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White-Collar and Organized Crime

Sherman Antitrust Act
. . .134 RICO
. . .147

Two major categories of crime attracted considerable attention from the U.S. criminal justice system during the twentieth century and posed far greater costs to society than usual street crime. They were white-collar crime and organized crime. Both involved illegal activities through enterprises. An enterprise is a group of associated individuals such as a business partnership, corporation, or union. The key difference between the two is that white-collar criminals try to profit off of legitimate businesses in a nonviolent way, while organized crime seeks profits through illegal businesses and frequently employs physical intimidation and violence. In addition, white-collar crime can involve one person or a group of individuals. Organized crime usually employs a large number of crime bosses and members.

White-collar crime is one of the most costly crimes to society. Near the end of the twentieth century white-collar crime was costing U.S. businesses some $400 billion a year, or about 6 percent of total revenue in the nation. White-collar crime is illegal activity conducted within what are normally legal business transactions. They can involve banking, stock trading, The Sherman Antitrust Act of 1890 was passed to eliminate the power large companies could enact by squashing competition, gaining monopolies, and fixing prices. (© Hulton Archive/Getty Images) or insurance claims. Unlike organized crime, white-collar crime is not carried out within the framework of illegal activities such as drug trafficking or smuggling. White-collar crime also includes illegal price-fixing.

During the late 1880s business leaders of several major industries brought their companies together to control competition by ruining smaller companies. They would fix prices so low it drove small competitors out of business, then set prices high again after their competitors were eliminated to make large profits. The organizations they formed were called "trusts." The public was outraged by this growing business practice. The first excerpt is from the first key white-collar crime legislation, the Sherman Antitrust Act of 1890. The legislation was effectively applied during the first decade of the twentieth century; the act remains the cornerstone of U.S. antitrust and price-fixing law.

Organized crime did not become high profile until the 1920s when the organizations became incredibly wealthy supplying illegal liquor during Prohibition (1920–33), the thirteen-year period when the distribution, production, sales, and possession of alcoholic beverages was illegal. U.S.-based organized crime continued to prosper for several decades following Prohibition.

In 1965 President Lyndon B. Johnson (1908–1973; served 1963–69) assembled the President's Commission on Law Enforcement and the Administration of Justice, or simply known as the President's Crime Commission. The commission's 1967 report revealed a behind-the-scenes look at the operations of organized crime for the first time.

A key focus was the La Costa Nostra, a network of some two dozen Italian and Sicilian crime families operating in a number of U.S. cities. Congress responded to the commission's findings and pleas from law enforcement authorities by passing legislation giving them the authority they needed to successfully fight organized crime.

The second excerpt is from the Racketeer Influenced and Corrupt Organizations (RICO) Act of 1970. RICO led to many successful prosecutions of crime bosses and members through the 1990s. Most of the U.S.-based organized crime organizations were significantly weakened.

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Law Library - American Law and Legal InformationCrime and Criminal Law