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W
hite collar crime is
fundamentally different
from other types of
illegal activity. The accountant who
clandestinely siphons money from
an employer, then cooks the books
to conceal their activities, is often a
skilled professional in a position of
trust within a company. Invariably,
financially motivated, white collar
crime includes all kinds of fraud,
insider trading, and embezzlement.
White collar crime often takes
months or even years to uncover.
If a member of the public witnesses
murder, theft, or extortion – all of
which are categorized as “blue
collar” crimes by criminologists
because they generally involve
physical effort, often for low
rewards – they would immediately
recognize that a crime is taking
place. However, a person tappingaway at computer keys raises no
alarm at all, because it does not fit
society’s stereotype of a criminal.
White collar crime is also
hard to detect because it is often
complex, and is therefore difficult
to understand. Without specialized
knowledge, even a seasoned
investigator is unlikely to notice
anything untoward. It is difficult to
even estimate the extent of white
collar crime. For this reason, it may
be far more prevalent than its blue
collar counterpart.Impact on society
From an economic standpoint,
white collar crime can be
devastating, on an individual,
corporate, and even national level.
The financial damage inflicted by
the fraudster Bernie Madoff
affected US citizens from all walksof life. More importantly, the impact
of economic ruin can often run far
deeper than the simple loss of
money. According to research
conducted by Oxford University,
after the financial crash of 2008 –
which was partly precipitated and
significantly worsened by mortgage
fraud, investment scams, bribery,
and unethical business practices –
an estimated 10,000 Americans
and Europeans committed suicide.
The US economy and those of
many European nations are still
struggling to recover.
Criminal psychologist Dr Robert
Hare, developer of the diagnostic
tool known as the Psychopathic
Checklist, once said that he should
have conducted his research on
Wall Street rather than in prisons.
When asked about the relative
impact of serial killers, he repliedINTRODUCTION
1720
1869
1984
1990
1920
1921–22
In India, chemicals from the
US-owned Union Carbide factory
in Bhopal kill thousands, leading
to accusations of culpable
homicide against the
company’s CEO.Speculators James Fisk and
Jay Gould manipulate the
US gold market, which
endangers the economy.In the US, the collapse
of a fraudulent
investment scheme
set up by Charles Ponzi
collapses, loses hundreds
of investors' savings.In the Teapot Dome
scandal, US Secretary
of the Interior Albert
Bacon Fall leases oil
reserves in exchange
for bribes.In France, the plunge
in the value of the
Mississippi Company,
which is restructuring
France's national debt,
causes a major
financial crash.In London, thieves
rob money broker
messenger John Goddard
at knifepoint and seize
£292 million in bonds.098-099_Timeline_3.indd 98 13/01/2017 15:10
99
that serial killers devastate
families, while white collar
criminals destroy societies.
Nonetheless, punishment for white
collar crime tends to be more
lenient than for violent crimes.Apportioning the blame
Criminologists identify two broad
categories of white collar crime:
“individual” and “corporate” (also
known as “structural” crime).
Individual white collar crime
occurs when a person or persons
working within a political or private
organization exploits their position
without the knowledge of the
institution, and profits through their
illegal activities. They may be in
league with other members of the
organization, or suppliers, or clients,
but it is a small minority of
employees that are corrupt ratherthan the entire organization. The
case of Albert Bacon Fall – who, in
1922, was convicted of conspiracy
and bribery while working as US
Secretary of the Interior in what
became known as the Teapot Dome
scandal – typifies this behaviour.
More troubling are the corporate
crimes such as the Enron scandal,
Siemens scandal, and the Bhopal
Disaster. Here, criminality is
located, motivated, and enacted
at an organizational level.
In cases like these, individuals
may benefit from the wrongdoings
of their company, but they are
players in a larger conspiracy.
Criminal activity is initiated or
condoned at an executive level,
often after a cost-benefit analysis.
For example, if savings from illegal
activities outweigh the cost of the
possible fines, then breaking thelaw can be perceived by some
unscrupulous executives as a
perfectly rational business decision.
In a situation when virtually
everybody in the company is
complicit in either illegal activity or
a conspiracy of silence, it becomes
extremely difficult to establish
individual culpability beyond
reasonable doubt – especially when
the company can afford to employ
accomplished defence lawyers.
In cases such as Jérôme
Kerviel’s, the official narrative of
a lone wolf operating within an
otherwise law-abiding company
has been met with outright
scepticism from many quarters.
Critics argue that others higher
up in the organization simply had
to know, believing that not being
aware of such systemic crimes
would be functionally impossible. ■WHITE COLLAR CRIME
2001
2007–08
2008
2008
2013
2015
US authorities fine German
engineering giant Siemens for
using bribery to win
overseas contracts.Wall Street investment
advisor Bernie Madoff's
Ponzi scheme collapses
and bankrupts thousands
of people.Russian malware
developer Aleksandr
Panin is arrested
for hacking millions of
online bank accounts.In France, rogue trader
Jérôme Kerviel makes a
number of unauthorized
trades at Société Genérale
and nearly brings down
the bank.US energy company
Enron is exposed
for a massive
and systematic
accounting fraud.The US Environmental
Protection Agency
uncovers emissions
fraud by the German
car maker Volkswagen.098-099_Timeline_3.indd 99 13/01/2017 15:10