Economic Crime in Russia Essay

2156 Words 9 Pages
Economic Crime in Russia

In Russia, where bureaucratic markets have been legalized, power and influence is highly monopolized, even by socialist "standards." Liberalization and privatization of prices and trade have led to a cutthroat battle for redistribution of and control over property, resources, and allocation channels, and also have fed economic crime.

Types of Wrongdoing

Economic crime is hardly a new phenomenon. As long as people have exchanged goods, they have cheated. With the rapid development of technology and communications and the explosive increase in financial interactions between people in the second part of the twentieth century, economic crime has become a highly diversified and fast-growing industry.
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Large-scale theft of socialist property and massive fraud involving hard currency could be, and were, punished by death. (William A. Clark analyzed trials of Soviet government officials and enterprise managers charged with economic crimes, as reported by the Soviet press between 1965 and 1990. Of the 849 officials tried, about 500 received jail sentences, with an average of eleven years jail for embezzling public property and eight for bribery.Thirty-two persons were sentenced to be executed.)

In 1994, particularly, the Russian public discovered how much damage can be done by investment fraud and pyramids. Since the collapse of the Soviet Union new business rules, including the opportunity to establish limited liability companies, have opened a wide gate for fraud and other "market type" economic, white-collar crimes. Crime has become a highly profitable business in Russia. From an international perspective, the Russian criminal economy is extremely efficient. The sudden explosion of economic crimes has caught the Russian public and the government off guard. According to some estimates, the 1994 worldwide average per capita income from economic crime reached $100. The corresponding figure for Russia, however, was $130, assuming 38.4 trillion rubles in annual crime-related income (box 1). In Ukraine revenue from the infamous black economy…

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