What are three major areas of cost associated with white-collar crime? How would these costs apply to healthcare fraud and computer crime?  

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In addition to the easily measurable economic costs that white collar crime incurs by defrauding consumers, investors, and governmental agencies, there exist less easily measured but even more damaging long-term effects on society as a result of corruption and fraud. Chief among these pernicious effects is the erosion of trust among citizens toward institutions that are vital to the proper functioning of our democracy and economy. These institutions only function properly when the majority of citizens have trust in them.

For example, when Bernie Madoff defrauded thousands of investors out of their retirement savings in what turned out of be a giant Ponzi scheme, the damage to the net worth of individuals, companies, and charities that invested in Madoff's fund was immense. Yet when the public found out that Madoff had gotten away with his scheme for over a decade, despite numerous warnings from various investors and regulators at the SEC, many individual investors, already wary of the stock market following the Great Recession, came to believe that the entire financial system was rigged by the rich for the rich. Due to this scandal, along with the reckless, greedy behavior of many other major financial institutions at the time, a large portion of Americans pulled their savings out of the stock market when it was near its low, guaranteeing large losses. Many of these same people did not reinvest quickly or at all in the market, and as a result, they did not benefit from the enormous market recovery. Yes, the financial markets were full of bad actors, but the cumulative effect of the numerous investment banking, insurance, and mortgage scandals that rocked Wall Street and the economy as a whole had the effect of scaring off many individual investors who would have made their money back and then some, if only they had felt confident enough in the integrity of the system. By some accounts, the percentage of Americans invested in the stock market today versus in 2007 is actually lower.

An analogous phenomenon is currently at play with the college admissions cheating scandal. Rick Singer, the admitted ringleader of the cheating scandal, helped hundreds of wealthy students and their families to game the admissions system at top universities. This conspiracy of fraud probably denied hundreds of better-qualified students from gaining admission to top institutions such as Yale, Stanford, USC, and UCLA, among others. However, the effects of this white-collar criminal conspiracy will not end with the students who were directly affected by it.

The ripple effects are already becoming apparent. This debacle has convinced many Americans that the college admissions process is fixed. We do not yet know how many students might be dissuaded from applying to top colleges as a result of this scandal, but already this conspiracy has exacerbated the already growing distrust of higher education. That is particularly harmful to society because for those born into low socio-economic strata, getting a college education remains one of the most reliable avenues into the middle and upper middle classes.

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White-collar crime is estimated to cost the country $300 billion each year, according to the FBI. The term "white-collar crime" was first coined in the 1930s, and, according to the FBI, "these crimes are characterized by deceit, concealment, or violation of trust and are not dependent on the application or threat of physical force or violence" (see the link to the FBI website below). According to the FBI, the three major areas of cost associated with these crimes are that they can destroy people's personal savings, destroy companies, and cost investors money. These crimes can also cost taxpayers money to investigate and punish, and they can add to the costs of running governmental programs. 

One type of healthcare fraud is to steal patients' identifying information and to use it to get fraudulently reimbursed by the government or health insurance companies for providing services to these patients. The costs associated with this type of fraud are the damage to private companies, comprising personal health information, and costing taxpayers money by charging governmental programs for services that were not delivered. In addition, there have been examples (reported on the FBI's website) of doctors submitting millions of dollars in Medicare claims for surgeries or procedures that they did not commit. In this case, insurance companies are damaged, as are taxpayers who have to foot the bill for these governmental programs.

An example of a computer crime (reported on the FBI website) is advertising inexpensive pharmaceuticals that customers can order via the internet without a prescription. These drugs often turn out to be fakes or unapproved substances. The costs associated with this crime are to the customer, and the customer's health can also be affected by taking harmful or ineffective medication. Criminals can also hack into companies' websites, stealing their information. The cost associated with this crime is its destruction to the company. 

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