The term "white-collar crime" refers to financially motivated, nonviolent or non-directly violent

crime In ordinary language, a crime is an unlawful act punishable by a state or other authority. The term ''crime'' does not, in modern criminal law, have any simple and universally accepted definition,Farmer, Lindsay: "Crime, definitions of", in C ...

committed by individuals, businesses and government professionals. It was first defined by the sociologist Edwin Sutherland in 1939 as "a crime committed by a person of respectability and high social status in the course of their occupation". Typical white-collar crimes could include wage theft,

fraud In law, fraud is intentional deception to secure unfair or unlawful gain, or to deprive a victim of a legal right. Fraud can violate civil law (e.g., a fraud victim may sue the fraud perpetrator to avoid the fraud or recover monetary compen ...

bribery Bribery is the offering, giving, receiving, or soliciting of any item of value to influence the actions of an official, or other person, in charge of a public or legal duty. With regard to governmental operations, essentially, bribery is "Corru ...

Ponzi scheme A Ponzi scheme (, ) is a form of fraud that lures investors and pays profits to earlier investors with funds from more recent investors. Named after Italian businessman Charles Ponzi, the scheme leads victims to believe that profits are coming ...

insider trading Insider trading is the trading of a public company's stock or other securities (such as bonds or stock options) based on material, nonpublic information about the company. In various countries, some kinds of trading based on insider information ...

, labor racketeering,

embezzlement Embezzlement is a crime that consists of withholding assets for the purpose of conversion of such assets, by one or more persons to whom the assets were entrusted, either to be held or to be used for specific purposes. Embezzlement is a type ...

cybercrime A cybercrime is a crime that involves a computer or a computer network.Moore, R. (2005) "Cyber crime: Investigating High-Technology Computer Crime," Cleveland, Mississippi: Anderson Publishing. The computer may have been used in committing the ...

copyright infringement Copyright infringement (at times referred to as piracy) is the use of works protected by copyright without permission for a usage where such permission is required, thereby infringing certain exclusive rights granted to the copyright holder, ...

money laundering Money laundering is the process of concealing the origin of money, obtained from illicit activities such as drug trafficking, corruption, embezzlement or gambling, by converting it into a legitimate source. It is a crime in many jurisdictions ...

identity theft Identity theft occurs when someone uses another person's personal identifying information, like their name, identifying number, or credit card number, without their permission, to commit fraud or other crimes. The term ''identity theft'' was c ...

, and

forgery Forgery is a white-collar crime that generally refers to the false making or material alteration of a legal instrument with the specific intent to defraud anyone (other than themself). Tampering with a certain legal instrument may be forbidd ...

. White-collar crime overlaps with

corporate crime In criminology, corporate crime refers to crimes committed either by a corporation (i.e., a business entity having a separate legal personality from the natural persons that manage its activities), or by individuals acting on behalf of a corpo ...

Definitional issues

Modern criminology generally prefers to classify the type of crime and the topic: *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

FBI The Federal Bureau of Investigation (FBI) is the domestic intelligence and security service of the United States and its principal federal law enforcement agency. Operating under the jurisdiction of the United States Department of Justice, ...

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). While the true extent and cost of white-collar crime are unknown, the FBI and the Association of Certified Fraud Examiners estimate the annual cost to the United States to fall between $300 and $660 billion. * 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 point to the essential neutrality of a crime as enacted in a

statute A statute is a formal written enactment of a legislative authority that governs the legal entities of a city, state, or country by way of consent. Typically, statutes command or prohibit something, or declare policy. Statutes are rules made by ...

. 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. * By organizational culture rather than the offender or offense which overlaps with

organized crime Organized crime (or organised crime) is a category of transnational, national, or local groupings of highly centralized enterprises run by criminals to engage in illegal activity, most commonly for profit. While organized crime is generally th ...

. Appelbaum and Chambliss 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 Price fixing is an anticompetitive agreement between participants on the same side in a market to buy or sell a product, service, or commodity only at a fixed price, or maintain the market conditions such that the price is maintained at a given ...

false advertising False advertising is defined as the act of publishing, transmitting, or otherwise publicly circulating an advertisement containing a false claim, or statement, made intentionally (or recklessly) to promote the sale of property, goods, or servic ...

, etc.

Relationship to other types of crime

Blue-collar crime

The types of crime committed are a function of what is available to the potential offender. Thus, those employed in relatively unskilled environments have fewer opportunities to exploit than those who work in situations where large financial transactions occur. Blue-collar crime tends to be more obvious and thus attracts more active police attention such as

vandalism Vandalism is the action involving deliberate destruction of or damage to public or private property. The term includes property damage, such as graffiti and defacement directed towards any property without permission of the owner. The term ...

or shoplifting. In contrast, white-collar employees can incorporate legitimate and criminal behavior, thus making themselves less obvious when committing the crime. Therefore, 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.

Corporate crime

Corporate crime benefits the corporation (company or other type of business organization), rather than individuals. It may, however, result from decisions of high-ranking individuals within the corporation. Corporations are not, unlike individuals, litigated in criminal courts, which means the term "crime" does not really apply. Litigation usually takes place in civil courts or by institutions with jurisdiction over specific types of offences, such as the U.S. Securities and Exchange Commission that litigates violations of financial market and investment statutes.

State-corporate crime

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. Although law enforcement claims to have prioritized white-collar crime, evidence shows that it continues to be a low priority. When senior levels of a corporation engage in criminal activity using the company this is sometimes called control fraud.

Organized transnational crime

Organized

transnational crime Transnational crimes are crimes that have actual or potential effect across national borders and crimes that are intrastate but offend fundamental values of the international community. The term is commonly used in the law enforcement and academic ...

is organized criminal activity that takes place across national jurisdictions, and with advances in transportation and information technology, law enforcement officials and policymakers have needed to respond to this form of crime on a global scale. Some examples include

human trafficking Human trafficking is the trade of humans for the purpose of forced labour, sexual slavery, or commercial sexual exploitation for the trafficker or others. This may encompass providing a spouse in the context of forced marriage, or the extract ...

drug smuggling The illegal drug trade or drug trafficking is a global black market dedicated to the cultivation, manufacture, distribution and sale of prohibited drugs. Most jurisdictions prohibit trade, except under license, of many types of drugs through ...

, illegal arms dealing, terrorism, and

. Although it is impossible to precisely gauge transnational crime, the Millennium Project, an international think tank, assembled statistics on several aspects of transnational crime in 2009: *World illicit trade of almost $780 billion *Counterfeiting and piracy of $300 billion to $1 trillion *Global drug trade of $321 billion

Occupational crime

Individuals may commit crime during employment or unemployment. The two most common forms are

theft Theft is the act of taking another person's property or services without that person's permission or consent with the intent to deprive the rightful owner of it. The word ''theft'' is also used as a synonym or informal shorthand term for som ...

and

. Theft can be of varying degrees, from a pencil to furnishings to a car.

Insider trading Insider trading is the trading of a public company's stock or other securities (such as bonds or stock options) based on material, nonpublic information about the company. In various countries, some kinds of trading based on insider information ...

, the trading of stock by someone with access to publicly unavailable information, is a type of fraud.

Crimes related to national interests

The crimes related to the national interests consist mainly of treason. In the modern world, there are a lot of nations which divide the crimes into some laws. "Crimes Related to Inducement of Foreign Aggression" is the crime of communicating with aliens secretly to cause foreign aggression or menace. "Crimes Related to Foreign Aggression" is the treason of co-operating with foreign aggression positively regardless of the national inside and outside. "Crimes Related to Insurrection" is the internal treason. Depending on a country, criminal conspiracy is added to these. One example is Jho Low, a mega thief and traitor who stole billions in USA currency from a Malaysian government fund and is now on a run as a fugitive.

Demographics

According to a 2016 study,

A considerable percentage of white-collar offenders are gainfully employed middle-aged Caucasian men who usually commit their first whitecollar offense sometime between their late thirties through their mid-forties and appear to have middle-class backgrounds. Most have some higher education, are married, and have moderate to strong ties to community, family, and religious organizations. Whitecollar offenders usually have a criminal history, including infractions that span the spectrum of illegality, but many do not overindulge in vice. Recent research examining the five-factor personality trait model determined that white-collar offenders tend to be more neurotic and less agreeable and conscientious than their non-criminal counterparts.

Punishment

In the United States, sentences for white-collar crimes may include a combination of

imprisonment Imprisonment is the restraint of a person's liberty, for any cause whatsoever, whether by authority of the government, or by a person acting without such authority. In the latter case it is " false imprisonment". Imprisonment does not necessar ...

, fines,

restitution The law of restitution is the law of gains-based recovery, in which a court orders the defendant to ''give up'' their gains to the claimant. It should be contrasted with the law of compensation, the law of loss-based recovery, in which a court o ...

community service Community service is unpaid work performed by a person or group of people for the benefit and betterment of their community without any form of compensation. Community service can be distinct from volunteering, since it is not always performed ...

, disgorgement,

probation Probation in criminal law is a period of supervision over an offender, ordered by the court often in lieu of incarceration. In some jurisdictions, the term ''probation'' applies only to community sentences (alternatives to incarceration), such ...

, or other alternative punishment. These punishments grew harsher after the Jeffrey Skilling and

Enron scandal The Enron scandal was an accounting scandal involving Enron Corporation, an American energy company based in Houston, Texas. Upon being publicized in October 2001, the company declared bankruptcy and its accounting firm, Arthur Andersen then ...

, when the

Sarbanes–Oxley Act The Sarbanes–Oxley Act of 2002 is a United States federal law that mandates certain practices in financial record keeping and reporting for corporations. The act, (), also known as the "Public Company Accounting Reform and Investor Protecti ...

of 2002 was passed by the

United States Congress The United States Congress is the legislature of the federal government of the United States. It is bicameral, composed of a lower body, the House of Representatives, and an upper body, the Senate. It meets in the U.S. Capitol in Washing ...

and signed into law by President

George W. Bush George Walker Bush (born July 6, 1946) is an American politician who served as the 43rd president of the United States from 2001 to 2009. A member of the Republican Party, Bush family, and son of the 41st president George H. W. Bush, h ...

, defining new crimes and increasing the penalties for crimes such as

mail and wire fraud Mail fraud and wire fraud are terms used in the United States to describe the use of a physical or electronic mail system to defraud another, and are federal crimes there. Jurisdiction is claimed by the federal government if the illegal activi ...

. Sometimes punishment for these crimes could be hard to determine due to the fact that convincing the courts that what the offender has done is challenging within itself. In other countries, such as

China China, officially the People's Republic of China (PRC), is a country in East Asia. It is the world's most populous country, with a population exceeding 1.4 billion, slightly ahead of India. China spans the equivalent of five time zones and ...

, white-collar criminals can be given the

death penalty Capital punishment, also known as the death penalty, is the state-sanctioned practice of deliberately killing a person as a punishment for an actual or supposed crime, usually following an authorized, rule-governed process to conclude that t ...

under aggravating circumstances, yet some countries have a maximum of 10–25 years imprisonment. Certain countries like

Canada Canada is a country in North America. Its Provinces and territories of Canada, ten provinces and three territories extend from the Atlantic Ocean to the Pacific Ocean and northward into the Arctic Ocean, covering over , making it the world ...

consider the relationship between the parties to be a significant feature on sentence when there is a breach of trust component involved. Questions about sentencing disparity in white-collar crime continue to be debated. The

, concerned with identifying this type of offense, collects annual statistical information on only three categories: fraud, counterfeiting/forgery, and embezzlement. All other types of white-collar crime are listed in a "miscellaneous" category. In the United States, the longest sentences for white-collar crimes have been for the following: Sholam Weiss (845 years for racketeering, wire fraud and money laundering in connection with the collapse of National Heritage Life Insurance Company); Norman Schmidt and Charles Lewis (330 years and 30 years, respectively, for "high-yield investment" scheme); Bernard Madoff (150 years for $65 billion fraud scheme); Frederick Brandau (55 years for $117 million

); Eduardo Masferrer (30 years for accounting fraud); Chalana McFarland (30 years for mortgage fraud scheme); Lance Poulsen (30 years for $2.9 billion fraud).

Theories

From the perspective of an offender, the easiest targets to entrap in "white collar" crime are those with certain degree of vulnerability or those with symbolic or emotional value to the offender. Examples of these people can be family members, clients, and close friends who are wrapped up in personal or business proceedings with the offender. The way that most criminal operations are conducted is through a series of different particular techniques. In this case, a technique is a certain way to complete a desired task. When one is committing a crime, whether it be shoplifting or tax fraud, it is always easier to successfully pull off the task with experience in the technique. Shoplifters who are experienced at stealing in plain sight are much more successful than those who do not know how to steal. The major difference between a shoplifter and someone committing a white collar crime is that the techniques used are not physical but instead consist of acts like talking on the phone, writing, and entering data. Often these criminals utilize the "blame game theory", a theory in which certain strategies are utilized by an organization or business and its members in order to strategically shift blame by pushing responsibility to others or denying misconduct. This theory is particularly used in terms of organizations and indicates that offenders often do not take blame for their actions. Many members of organizations will try to absolve themselves of responsibility when things go wrong. Forbes Magazine lays out four theories for what leads a criminal to commit a "white collar" crime. The first is that there are poorly designed job incentives for the criminal. Most finance professionals are given a certain type of compensation or reward for short-term mass profits. If a company incentivizes an employee to help commit a crime, such as assisting in a Ponzi Scheme, many employees will partake in order to receive the reward or compensation. Often, this compensation is given in the form of a cash "bonus" on top of their salaries. By doing a task in order to receive a reward, many employees feel as though they are not responsible for the crime, as they have not ordered it. The "blame game theory" comes into play as those being asked to carry out the illegal activities feel as though they can place the blame on their bosses instead of themselves. The second theory is that the company's management is very relaxed when it comes to enforcing ethics. If unethical practices are already a commonplace in the business, employees will see that as a "green light" to conduct unethical and unlawful business practices to further the business. This idea also ties into Forbes' third theory, that most stock traders see unethical practices as harmless. Many see white collar crime as a victimless crime, which is not necessarily true. Since many of these stock traders cannot see the victims of their crimes, it seems as if it hurts no one. The last theory is that many firms have unrealistic, large goals. They preach the mentality that employees should "do what it takes".

References

External links

White-Collar Crime
{{DEFAULTSORT:White-Collar Crime White-collar criminals, Corporate crime Crime 1930s neologisms