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• W1573707258 abstract "ABSTRACT Now, more than ever, businesses may fail due to criminal activities of others. For years, sociologists and others studied the relationship between economic cycles and increases in crime. While certainly there are other variables that contribute to increases in crime, evidence suggests that the current recession will fuel crime increases ranging from shoplifting and robbery to fraud and embezzlement. This paper presents a model for businesses to use in the prevention and detection of criminal activity as well as prescriptive measures to help reduce the impact of criminal activity targeting business. INTRODUCTION Economic cycles indicate that during more difficult economic times, criminal activity increases. Experts (Levisohn, 2009) believe that fraud in particular, increases during recessionary times. James Short (1980) compiled a number of comprehensive studies on the relationship between crime and economic cycles examining a series of studies dating back into the 1800' s. Although numerous variables and circumstances make comparisons difficult, Short concluded that connection exists. According to the National White Collar Crime Center, the two most recent recessions recorded significant increases of arrests for fraud and embezzlement (Business Week Online, January 12). In 1990, just after the savings and loan crisis, arrests increased 52% and in 2000, after commercial Internet development, arrests increased 25% (Business Week Online, January 12). Arvanites and Defina (2006) examined business crime activity and economic cycles from 1985 to the early 2000's and also report a relationship between the two. Businesses, already susceptible to a wide variety of crimes, need to be on their guard to prevent the impact of criminal activity from impacting profitability to the point that the viability of their business comes into question. Crimes against companies range from shoplifting and vandalism to piracy and counterfeiting. In some instances, crimes committed against businesses are committed by outsiders while in many other situations, employees at all levels commit crimes against their employers. In some cases, companies become unwitting accomplices of money-laundering crimes. Crimes committed against business are nothing new. The literature records numerous examples throughout history. By 1995, the SBCI survey found 35% of retailers reporting customer theft with similar percentages for manufacturing and wholesaling industries. In all, 75% of surveyed businesses reported one or more incidents of crime, with 3.5 incidents on average (Burrows and Hopkins, ####). Small businesses may be particularly vulnerable to crime as small businesses often do not have safeguards in place to prevent and detect criminal activity. As early as 1996, (prior to Internet crime) a survey of 400 firms conducted by the U.S. Small Business Administration found nearly 13% of surveyed businesses became crime victims. Further, less than half (48%) employed any security measures and many incidents, especially employee thefts, went unreported (Small Business Research Summary, 1997). How much does crime against business cost? According to the 2007 report Crime in the United States, stolen office equipment alone totaled a staggering $656,982,032. Burglaries on average cost businesses $ 1 ,989 and shoplifting which recently increased 1 1 .2% cost businesses an average $205 per incident. Several recent high-profile cases of fraud include the Madoff investment scandal ($50 billion) and the Stanford investment scandal ($20 billion). Just a few years ago, newspaper headlines shocked readers with news of the Enron and WorldCom financial scandals (Off to Jail, 2005; Schickel, 2005). By 1991, cost estimates of crimes committed against businesses reached $128 billion in direct costs (Thompson et al, 1992). Estimates are difficult to determine as many business crimes go unreported (especially in small businesses) for fear of bad publicity and loss of investor confidence but by 2006, even prior to the current recession, Federal Bureau of Investigation crime data list the figure at $652 billion annually (cited in Bressler, 2007). …" @default.
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• W1573707258 date "2011-01-01" @default.
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• W1573707258 title "The Enemy Within: A Study of Employee Criminal Activity and Its Impact on Business" @default.
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