hidden motive and create an illustrious propaganda diminishing their economic credibility while all the more starting an international incident to disturb any incoming investments. Let’s take an active example of how, as quoted in the paper Economic crimes in China and US paper by (Jacob G. Hornberger) that “The U.S. government is criticizing the Chinese government for one of the communist regime’s favorite tactics: using “economic crimes” as a legal cover to prosecute, convict, and incarcerate people who are actually guilty of political crimes. The latest instance involves Chinese celebrity artist and social critic Ai Weiwei, who is being held on suspicion of violating “economic crimes.” With such an outbreak looming in the scenes it is merely not advisable for the Chinese government to hold onto people who mediocrely hold any potential threat to the states credibility while corollary action is required by the state and due to this the Chinese government is forced to release legit economic crimes into the market themselves who were previously alleged in making economic crimes as quoted by the China.org.cn that “China's newly revised Criminal Law has removed 13 offences from the list of 68 crimes punishable by death, according to the annual work report of the Supreme People's Court. It was the first time the People's Republic of China has reduced the number of crimes subject to the death penalty since the Criminal Law took effect in 1979.The 13 crimes were economic-related non-violent offences, including smuggling cultural relics, gold, silver, and other precious metals and rare animals and their products out of the country; carrying out fraudulent activities with financial bills; carrying out fraudulent activities with letters of credit; the false issuance of exclusive value-added tax invoices to defraud export tax refunds or to offset taxes; the forging or selling of forged exclusive value-added tax invoices; the teaching of crime-committing methods; and robbing ancient cultural ruins. The court is expected to introduce a unified guideline over the use of the death sentence soon. At present, the vast majority of immediate executions are imposed for the most serious offences of either aggravated murder or large scale drug trafficking, the report said. Courts were told on Tuesday to pronounce a two-year suspension of execution for condemned criminals if an immediate execution is not deemed necessary. Such sentences are generally commuted to life imprisonment after a two-year period if the convicted person is of good behavior and has not committed any other crimes. The Supreme People's Court (SPC) said, in the report, that death penalty should only be applied to "a very small number" of criminals who have committed "extremely serious crimes." Under the policy of "justice tempered with mercy," capital punishment reprieves should be granted as long as they are allowed by law, the Supreme Court said. China has been reforming its death penalty system since an amendment to the Criminal Procedure Law in 2007 made the Supreme People's Court the only authority to have final approval of all death sentences. The Supreme Court has overturned 10 percent of all death sentences nationwide since 2007 when it took back the right of final review from lower courts.” (China.org.cn) The dynamics of economic crime have been completely changed due to faster communication methods. Money laundering enables concealing of illegal funds (acquired through smuggling, human trafficking, bribery, arms sales and many more such illegal activities) through their untraceable movement and subsequent investments into legal activities. There have been many famous money laundering cases in history (Vaknin 2001). One of the most famous criminal who indulged in money laundering was Pablo Escobar. Escobar’s main business was of drugs most important of which was cocaine. He needed some way to launder the money and convert all the black money he received from illegal drug trafficking into white money. He would bribe regulators so they would not interfere with his business and he used to bribe bankers to bring him his money. Escobar continued money laundering till the very end of his life in 1993. There have been many famous personalities and institutions that were involved in money laundering. These included: Sani Abacha, Nigeria’s military dictator, President Suharto from Indonesia, Asif Zardari, President of Pakistan and the scandal involving the Bank of Credit and Commerce International (BCCI) in the 1980s are just some examples money laundering that involved billions of dollars in money laundering (10 Most Notorious Money Laundering Cases of the 20th Century 2011). Comparing this to another similar example we might come across something common to establish any particular claim and hence In the year 1795, all the members of the Georgian government except one voted to sell a piece of land (Yazoo) over an area of 35 million acres to four companies for a meager amount of 0.5 million dollars. All the members except the one who voted against the deal accepted bribe in exchange for their votes. This was one of the most corrupt financial scandals to occur in American history at that time. When elections took place again all the guilty legislators were thrown out of office and the deal that they had struck with the four companies was deemed to be void. This piece of land was later sold back to the government, in 1802, for 1.25 million dollars. However some time later the Court decided that despite all its flaws, the deal struck in 1795 was a legal one and the companies received over 4 million dollars in compensation (What Are the Biggest Financial Scandals in U.S. History? 2008). The idea of sharing this financial scandal is to illustrate the fact that economic crime has existed for a long time. However, over the years it has evolved. In the past due to less knowledge and fewer methods of crime known to people, thieves like the Georgian legislators would commit blatant acts of corruption and get away with them. In the present this has completely changed. People nowadays are exploiting the loopholes in the law and using innovative ways to commit economic crime and get away without punishment. It has happened in the past that many financial scandals were uncovered many years after they had occurred. There are many crimes and frauds that fall under the category of economic crime. Some of these include money laundering, credit card fraud, identity theft, Ponzi schemes, racketeering, tax evasion and many more. With the ever changing technology and introduction of newer and faster methods of communication more and more economic crimes are taking place nowadays. In 1918 a man named Charles Ponzi committed an economic crime that was later (and still is) known as the Ponzi scheme. In those days every letter that was sent abroad used to contain an international reply coupon (IRC). The purpose of the IRC was that it allowed the person receiving the letter to pay for the postage to reply. The price of the IRC was different in the country of purchase from the country the IRC was redeemed in. As the prices were different in two countries there was great potential for earning profits. At the end of World War 1, inflation had reduced the price of IRC in Italian currency as compared to the US dollars. As a result a person could buy the coupon cheaply in Italy and then exchange it with the more expensive US stamps. Ponzi calculated a high net profit margin once the transaction had taken place and expenses had been taken into account. He persuaded investors to invest in his speculative scheme on IRCs and promised them a return on investment of 40 percent within 90 days. This offer was too good to be true as banks only offered a 5 percent return. Hence investors flocked to invest in his scheme. Within months Ponzi became a millionaire and what was more interesting was that people were receiving his promised return on investment during the specified time. Although this looked like a legal scheme but Ponzi was not investing any money of his own. He was just paying the older investors with money received from new investments. There were suspicions about this scheme in the people’s minds as they were surprised that how a penniless person like Charles Ponzi could become a millionaire so quickly and how was he able to provide ridiculously high rates of return. These suspicions were further raised when observers noticed that there were not enough IRCs floating in the market for Ponzi’s scheme to work. When the scandal broke out in 1920, by that time Charles Ponzi had become the Warren Buffet of his time (Who was Ponzi—what the heck was this scheme? 2008). Estimated losses amounted to approximately 20 million dollars in total which are estimated to be worth in excess of 220 million dollars according to current dollars. After this famous incident people refer to all schemes that pay new investors from old investor money as ‘Ponzi schemes’. The biggest Ponzi scheme was planned recently by Bernard Madoff. Approximately 65 billion dollars were lost by investors in this investment scam. The curtain from Madoff’s bogus scheme was lifted by the recession that caused investors to pull out their investments. However Madoff was not able to provide the 7 billion dollars demanded by investors and he was handed over to the law authorities by his own sons in 2008 and was sentenced to 150 years in prison in 2009 (The Greatest Financial Scandals). This Ponzi scheme is the biggest scam in American history. As many as 1300 investors were victims of this scheme including Kevin Bacon and Steven Spielberg (America’s 10 most famous fraudsters 2009). References: http://www.nytimes.com/2011/04/08/world/asia/08china.html The New York times Chinese Defend Detention Economic Crimes in China and the U.S. by Jacob G. Hornberger http://www.fff.org/blog/jghblog2011-04-25.asp Economic crimes spreading beyond China's borders: Ministry http://news.xinhuanet.com/english2010/china/2010-11/19/c_13614262.htm Corruption, Economic Crime and Social Transformation since the Reforms: The Debate in China Richard Levy The Australian Journal of Chinese Affairs No. 33 (Jan., 1995), pp. 1-25 Economic Crime: Theory - Classical Approach To Crime, Neoclassical Or Economic Approach, Advantages Of The Neoclassical Approach, Problems With The Neoclassical Approach http://law.jrank.org/pages/1055/Economic-Crime-Theory.html (2008). What Are the Biggest Financial Scandals in U.S. History? Retrieved from http://hnn.us/articles/880.html (2008). Who was Ponzi—what the heck was this scheme? Retrieved from http://hnn.us/roundup/entries/58755.html (2011). 10 Most Notorious Money Laundering Cases of the 20th Century. Retrieved from http://poempunch.com/famous-money-laundering-cases--thread-reply-569.aspx America’s 10 most famous fraudsters. (2009). Retrieved from http://business.rediff.com/slide-show/2009/jul/04/slide-show-1-top-ten-us-fraudsters.htm Erin, R. (2009). 10 Bizarre Cases of Identity Theft. Retrieved from http://listverse.com/2009/09/05/10-bizarre-cases-of-identity-theft/ Pollock, E. J. (2002). The pretender: How Martin Frankel fooled the financial world and led the feds on one of the most publicized manhunts in history. New York: Simon and Schuster. Potter, Ned. (2009). Top 5 Famous Computer Hackers: From Conficker to the First Computer Virus. Retrieved from http://abcnews.go.com/Technology/story?id=7230601&page=1 The Greatest Financial Scandals. Retrieved from http://images.businessweek.com/ss/09/03/0311_madoff/2.htm THE INDUCTEES: Martin Frankel. Retrieved from http://www.thehallofinfamy.org/inductees.php?action=detail&artist=martin_frankel Top 10 Most Famous Hackers of All Time. Retrieved from http://www.focus.com/fyi/top-10-most-famous-hackers-all-time/ Vaknin, Sam. (2001). Money Laundering in A Changed World. United Press International Read More