Exam 3 Policing WCC 06 20 2012 Historically WCC has not been a principle concern of law enforcement agencies Law Enforcement and Regulatory Agencies Three types of agencies oversee activities associated with WCC o Law enforcement agencies o Regulatory agencies o Self policing or private agencies Federal Enforcement agencies Federal agencies do the bulk of the police work in WCC cases A few of the principal federal investigative agencies are o The FBI o Inspectors General o U S Postal Inspection Service o U S Secret Service o U S Customs Services o Internal Revenue Service Criminal Investigation Division Be familiar with the ones listed on p 289 299 of the reading The FBI The FBI grew into one of the world s most highly regarded policing agencies during the reign of J Edgar Hoover o Bank robbery and kidnapping and the activities of alleged subversives During the 1980 s focused on protecting the government and major financial institutions from fraud September 11 2001 shifted to counterterrorism leaving fewer to investigate WCC Since 2008 focus is on investigating financial crimes FBIs Financial Crime Section FCS o Consists of a number of smaller units Economic crime unit Health care fraud unit National mortgage fraud unit Asset forfeiture Money laundering Unit Forensic Accountants Unit The Inspectors General Created by the Inspector General Act of 1978 as a response to the Watergate scandal Primary Responsibilities are o To detect and prevent fraud waste abuse and violations of law and to promote efficiency and effectiveness in the operations of the Federal o Have authority to conduct audits and investigations of the government Government departments or agencies o Are expected to report to the attorney general and Congress any wrongdoing that they uncover The U S Postal Service Inspection Service Identified as the oldest federal law enforcement agency founded by Benjamin o In charge of maintaining the overall security of the mail system Inspectors work closely with others to investigate postal cases Approx 1 500 Postal Inspectors stationed throughout the U S who enforce 200 Franklin federal statutes Recent case o Father and son mail fraud scheme o Fraudulent investment company promising significant returns on investment o Received nearly 20M from 300 investors and did not invest any of the Ponzi or pyramid scheme money as promised The U S Secret Service U S Customs Service and U S Marshals Service o Investigates white collar crimes involving counterfeiting or forgery of any The secret service form of federal currency U S Customs o Investigates money laundering falsified import or export documents illegal product dumping and foreign corrupt payment U S Marshals o Assigned both law enforcement and court related duties Pursue and capture fugitives dispose of seized assets in WCC cases The I R S Criminal Investigation Division The I R S investigates tax frauds or misrepresentations involving corporations Tax audits and investigations may lead to investigations of other types of corporate businesses and individuals and occupational crime I R S National Forensic Laboratory o Able to reconstruct shredded documents enhance voices on tapes and analyze altered documents fingerprints ink paper and polygraphs 2009 Tax Fraud Case o AZ casino employee created 585 fraudulent jackpot override tickets each under 1 200 totaling 644 422 o Stole both the money from the casino and did not pay taxes on winnings o Convicted of tax evasion which lead to further criminal charges The Regulatory System Regulation has been defined as any attempt by the government to control the behavior of citizens corporations or sub governments Economic regulation addresses the market relations and attempts to ensure stability in Social regulation addresses harmful consequences to workers consumers citizens f the economic market productive activities Evolution of Regulation Regulatory cycles have occurred throughout U S History o Progressive era o New deal era o Greta society era Reagan regulation was scaled back Clinton pushed for more regulatory oversight George W Bush favored regulatory agencies Obama moved toward massive overhaul of the regulatory system but has been unsuccessful Federal Regulatory Agencies Federal regulatory agencies are created by congressional action o Its members are appointed by the president and subject to congressional confirmation Regulatory agencies have three basic functions o Rule making empower to create rules that carry the force of law Rule making is more flexible and requires specialized scientific or 7 00 rules and regulations annually as compared with some 300 laws Examples The Clean Air Act Food and Drug Act the Civil Rights technical knowledge enacted annually by Congress Act o Administration Regulatory authorities enforce standards and safety according to own regulations o Adjudication oversight from the legislative branch have statutory authority to perform their functions with Regulatory Agency s Philosophy Regulatory agencies confront a basic choice between emphasizing compliance or o Compliance strategy emphasizing persuasion and cooperation o Deterrence strategy emphasizing prosecution and punishment Less of a police force rather seek to gain voluntary compliance with regulatory deterrence standards Informality and bargaining take precedence over the strict implementation of legal rules lots of discretion Other Factors in Regulatory Response Regulatory agencies are greatly understaffed and underfunded Business interests have lobbied for limitations on these agencies powers and budgets Yeager 1987 found evidence of a bias in the regulatory process that favors larger more powerful corporations o Larger corporations have the resources to afford experts who can challenge and negotiate with agency experts U S v Grimaud 1911 Grimaud was letting sheep graze in the Sierra National Forest without a permit Was fined by the USDA and appealed o Argued that the fine was unconstitutional because the USDA should not have the power to write regulations only congress o 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 Administration The FDA was created by the Food and Drug Act of 1906 o Regulates inspects monitors and tests a wide range of foods drugs cosmetics medical and veterinary devices o Issues