Policing WCCLaw Enforcement and Regulatory AgenciesThree types of agencies oversee activities associated with WCCLaw enforcement agenciesRegulatory agenciesSelf-policing or private agenciesHistorically, WCC has not been a principle concern of law enforcement agenciesFederal Enforcement agenciesFederal agencies do the bulk of the police work in WCC casesA few of the principal federal investigative agencies are:The FBIInspectors GeneralU.S. Postal Inspection ServiceU.S. Secret ServiceU.S. Customs ServicesInternal Revenue Service Criminal Investigation DivisionBe familiar with the ones listed on p. 289-299 of the readingThe FBIThe FBI grew into one of the world’s most highly regarded policing agencies during the reign of J. Edgar HooverBank robbery and kidnapping, and the activities of alleged subversivesDuring the 1980’s, focused on protecting the government and major financial institutions from fraudSeptember 11, 2001-shifted to counterterrorism leaving fewer to investigate WCCSince 2008, focus is on investigating financial crimesFBIs Financial Crime Section (FCS)Consists of a number of smaller unitsEconomic crime unitHealth care fraud unitNational mortgage fraud unitAsset forfeiture/Money laundering UnitForensic Accountants UnitThe Inspectors GeneralCreated by the Inspector General Act of 1978 as a response to the Watergate scandalPrimary Responsibilities are:To detect and prevent fraud, waste, abuse, and violations of law and to promote efficiency and effectiveness in the operations of the Federal GovernmentHave authority to conduct audits and investigations of the government departments or agenciesAre expected to report to the attorney general and Congress any wrongdoing that they uncoverThe U.S. Postal Service Inspection ServiceIdentified as the oldest federal law enforcement agency, founded by Benjamin FranklinIn charge of maintaining the overall security of the mail systemInspectors work closely with others to investigate postal casesApprox 1,500 Postal Inspectors stationed throughout the U.S. who enforce 200 federal statutes.Recent case:Father and son mail fraud schemeFraudulent investment company promising significant returns on investment (Ponzi or pyramid scheme)Received nearly $20M from 300 investors and did not invest any of the money as promisedThe U.S. Secret Service, U.S. Customs Service, and U.S. Marshals ServiceThe secret serviceInvestigates white collar crimes involving counterfeiting or forgery of any form of federal currencyU.S. CustomsInvestigates money laundering, falsified import or export documents, illegal product dumping, and foreign corrupt paymentU.S. MarshalsAssigned both law enforcement and court-related dutiesPursue and capture fugitives, dispose of seized assets in WCC casesThe I.R.S. Criminal Investigation DivisionThe I.R.S investigates tax frauds or misrepresentations involving corporations, businesses and individualsTax audits and investigations may lead to investigations of other types of corporate and occupational crimeI.R.S. National Forensic LaboratoryAble to reconstruct shredded documents, enhance voices on tapes, and analyze altered documents, fingerprints, ink, paper and polygraphs.2009 Tax Fraud CaseAZ casino employee created 585 fraudulent jackpot override tickets (each under $1,200) totaling $644,422Stole both the money from the casino and did not pay taxes on winningsConvicted of tax evasion which lead to further criminal chargesThe Regulatory SystemRegulation has been defined as any attempt by the government to control the behavior of citizens corporations, or sub-governmentsEconomic regulation-addresses the market relations and attempts to ensure stability in the economic marketSocial regulation-addresses harmful consequences to workers, consumers, citizens f productive activitiesEvolution of RegulationRegulatory cycles have occurred throughout U.S. HistoryProgressive eraNew deal eraGreta society eraReagan-regulation was scaled backClinton- pushed for more regulatory oversightGeorge W. Bush-favored regulatory agenciesObama- moved toward massive overhaul of the regulatory system, but has been unsuccessfulFederal Regulatory AgenciesFederal regulatory agencies are created by congressional actionIts members are appointed by the president and subject to congressional confirmationRegulatory agencies have three basic functions:Rule making: empower to create rules that carry the force of lawRule making is more flexible and requires specialized scientific or technical knowledge7,00 rules and regulations annually, as compared with some 300 laws enacted annually by CongressExamples: The Clean Air Act, Food and Drug Act, the Civil Rights ActAdministration: Regulatory authorities enforce standards and safety according to own regulationsAdjudication: have statutory authority to perform their functions with oversight from the legislative branchRegulatory Agency’s PhilosophyRegulatory agencies confront a basic choice between emphasizing compliance or deterrenceCompliance-strategy emphasizing persuasion and cooperationDeterrence-strategy emphasizing prosecution and punishmentLess of a police force, rather seek to gain voluntary compliance with regulatory standardsInformality and bargaining take precedence over the strict implementation of legal rules (lots of discretion)Other Factors in Regulatory ResponseRegulatory agencies are greatly understaffed and underfundedBusiness interests have lobbied for limitations on these agencies powers and budgetsYeager (1987) found evidence of a bias in the regulatory process that favors larger, more powerful corporationsLarger corporations have the resources to afford experts who can challenge and negotiate with agency experts.U.S. v. Grimaud, 1911Grimaud was letting sheep graze in the Sierra National Forest without a permitWas fined by the USDA and appealedArgued that the fine was unconstitutional because the USDA should not have the power to write regulations (only congress)The Us supreme court found that it would be impractical for congress to provide general regulations for grazing rights, and therefore it is within their power to confer that power to an Administrative Agency (in this case the USDA)Food and Drug AdministrationThe FDA was created by the Food and Drug Act of 1906Regulates, inspects, monitors, and tests a wide range of foods, drugs, cosmetics, medical and veterinary devicesIssues recalls on all products deemed unsafe for public consumptionLook at pg. 199 or 299 to help remember the