You are on page 1of 41

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.

You might also like