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Racketeering white collar crime

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Posted 23 October 2012 - 07:57 AM

Racketeering is the act of operating an illegal business or scheme (a racket) in order to make a profit, perpetrated by a structured group. It is a broad category of criminal acts that includes bribery, sexual exploitation of children, and illegal gambling, among many others. The practice is closely associated with organized crime, since both are conducted by groups.

Many criminal acts can be included in this category, including theft and fraud against businesses or individuals. Governments can be victimized by racketeering by groups that counterfeit money and trade in untaxed alcohol. Providing illegal services, such as prostitution or drug trafficking, are also a form of racket. Racketeering also takes place among legitimate businesses or labor unions, where it is sometimes referred to as white-collar crime, and can include acts such as extortion and money laundering.

The criminal organizations that engage in racketeering often have legitimate businesses, like licensed gaming establishments or garbage collection companies, in order to provide cover for their rackets. In addition, the illegal business is often aided by the bribing, blackmailing, or extortion of public officials or civil servants. Legitimate business owners can be similarly manipulated in order to help criminal groups and their practices to appear lawful.

While all forms are targeted by law enforcement agencies, of particular concern to the United States government is labor racketeering. The Federal Bureau of Investigation (FBI) defines labor racketeering as the manipulation of a labor force, which affects all industries and businesses related to that labor group. Beginning in the 1950s, the FBI has investigated criminal organizations, especially La Cosa Nostra or the Mafia, with labor union ties and learned that many of their operatives pose as or are in collusion with union members. These racketeers extort union officials or bribe them with offers of favorable contracts or settled disputes, or otherwise coerce them to accept certain terms or demands. The ultimate goal is the control of health, welfare, and pension plans of union members, the total assets of which usually amount to several billion dollars.

Labor racketeering not only denies laborers their rights, but also results in economic loss to workers, the industry, and consumers. The FBI has determined that this activity leads to increased labor costs, which are passed on to consumers and cost the American public millions of dollars annually. To target entire corrupt entities instead of replaceable individuals,racketeering is federally prosecuted under the Racketeer Influenced and Corrupt Organizations (RICO) statute.




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Posted 22 November 2012 - 09:27 AM


US billionaire in spotlight in record $276mn insider trading scam
Get short URL email story to a friend print versionPublished: [color=#999999 !important]21 November, 2012, 20:00[/color]

TAGS:<br style="padding: 0px; margin: 0px; quotes: “, ”;">Crime, USA, Corporate news, Finance,Court

Posted Image[color=#999999 !important]Hedge fund manager Steven A. Cohen, founder and chairman of SAC Capital Advisors (Reuters / Steve Marcus)[/color]

[color=#695B4E]US prosecutors claim to have uncovered the largest insider trading case. Reports have suggested the founder of the SAC Capital Advisors hedge fund Steven Cohen can be linked to the main suspect.[/color]

[color=#695B4E]The new charges relate to a fifth former employee of SAC Capital Advisors – the former portfolio manager at SAC affiliate CR Intrinsic Investors, Mathew Martoma. <br style="padding: 0px; margin: 0px; quotes: “, ”;">[/color]

[color=#695B4E]According to investigators, Martoma received secret information from a former Professor of Neurology at University of Michigan Sidney Gilman. He was participating in the testing of a new drug for Alzheimer's disease. Funds under SAC management profited to the tune of $276 million by selling shares in the pharmaceutical companies Elan and Wyeth, which developed the drug. Cohen and Martoma bought their shares on the neurologist’s tips and later sold them after Martoma was told the drug testing was unsuccessful, prosecutors say.[/color]

[color=#695B4E]Court documents made veiled mentions of hedge-fund heavy Steven A. Cohen, WSJ reports. Though Cohen wasn’t mentioned by name, he is referred to as “Portfolio Manager A” in a civil complaint filed by the Securities and Exchange Commission, the paper quotes people familiar with the matter. Besides, he is also referred to as the “owner” of the two hedge-fund affiliates involved in the scheme and involved in the allegedly illicit transactions in the civil complaint and a related criminal complaint filed by federal prosecutors.[/color]

[color=#695B4E]Mr. Cohen and SAC are confident that they have acted appropriately and will continue to cooperate with the government’s inquiry,” said an SAC spokesman, in an emailed statement on Tuesday, WSJ reports.[/color]

[color=#695B4E]Four former employees of SAC Capital or its affiliates have pleaded guilty to criminal charges as part of the government’s broad probe into insider trading.[/color]

[color=#695B4E]The United States have been implementing a major crackdown on insider trading over several years. Since 2008 more than 73 people have been indicted for participating in insider trading with 69 being found guilty. Among those who got prison terms were such heavyweights as the founder of the Galleon hedge fund billionaire Raj Rajaratnam and the former director of Goldman Sachs Group Inc. Rajat Gupta.[/color]

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[color="#695b4e"]http://rt.com/busine...pital-case-261/[/color]


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