Question 1

Some corporations have endangered the lives of their own workers by maintaining unsafe conditions in their plants and mines.What federal agency sets and controls standards of workers' safety?

Accepted Answer

OSHA is the federal agency responsible for setting and enforcing standards to ensure safe and healthy working conditions for employees in the United States. It was created in 1971 by the Occupational Safety and Health Act.

Question 2

Compliance strategies are often viewed as "slaps on the wrists." In their place,deterrence strategies have become the normative approach to controlling white-collar offenders.Why is the tide turning from compliance to deterrence?

Accepted Answer

Public opinion has shifted towards a desire for harsher punishment for white-collar criminals, partly due to a growing awareness of the extent of the damage caused by their offenses. Compliance strategies, which are seen as less severe, are no longer deemed sufficient to deter white-collar crime.

Question 3

In crimes of institutional exploitation,the victims are those who are forced to pay for services to which they have a clear right.Who or what is the victim in crimes of influence peddling?

Accepted Answer

In crimes of influence peddling, the organization is the victim as its integrity and operations are compromised by employees who misuse their position for personal gain.

Question 4

The control of restraint of trade violations,which involves a contract or conspiracy designed to stifle competition,create a monopoly,artificially maintain prices,or otherwise interfere with free market competition,has its legal basis in:

Accepted Answer

The Sherman Antitrust Act is the legislation that provides the legal basis for the control and restraint of trade violations. It was enacted in 1890 and is the cornerstone of modern antitrust law in the United States. The Act prohibits contracts, combinations, or conspiracies in restraint of trade or commerce among the several states or with foreign nations.

Question 5

In many _________________,the fraudsters focus on attracting new money to make promised payments to earlier-stage investors and to use for personal expenses,instead of engaging in any legitimate investment activity.

Accepted Answer

The phrase "attracting new money to make promised payments to earlier-stage investors" is characteristic of a Ponzi scheme, where early investors are paid with the money of later investors, rather than from actual returns on investments.

Question 6

For the government to prove tax fraud,the minimum dollar amount that must be involved is:

Accepted Answer

There is no minimum dollar amount required for the government to prove tax fraud. Tax fraud can be prosecuted regardless of the amount involved.

Question 7

What white-collar crime involves a contract or conspiracy designed to stifle competition,create a monopoly,artificially maintain prices,or otherwise interfere with free market competition?

Accepted Answer

Restraint of trade is a white-collar crime that involves a contract or conspiracy designed to stifle competition, create a monopoly, artificially maintain prices, or otherwise interfere with free market competition. This can include practices such as price fixing, group boycotting, and market allocation.

Question 8

An example of business-related bribery is the routine practice of paying radio stations or DJs to play songs.This is known as:

Accepted Answer

The practice of paying radio stations or DJs to play songs is known as payola. This is a form of business-related bribery where money or gifts are exchanged for a desired outcome. Chiseling refers to using unethical means to obtain a lower price, bucketing refers to the practice of charging customers for services that are never provided, and pilferage refers to theft of goods from a business.

Question 9

__________________ occurs when the victim has a clear right to expect a service,and the offender threatens to withhold the service unless an additional payment or bribe is forthcoming.

Accepted Answer

Exploitation occurs when someone takes advantage of another person, often by withholding a service or benefit that the victim has a right to expect, unless an additional payment or bribe is made.

Question 10

Income tax evasion is a type of client fraud.Simply not paying taxes,not reporting income,or not paying taxes when due is a misdemeanor known as:

Accepted Answer

Passive neglect refers to the failure to fulfill tax obligations without actively attempting to deceive or mislead tax authorities, such as simply not paying taxes or not reporting income.

Question 11

When firms divide a region into territories and each firm agrees not to compete in the others' territories,it is illegal and is called:

Accepted Answer

When firms agree not to compete in each other's territories, it is a violation of antitrust laws known as division of markets. This practice results in limiting market competition and harms the consumers' interests.

Question 12

A cab drivers who routinely overcharges customers by charging them out-of-town rates though the ride had taken place within city limits is involved in what type of white-collar crime?

Accepted Answer

Chiseling is a type of white-collar crime where an individual overcharges customers for services or products. In this case, the cab driver is overcharging customers by charging them out-of-town rates for rides within city limits, which is a form of chiseling.

Question 13

When powerful institutions or their representatives willfully violate the laws that restrain these institutions from doing social harm or that require them to do social good,it is called corporate crime or:

Accepted Answer

The term "organizational crime" refers specifically to violations of laws or regulations by powerful institutions or their representatives. "Organized crime" refers to criminal activities coordinated by a group for profit or power. "Social crime" is a broader term that can refer to any act that violates social norms or causes harm to society. "Antitrust crime" refers specifically to illegal actions related to competition and monopolies. Thus, the best choice is B, as it specifically refers to corporate or institutional wrongdoing.

Question 14

Vendors who bundle subprime loans into large pools and sell them as securities,a process known as securitization,are involved in a:

Accepted Answer

Securitization of subprime loans can be considered a mortgage swindle because it involves repackaging risky loans into securities, often misleading investors about the true risk involved.

Question 15

Congress passed the Foreign Corrupt Practices Act that made it illegal to:

Accepted Answer

The Foreign Corrupt Practices Act (FCPA) makes it illegal for individuals and businesses to bribe foreign officials in order to obtain or retain business. Trafficking women and children, taking kickbacks, and engaging in price-fixing are separate issues not covered under the FCPA.

Question 16

One method of controlling white-collar crime is through the use of compliance strategies.Which of the following is not how compliance strategies work?

Accepted Answer

Compliance strategies depend on businesses' cooperation and self-policing in order to effectively control white-collar crime. They provide economic incentives for obeying the law and may use the threat of economic sanctions or civil penalties to ensure compliance.

Question 17

One example of health care fraud involves billing for more expensive services or procedures than were actually provided or performed.This practice is termed ______________and requires "inflation" of the patient's diagnosis code to a more serious condition consistent with the false procedure code.

Accepted Answer

Upcoding is the practice of using a more expensive procedure code or diagnosis code than was actually provided in order to receive a higher reimbursement rate from insurance companies or government programs like Medicare or Medicaid. This is considered healthcare fraud and is illegal.

Question 18

When speaking of white-collar enforcement,which of the following is an inaccurate statement?

Accepted Answer

White-collar enforcement is generally reactive, not proactive, as it often relies on reports of wrongdoing or audits rather than active monitoring.

Question 19

Which of the following pieces of legislation combats fraud and abuse in publicly traded companies?

Accepted Answer

Sarbanes-Oxley (SOX) is a federal law enacted in 2002 to combat fraud and abuse in publicly traded companies. It imposes strict requirements on financial reporting, including the establishment of internal controls to ensure the accuracy and completeness of financial statements. The law also imposes criminal penalties for corporate fraud and requires CEOs and CFOs to certify the accuracy of financial statements.

Question 20

Systematic theft of company property by employees is common and is called:

Accepted Answer

Pilferage is the systematic theft of company property by employees. Front running is a term used in finance, bucketing refers to fraudulent trading practices, and "steering" is not a term commonly used to describe employee theft.

Quiz 13: Enterprise Crime