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. It is impossible to point to crimes that are specific to countries currently in transition, but some particular crimes flourish in transition, some could not be committed during socialism, and others decline when reforms begin. Illegal economic activities can be grouped in the following broad categories:
• Corruption—abusing power related to a particular job or position to gain unlawfully wealth or influence.
• Fraud—financial gain obtained through loopholes in regulations, manipulation, or exploitation of public or personal trust (smuggling, illegal operations with hard currency, falsified bankruptcies, forgery, falsified credits, illegal capital flight, and so on).
• Theft and extortion (racket)—direct (physical) intervention of criminals; expropriation of property or the property rights of others.
• Tax evasion. This category is beyond the scope of the this aticle. (Russia's tax police in the first half of 1996 uncovered about 12,000 cases of evasion resulting in 3,100 criminal cases, raising 13 trillion rubles for state coffers, and lodged penalties that will bring in another 9.3 trillion rubles, Interfax News Agency reported. Compared with previous years, the numbers reveal a change in government policies on tax evasion. During 1994 only 1,500 tax offenses were filed in court, of which only 20 cases were considered as criminal and only 10 saw sentences pronounced. In 1995, of 4,229 tax evasion cases, 1,611 were considered criminal and 312 evaders were sent to court.) There is a crucial difference between the "second" economy and economic crime. The "second" economy is a productive sector guilty of one main crime—tax evasion; economic crime is only a redistributor of wealth.
Crime Then and Now
In the Soviet Union theft of socialist property, corruption, and illegal hard currency operations were the major economic crimes. 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...