1.White Collar Crime Criminology (1)

White collar crime

Informed ‘ology…..

Examples

• BP fined $373 million by US government for a fatal explosion at a Texas refinery, breaking environmental laws and fraud,

• Company director jailed for theft • A director who presided over redundancies as she

swindled money from a company to support a lavish lifestyle has been jailed for five years.

• ITV faces £70m fine after viewers cheated out of millions on premium phone-ins

…..continued

• Three such men pleaded guilty to a form of bank robbery. The so-called Natwest Three were accused of defrauding their employer of some $7m while working with a client called Enron.

• Two people convicted of insider dealing

Corporate crime& Occupational crime

• Consumer fraud • Four men who formed part of a food fraud

gang selling condemned poultry have been jailed for a total of 10 years.

• The group had made more than £1m by selling 450 tons of unfit meat to hospitals, schools and leading supermarkets.

1987: Lester Piggott jailed for three years

• Former champion jockey, Lester Piggott, has been sentenced to three years imprisonment after being found guilty of an alleged tax fraud of over £3m.

• The sentence condemned as a "terrible injustice" by the Newmarket trainer, David Thom, who said Piggott had put "more money in the taxman's coffers than any 100 people could have done."

Edwin Sutherland• white-collar crime as 'a crime committed by a

person of respectability and high social status in the course of his occupation' (1949: 9).

• controversy surrounding definition • Sutherland refers to the white-collar worker as

'he' • attention to social status - respectable people

did commit crime• contradicted ‘established’ notion that crime was

committed exclusively by lower classes

Sutherland

• highlight class bias within criminal justice system

• lack of prosecutions of corporate executives and lenient sentences.

• Tappen (1947) crimes committed by business people are inherently different from other crimes.

• white-collar crime actually constitutes normative practice for businesses!

Definitions…• Tombs and Whyte (2001a: 320) have expanded

the definition to include: • A heterogeneous group of offences committed

by people of relatively high status or enjoying relatively high levels of trust, and made possible by their employment. Such crimes typically include fraud, embezzlement, tax violations, and various forms of workplace theft and fiddling in which the organisation, its customers or other organisations are the victims.

Characteristics of White-collar Crime

• Low Visibility• Complexity• Diffusion of responsibility • Diffusion of victimisation.

Low Visibility

• offenders are legitimately at the scene of the crime; i.e. they are at work, even if they are conducting illegitimate activities.

• many businesses are unaware that they are being victimised,

• white-collar crimes are particularly resistant to detection.

• If detected - often not reported to public authorities,

• may be seen as revealing weaknesses within management structures within organisation

• offenders quietly dismissed not publicly charged.

Complexity

• involve occupational expertise. • highly organised, a large number of

employees, and may be committed over a relatively long period of time.

• Croall (1992: 10) 'a complex web of falsifications, cover ups, action and inaction' which make identification difficult.

Diffusion of Responsibility • Organisations characterised by a division of labour

• difficult to determine who is responsible • organisational offences may involve neglect or the

deliberate flouting of many regulations covering health, safety, quality control, information, and sales practices.

• individuals deny blame - they were only following orders or because their orders were not followed.

• often impossible to assign blame or responsibility to any one party.

The Corporate Manslaughter and Corporate Homicide Act 2007

• new statutory offence in England, Wales and Northern Ireland of "corporate manslaughter", (Scotland "corporate homicide".)

• senior management?• "gross breach" of the duty of care • Penalties include an unlimited fine,

remedial orders and publicity orders

Special Forces flight XV179

• Hercules planes should have been fitted with explosion-suppressant foam (ESF) that can prevent fuel tanks exploding if hit by enemy fire. 10 dead….

Diffusion of Responsibility• occupational crimes result from negligence • offenders cannot be accused of intention to kill,

injure, or damage. • many occupational crimes less likely to be

defined as criminal • more likely to be labelled as 'accidents' rather

than violence.

The Diffusion of Victimisation

• often diffused with no identifiable single victim. • The victim may be an abstract entity such as a

government or corporation • each victim may only sustain a minimal loss. • Sutherland (1949) 'rippling effect' - small losses

to individuals but huge gains for the offenders • effects further minimised as rarely involve

physical violence or public order offences

Incidence and Prevalence of White-collar Crime

• Box (1983) white-collar crime widespread, • more serious consequences for individuals

and society than conventional ‘street’ crimes.

• 'true' level of white-collar crime?

Detecting and Prosecuting White-collar Crime

• conventional crime known following victims' reporting of offence or e.g. BCS

• victims of white-collar crime often unable to detect crime has been committed

• Employers hire staff to perform tasks that they either cannot do or directly supervise, or lack relevant expertise to evaluate

Detecting and Prosecuting White-collar Crime

• Consumers employ others to perform tasks that they do not have expertise to do themselves.

• few potential victims have expertise or knowledge to protect themselves from white-collar crime.

• Even if they are aware of their victimisation they may not label behaviour as criminal and consequently report it.

Detecting and Prosecuting White-collar Crime

• reason for non-reporting - victims feel responsible for their own victimisation

• Levi (1987) argues that victims of fraud may accept the notion of 'let the buyer beware' (caveat emptor) and blame themselves for letting themselves be 'ripped off

• Also 'too trivial'

Detecting and Prosecuting White-collar Crime

• Fear of reprisals or embarrassment. • Victims worried about losing their jobs or

being labelled as troublemakers. • Employers concerned about their

reputation or losing ‘good’ staff. • Victims have little confidence in agencies

to do anything

Detecting and Prosecuting White-collar Crime

• proactive detection is necessary, responsibility with organisation itself

• or with public enforcement agencies (e.g. DTI, H and S executive, SFO, HMRC, GLA, Audit Commission)

• detection - time-consuming and expensive,

Problems ?

• Agencies have limited resources (and targets to meet) to make routine inspections, to test products, and to check and monitor compliance.

• Crimes go undetected. • Also some offences more likely to be detected

than others (easier and cheaper to detect). • Levi (1987) Fraud Squad concentrate on simpler

cases (more likely to be successful).

Detecting and Prosecuting White-collar Crime

• when crimes are detected - difficult to prove offence committed and who is responsible

• complexity of offences creates difficulties in establishing legal proof

• key witnesses may not want to testify for fear of implicating themselves.

Furthermore….

• Companies, particularly large multinationals, obstruct investigations, and have capacity to do so.

• difficulties & cost of detection & prosecution mean that both companies and law enforcement agencies prefer to deal with offences informally rather than formally. ('compliance strategies‘).

• only minority are prosecuted - few dealt with publicly.

Lenient Sentences

• Few offenders are sent to prison. • Offenders - they did not intend to cause harm or

were not directly responsible for the harm caused. • absence of violence and the diffusion of

responsibility means offenders are not seen as dangerous

• Often first-time offenders - ‘impeccable’ characters who argue that loss of their reputation or livelihood is punishment enough.

Ambiguous Laws• Laws are complex, vaguely drafted and difficult

to interpret. • Leaving loopholes which can be exploited. • Fine line between acceptable and unacceptable

behaviour • Public tolerance • diffusion of responsibility - who is legally and

criminally responsible?

Ambiguous Criminal Status

• The fine lines between legal, illegal, and criminal behaviour make the criminal status of many offences ambiguous.

• For many white-collar crimes, the reason for their illegal status is not that they are morally wrong but that there is a need to protect the public.

• the acts are not defined as wrong or criminal in themselves by perpetrators or victims

Theoretical Perspectives on White-collar Crime

• criminology concentrated on conventional street crime committed lower socio-economic groups.

• traditional explanations do not attempt to explain white-collar crime.

• Theories criticised for accepting association between crime and low socio-economic status.

• radical criminology enhanced study of white-collar crime,

Theoretical Perspectives on White-collar Crime

• white-collar crime confirms that official criminal statistics unrepresentative

• showed the law criminalised lower-class crime at the expense of crimes of ‘powerful’.

• White-collar crime also provided the sociology of law (why are some acts are labelled criminal and why some are not?)

Individual Explanations

• 'rotten apple' thesis and involve blaming a particular individual or group of individuals

• Gross (1978), personality required for success in business also associated with those of crime

• Ambitious people fought their way to the top despite strong competition; they were shrewd, ruthless. pathological rather than intelligent,

• they proactively looked for and took openings; were morally flexible.

Individual Explanations

• 'rotten apple' approach - a form of scape-goating,

• individual blamed for something that they were coerced into by nature of their employment.

Illegal Opportunities

• Some occupations may be more prone to crime than others because they provide better opportunities than others to commit crimes.

• the social organisation of work and the social organisation of trust (Shapiro (1990).

• Mars (1982: 28-33) argues that some occupations provide more opportunities than others for what he terms 'fiddling'.

Illegal Opportunities

• Therefore, some jobs are more 'fiddle prone' than others as they provide different 'illegitimate opportunity structures'.

• However, this does not mean that opportunities are always exploited

• But why do some people commit white-collar crimes while others refrain.

Social Organisation of Work

• Large organisations with diffuse responsibilities not only provide little opportunity for checking

• also create situations where individuals can deny responsibility.

• difficult to distinguish praiseworthy behaviour from illegal actions

• Clinard and Yeager (1980) argue that size, delegation, and specialisms associated with large organisations result in a climate favourable to commission of offences

Social Organisation of Work

• On a micro-level organisation of work can also result in illegal behaviour. If job is low paid - may result in employee theft

• types of illegal behaviour depend partly on the avenues available for complaining about unsatisfactory working conditions or pay, and on whether anything is done (or felt to be done) as a consequence.

The Pursuit of Legitimate Business Goals

• white-collar crime linked to capitalism and legitimate business goals. fine line between 'entrepreneuriality and flair' and 'sharp practice and fraud' (Mars, 1982: 49).

• Officials condemn the condemners (Box, 1983). • .

The Pursuit of Legitimate Business Goals

• This involves denying the legitimacy of the law or those attempting to make them comply.

• State has no place in regulating free markets.

• Officials also can appeal to higher loyalty, thus releasing them from the moral bind of the law

Box (1983)• accepting responsibility for their behaviour while

arguing that by being loyal to the corporation (by putting profit and gain before law) they were obeying a 'superior moral imperative';

• morality over legalism

Box (1983)

• Business ethics are morally superior to formal legalism. Free enterprise is morally superior to the law.

• Does law interfere with the pursuit of 'legitimate' business goals

Masculinities and White-collar Crime

• Masculinity, as traditionally studied within criminology, has being predominantly restricted to working-class masculinities (Collier, 1998).

• feminists (Smart, 1990; Stanko, 1994) - masculinities cross class boundaries.

• little written on this area• masculinities remains important for a fuller

understanding of WCC.