white-collar crime

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Within the field of criminology, white-collar crime has been defined by Edwin Sutherland as "a crime committed by a person of respectability and high social status in the course of his occupation" (1939). Sutherland was a proponent of Symbolic Interactionism, and believed that criminal behavior was learned from interpersonal interaction with others. White-collar crime therefore overlaps with corporate crime because the opportunity for fraud, bribery, insider trading, embezzlement, computer crime, identity theft, and forgery is more available to white-collar employees.

Historical background

The term white-collar crime only dates back to 1939. Professor Edwin Hardin Sutherland was the first to coin the term, and hypothesize white-collar criminals attributed different characteristics and motives than typical street criminals. Mr. Sutherland originally presented his theory in an address to the American Sociological Society in attempt to study two fields, crime and high society, which had no previous empirical correlation. He defined his idea as "crime committed by a person of respectability and high social status in the course of his occupation." Many denote the invention of Sutherland's idiom to the explosion of U.S business in the years following the Great Depression. Sutherland noted that in his time, "less than two percent of the persons committed to prisons in a year belong to the upper-class." His goal was to prove a relation between money, social status, and likelihood of going to jail for a white-collar crime, compared to more visible, typical crimes. Although the percentage is a bit higher today, numbers still show a large majority of those in jail are poor, "blue-collar" criminals, despite efforts to crack down on corporate crime.

Other fiscal laws were passed in the years prior to Sutherland's studies including antitrust laws in the 1920's, and social welfare laws in the 1930's. After the Depression, people went to great lengths to rebuild their financial security, and it is theorized this led many hard workers who felt they were underpaid to take advantage of their positions. Despite the great lengths Sutherland went to describe exactly what he categorized as white-collar crime, the clarity of the subject was, and is still rather broad and ambiguous.

Much of Sutherland's work was to separate and define the differences in blue collar street crimes such as murder, arson, burglary, theft, assault, rape and vandalism, which are often blamed on psychological, associational, and structural factors. Instead, white-collar criminals are opportunists, who over time learn they can take advantage of their circumstances to accumulate financial gain. They are educated, intelligent, affluent, confident individuals, who were qualified enough to get a job which allows them the unmonitored access to often large sums of money. Many also use their intelligence to con their victims into believing and trusting in their credentials. Many do not start out as criminals, and in many cases never see themselves as such.^[1]

Definitional issues

Modern criminology generally rejects a limitation of the term by reference to type of crime and the topic is now divided:

• By the type of offense, e.g. property crime, economic crime, and other corporate crimes like environmental and health and safety law violations. Some crime is only possible because of the identity of the offender, e.g. transnational money laundering requires the participation of senior officers employed in banks. But the Federal Bureau of Investigation has adopted the narrow approach, defining white-collar crime as "those illegal acts which are characterized by deceit, concealment, or violation of trust and which are not dependent upon the application or threat of physical force or violence" (1989, 3). Because this approach is relatively pervasive in the United States, the record-keeping does not adequately collect data on the socioeconomic status of offenders which, in turn, makes research and policy evaluation problematic. While the true extent and cost of white-collar crime are unknown, it is estimated to cost the United States more than $300 billion annually, according to the FBI.
• By the type of offender, e.g. by social class or high socioeconomic status, the occupation of positions of trust or profession, or academic qualification, researching the motivations for criminal behavior, e.g. greed or fear of loss of face if economic difficulties become obvious. Shover and Wright (2000) point to the essential neutrality of a crime as enacted in a statute. It almost inevitably describes conduct in the abstract, not by reference to the character of the persons performing it. Thus, the only way that one crime differs from another is in the backgrounds and characteristics of its perpetrators. Most if not all white-collar offenders are distinguished by lives of privilege, much of it with origins in class inequality.
• By organizational culture rather than the offender or offense which overlaps with organized crime. Appelbaum and Chambliss (1997, 117) offer a twofold definition:
  • Occupational crime which occurs when crimes are committed to promote personal interests, say, by altering records and overcharging, or by the cheating of clients by professionals.
  • Organizational or corporate crime which occurs when corporate executives commit criminal acts to benefit their company by overcharging or price fixing, false advertising, etc.

Relationship to other types of crime

Blue-collar crime

The types of crime committed are a function of the opportunities available to the potential offender. Thus, those employed in relatively unskilled environments and living in inner-city areas have fewer "situations" to exploit (see Clarke: 1997) than those who work in "situations" where large financial transactions occur and live in areas where there is relative prosperity. Blue-collar crime tends to be more obvious and attract more active police attention (e.g. for crimes such as vandalism or shoplifting which protect property interests), whereas white-collar employees can intermingle legitimate and criminal behavior and be less obvious when committing the crime. Thus, blue-collar crime will more often use physical force whereas in the corporate world, the identification of a victim is less obvious and the issue of reporting is complicated by a culture of commercial confidentiality to protect shareholder value. It is estimated that a great deal of white collar crime is undetected or, if detected, it is not reported.

State-corporate crime

Because the negotiation of agreements between a state and a corporation will be at a relatively senior level on both sides, this is almost exclusively a white-collar "situation" which offers the opportunity for crime.

Differential treatment for white-collar offenders

This section does not cite any references or sources. Please help improve this article by adding citations to reliable sources. Unsourced material may be challenged and removed. (November 2007)

The empirical data clearly demonstrate a double standard between white-collar crimes and so-called street crimes. There are a number of reasons to explain why white-collar criminals are not more rigorously pursued. By virtue of their relative affluence, those accused as white-collar offenders are able to afford the fees of the best lawyers, and may have friends among senior ranks of the political elite (see Cronyism), the judiciary and the federal law enforcement agencies. These connections often not only ensure favorable treatment on an individual basis, but also enable laws to be drafted or resource allocations to be shifted to ensure that such crimes are not defined or enforced too strictly. It is a fact that virtually no police effort goes into fighting white-collar crime, and the enforcement of many corporate crimes is put into the hands of government agencies like the United States Environmental Protection Agency which can act only as watchdogs and point the finger when an abuse is discovered. This more benign treatment is possible because the true cost of white-collar crime, while high in nationally consolidated accounts, is diffused through the bank balances of millions either by way of share value reductions, or nominal increases in taxation, or increases in the cost of insurance. And because it can be difficult to assign blame, e.g. environmental damage may be serious but corporations cannot be sent to jail and, if those senior officers are removed from their positions, it may be more damaging to the organization itself which employs many ordinary and innocent people, and to the shareholders who had no role to play in taking criminal decision. Different public policies are at work and there are differences in the level of public interest, case complexity, and a lack of white-collar related literature, all of which has a significant effect on the way white-collar offenders are sentenced, punished, and perceived by the public.

Another reason for differential treatment might be the fact that criminal penalties tend to be more reflected to the degree of physical force or violence involved than to the amount of monetary loss, all other things being equal. Because white-collar crimes are committed by those with opportunities that do not require violence, they are far less likely to garner more severe criminal penalties. For example, someone who mugs a victim on the street by threatening to knife them, and steals their wallet, might very likely be punished with a more severe sentence than an inside trader who cheats shareholders out of a million dollars.

See also

• Accounting scandals
• Con man
• FBI
• Fraud
• INTERPOL
• Organized crime
• Sarbanes-Oxley Act
• Securities fraud
• Allen Stanford
• Bernard Madoff
• Enron
• MCI Communications

References

Further reading and references

• Appelbaum, Richard P. & Chambliss, William J. (1997). Sociology: A Brief Introduction. New York: Longman. ISBN 0-673-98279-3
• Barnett, Cynthia. (Undated). The Measurement of White-Collar Crime Using Uniform Crime Reporting (UCR) Data. [1]
• Clarke, Ronald (ed). (1997). Situational Crime Prevention: Successful Case Studies (2nd edition). New York: Criminal Justice Press. ISBN 0-911577-38-6
• Dillon, Eamon The Fraudsters - How Con Artists Steal Your Money Chapter 5, Pillars of Society, published September 2008 by Merlin Publishing, Ireland ISBN 978-1-903582-82-4
• Friedrichs, David O. (2003) Trusted Criminals: White Collar Crime in Contemporary Society, Wadsworth. [ISBN 0-495-00604-1]
• Geis, G., Meier, R. & Salinger, L. (eds.) (1995). White-collar Crime: Classic & Contemporary Views. NY: Free Press.
• Green, Stuart P. (2006). Lying, Cheating, and Stealing: A Moral Theory of White Collar Crime. Oxford: Oxford University Press.
• Lea, John. (2001). Crime as Governance: Reorienting Criminology. [2]
• Leap, Terry L. (2007) Dishonest Dollars: The Dynamics of White-Collar Crime. Ithaca: Cornell University Press. ISBN 978-0-8014-4520-0
• Newman, Graeme R. & Clarke, Ronald V. (2003). Superhighway Robbery: Preventing E-commerce Crime. Portland, Or: Willan Publishing. ISBN 1-84392-018-2
• Reiman, J. (1998). The Rich get Richer and the Poor get Prison. Boston: Allyn & Bacon.
• Pontell, H. & Tillman, R. (1998). Profit Without Honor: White-collar Crime and the Looting of America. Upper Saddle River, NJ: Prentice Hall.
• Shapiro, B. (1995). "Collaring the Crime, not the Criminal: Reconsidering the Concept of White-collar Crime", American Sociological Review 55: 346-65.
• Simon, D. & Eitzen, D. (1993). Elite Deviance. Boston: Allyn & Bacon.
• Simon, D. & Hagan, F. (1999). White-collar Deviance. Boston: Allyn & Bacon
• Shover, Neal & Wright, John Paul (eds.) (2000). Crimes of Privilege: Readings in White-Collar Crime. Oxford: Oxford University Press. ISBN 0-19-513621-7
• Sutherland, Edwin Hardin (1949). White Collar Crime. New York: Dryden Press.
• Thiollet, J.P. (2002). Beau linge et argent sale — Fraude fiscale internationale et blanchiment des capitaux, Paris, Anagramme ed. ISBN 2 914571178
• U.S. Department of Justice, Federal Bureau of Investigation (1989). White Collar Crime: A Report to the Public. Washington, D.C.: Government Printing Office.

External links

• White Collar Crime Legal Blog
• National White Collar Crime Center
• White Collar Crime Blog for Public