Exam 2 Material Sales Related Crimes and Consumer Crimes Chapter 4 environmental crimes 6 Securities fraud 11 medical crimes 12 technology and cyber crimes Retail Crime and Service Fraud activities Retail businesses like corporations engage in many deceptive and illegal o Fraudulent advertising o Illegal pricing practices o Sale of fraudulently represented merchandise o Purchase and resale of stolen goods Unsafe Products Auto Repair Sales Fraud Early 1990s auto repair rip offs were the most frequently reported consumer complaint o Estimated loss of 20 billion annually Auto repair fraud includes o Billing for services not provided o Unnecessary repairs o Airbag fraud o Auto insurance fraud Auto Recalls General Motors Delayed the recall on an ignition switch defect that is now blamed on at least 31 crashes and 13 deaths in small cars from mostly the 2003 through 2007 model years GM CEO Mary Barra s Congressional testimony last week was the subject of the opening skit on Saturday Night Live Transportation Products and Services 130 Americans die daily in automobile accidents Defects in automotive products contribute to accidents and fatalities despite greater attention to safety features o Ford Pinto 1960 s o Toyota Mazda Honda and Nissan recent recalls 2000 s Food Products The Meat Inspection Act of 1906 prohibits o Bribery of government meat inspectors o Deception through the use of dyes and by other means Four Loko lawsuits o FDA determined that caffeine as used in Four Loko was an unsafe food additive therefore the product is considered adulterated o Mixing alcohol and caffeine health risks Pharmaceutical Products and Medical Devices Spend millions of dollars on advertising Persuade physicians to prescribe specific drugs through kickbacks The Federal Anti Kickback Act AKS o Prohibits the offer solicitation payment or receipt of anything of which is intended to induce the ordering or prescribing of an item that falls under a federal healthcare program Cases o FenPhen 1997 weight loss product tens of thousands suffered lung and heart problems o Johnson Johnson DePuy Hip Replacement 12 13 failure rate DePuy has also illegally marketed an unapproved knee device and sold a hip implant for unapproved use How do companies get away with selling these products o These statements have not been evaluated by the Food and Drug Administration Dietary Supplement Health and Education Act of 1994 o Removes regulatory authority of FDA over weight control supplements unless someone dies Environmental Crimes Corporate Violence against the Public Unsafe Environmental Practices o The most common form poisoning the environment o The lack of proper disposal of wastes contribute to Unsanitary living conditions Spread of disease Premature death Wal Mart 2013 o Fined 82 million over mishandling of hazardous waste o Violated Clean Water Act in California and Missouri Dumped fertilizers pesticides and bleach into trash and sewer system o Wal Mart 2012 revenue 128 billion Deep water Horizon BP Oil Spill Gulf of Mexico 2010 Largest offshore oil spill in US History Safety evaluations were missing Received 5 evaluations for non compliance Last 3 evaluations were not initially produced in records o Less than 2 hours each Synthetic variations of oil make companies not legally responsible to clean it up if there is a spill Corporate violence fracking for natural gas Injecting high pressure water and chemicals into the earth to release natural gas chemicals contaminate water sources Research has been unable to show a clear connection between fracking and liver disease blindness and cancer but the jury is still out on its effects o You be the judge as to why the research is inconclusive most the ocean Air Pollution problem All states and continents have fault lines but California have more than Also it is a plate boundary on land whereas most plate boundaries are in Automobile emissions constitute a signification portion of the air pollution By 1970 s the damage of automobile emissions became evident and the Clean Air Act was passed Not all employee crime against the employer takes the form of theft Employees may commit sabotage Conceal their own errors Lie about hours Express their contempt and anger with their work employer Theft of ideas designs and formulas are another form of employee crime Intellectual Property Theft Health Code Violations USDA announces Food recalls Meat industry contaminated products with E Coli and salmonella Entertainment Services System Crimes Crimes committed by the restaurant industry 1 Food tempering 2 Violating health cleanliness codes 3 False advertising to describe foods 4 Short weighting Defrauding Vulnerable People David Caplowitz found that the poor were o Being overcharged and sold inferior goods o Home repair fraud o Occurs when contractors and repair persons rip off individuals for various reasons How To Protect Yourself Get multiple estimates Check for complaints with the Better Business Bureau Never pay in full up front especially if cash is the only payment accepted Make sure the contractor is insured and bonded Fraud by the Medical Fields involuntary manslaughter A highly publicized case of medical white collar crime Charged with Conrad Murray was accuse of giving Michael Jackson a lethal dose of propofol there was a clear awareness of the danger What is propofol o A risky and potentially addictive sedative milk of amnesia used to sedate people before surgical procedures Do doctors commit more or less white collar crime Why do we as patients invest so much trust in a profession that runs rampant with illegal acts Medicare vs Medicaid o Medicare federal program to aid elderly citizens with medical costs o Medicaid state program to aid the poor Fraud vs Abuse o Fraud intentional criminal behaviors by physicians o Abuse unintentional misuse of program funds Fertility Fraud Fertility clinic scandal at the University of California Irvine 1990 s First report by staff to the university o Ignored the allegations o Went from 30 to 70 success rate We have never seen this high of a success rate before with these women Second report to the press o Led to an internal investigation that revealed major breaches of policy human subject violations financial frauds and unauthorized use of eggs to impregnate other patients Doctors Ricardo Asch Jose Balmaceda and Sergio Stone Sexual abuse can include health care providers taking advantage of Additional Illegal Deceptive Practices Phantom