Controlling White Collar Crime: A Workshop
Promoting Polish-Ukrainian Cross-Border Cooperation
Controlling White Collar Crime: A Workshop Promoting Polish-Ukrainian Cross-Border Cooperation was the first step in a program that addressed the fact that white collar crime often takes place across borders.
Organizers and supporters
of the Interior
Federal Bureau of Investigation
Ministry of Finance
Illinois Attorney General
Law Firm of Altheimer
of the Ministry of Internal Affairs
Bureau of Criminal Services
November 2002 Planning Workshop in Chicago
This Workshop is the result of a planning workshop held in
Chicago on November 8 and 9, 2001. Polish
representatives attended from the Ministry of Justice, Police Bureau of Criminal
Services, Ministry of Finance, State Security Agency, and the Chicago Polish
Consulate. American participants
came from the Illinois Attorney General’s office, the United States Postal
Service, State Farm Insurance, the law firm of Katten, Muchin & Zavis, and
CitiGroup. Representatives of the
Chicago Ukrainian Consulate also attended.
Problems the Workshop Addresses
The workshop addresses three problems.
First, effective detection of white collar crime uses sophisticated
statistical analysis of computer databases.
Polish and Ukrainian law enforcement officials lack knowledge of and
expertise in these techniques.
Second, white collar crimes often masquerade as legitimate, sophisticated
business transactions, and, as a result, adequately controlling white collar
crime requires that law enforcement officials understand the business and
economic setting in which such crimes occur.
Without such an understanding, law enforcement may fail to identify white
collar crimes and may misidentify legitimate business transactions as
crimes and inappropriately prosecute them.
This is a worldwide problem; the sophistication of business
activities–legal and illegal–tends to outrun the law, which constantly plays
catch-up. Polish and Ukrainian law
enforcement officials, like their counterparts worldwide, need an adequate
understanding of the business and economic environment that white collar
Third, white collar crime is a cross-border problem.
Adequate control requires cross-border cooperation.
The cross-border problem provides the fundamental rationale for the
The first two problems–lack of sophisticated detection techniques, and
the lack of economic and business understanding–could of course be addressed
in a purely nationally-focused Workshop. But
to do so would be to bury one’s head in the sand.
A purely national approach to the problem of white collar crime simply
ignores the fact that such crime crosses borders with ease.
Solution the Workshop Provides
Controlling White Collar Crime addresses these three problems
through workshops that bring Polish, Ukrainian, and American experts together.
The Americans have the expertise in the practical and technical
approaches to white collar crime. Polish
and Ukrainian experts understand Poland and Ukraine’s needs and can determine
whether and how various approaches would work in their respective countries.
In addition, Ukrainian experts will benefit from the Polish
participation. Poland is generally
perceived as having traveled further than Ukraine down the road of
democratization and privatization. Ukraine
can speed its travel down this road by benefiting from the Polish experience.
The format of the workshop is designed to promote frank discussion
leading to practical solutions. All presenters will distribute presentation
materials in advance of the conference so that the audience may profit as much
as possible from the formal presentation and the subsequent question-and-answer
The workshops are not theoretical lectures but practical training
sessions. To promote practical
training, each presentation is followed by breakout sessions.
Four breakout sessions are planned after each presentation.
Each session will include no more than 25 people.
Each session will be led by a Polish or Ukrainian expert in the area
covered by the formal presentation.
The conference will focus on five major issues.
First: Smuggling and Illegal Immigration
Smuggling and illegal immigration contribute to tax evasion, money
laundering, and credit card fraud. Money
from illegal smuggling activities–including the drug trade--must be laundered
and money from such activities is, of course, virtually never included in a tax
return. In addition, illegal aliens
must support their activities somehow, and credit card fraud is a common source
Second: Credit Card Fraud and Computer Crimes
Credit card fraud, and other forms of identity theft, are serious
problems in Poland and Ukraine as they are worldwide.
This type of fraud attracts an ever increasing number of perpetrators as
it is much more difficult to detect than more traditional forms of theft and
fraud and the punishments are typically much less severe.
Credit card fraud is frequently practiced by organized crime and by
terrorists organizations. Terrorist
organizations use it as a source of funds.
Over the last several years, techniques of credit card fraud have
increased considerably in sophistication and effectiveness. The expertise of the perpetrators currently often outstrips
the knowledge and detection ability of law enforcement. It is essential that law enforcement personnel be trained in
the detection and prosecution of credit card fraud.
Credit card fraud is a form of computer crime.
A “computer crime” is any crime facilitated through the use of a
computer. Computer technology is
used in “skimming.” Skimming
uses a special credit card reader to copy all the information on the magnetic
strip on the credit card. This
information is then used to create a clone of the card.
Computer technology is also used to hack into databases that contain
credit card numbers and other financial information. Hackers can accomplish this from the safety of their home
Third: Money Laundering and Securities Fraud
Money laundering is a critical issue.
As the Financial Action Task Force on Money Laundering notes:
laundering is a threat to the good functioning of a financial system; however,
it can also be the Achilles heel of criminal activity. In law enforcement
investigations into organised criminal activity, it is often the connections
made through financial transaction records that allow hidden assets to be
located and that establish the identity of the criminals and the criminal
organisation responsible. When criminal funds are derived from robbery, extortion,
embezzlement or fraud, a money laundering investigation is frequently the only
way to locate the stolen funds and restore them to the victims.
Most importantly, however, targeting the money laundering aspect of
criminal activity and depriving the criminal of his ill-gotten gains means
hitting him where he is vulnerable. Without a usable profit, the criminal
activity will not continue.1
problem is not simply one of detection and enforcement.
It is also a problem of definition.
One effective way to launder money is through sophisticated financial
instruments that conceal it source. It
is essential that law enforcement officials be able to distinguish legitimate
from illegal use of complicated financial instruments.
Similar issues arise with securities transactions.
Law enforcement officials need to know where to draw the line between
legal and illegal activities.
Fourth: Tax Planning and Tax Evasion
Tax evasion is a serious problem in both Poland and Ukraine.
As with money laundering and securities fraud, the problem is in part
definitional: where does legitimate tax planning stop and illegal tax evasion
Fifth: Public Corruption
It is often overlooked that non-legal norms play a critical role in
regulating commercial activity. Business
professionals, police, prosecutors, and judges must participate in a “web of
trust." Business must expect
and trust that laws will be enforced; police must respond to this trust with
adequate investigation and enforcement and, to remain adequately motivated, they
must trust the judicial system to pursue properly, zealously, and without
political favoritism, the results of police investigation.
Corrupt public officials undermine the web of trust.