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Little is known about white collar crime among ordinary people. Many people are unaware of its damage, because it is a less apparent harm. They can't even detect it themselves as happens, for example, with descriptions of consumer goods, with major frauds, corruption and pollution. They can just observe and endure its effects long after it occurred.
This essay explores what is known about white collar crime and will expose every part of it in order to comprehend its gravity. This essay aims to examine the impact of white collar crime among citizens and to expose the harms caused by it. These issues will be discussed in this order.
According to Croall (2001) most of the early criminologists associated crime only to activities of a lower social class of offenders who frequently populated courts and prisons. In the 19th century this hypothesis was challenged by a US criminologist named Edwin Sutherland who stated that crime should not only be associated with that particular class of people and that: 'persons of the upper socio-economic class engage in much criminal behaviour; that this criminal behaviour differs from the criminal behaviour of the lower socio-economic class principally in the administrative procedures which are used in dealing with the offenders and that variations in administrative procedures are not significant from the point of view of causation of crime' (Sutherland, 1949:9)
Newburn (2007) states that criminology has a small interest in white collar crime, it focused mostly on crimes such as theft, assault, burglary, criminal damage and others being strongly criticized for it. In the public belief criminology deals and researches only the crime of the powerless rather than the crime of the powerful. There are a number of reasons why criminology has treated this subject with small interest. Some of these reasons are that most of the activity is private and most of the time hidden making it very hard to study, the social and political interests in this area is little, the crime statistics do not capture this type of crimes. Another reason is that media coverage is different for this type of crime. There is usually less space devoted to white-collar crime, the coverage is less prominent and it is mostly written in the specialist press rather than in the common one. Even tough the focus of criminology in this area is little the concept of white collar crime dates back in the 19th century. The criminological work that is involved in this type of crime started with Edwin Sutherland's work. He was the criminologists that gave birth to the term and introduce its study to criminology. He tried to direct the preoccupation of criminologists from crimes committed by people of low social status to crimes committed by the ones belonging to a higher social class.
Sutherland was way ahead of his time by his research. His concept of crime committed by high status individuals and the concept of white collar crime came well before labeling theories suggested that the nature of crime should not be found in the act itself but in the social response to the act. Even though Sutherland approach was indisputable it was considerable criticized. (Newburn, 2007)
According to Tappan (1947, cited in Newburn, 2007, pp. 374-375) Sutherland's attempt to label people who had not been convicted by a court of justice as criminals was appalling and stated that what Sutherland sees as deviant behaviour is actually normal business practice. As a response to Tappan, Sutherland stated that some of the normal business practices were in contradiction with the legal rules. His definition of white-collar crime is highly disputed because it oversees very different kinds of victims, offenders and offences. It covers crimes committed by people from a high social status, crimes that are committed against or on behalf of some organizations. It is also a very different type of crime because it generally takes place in private, it almost always involves a form of inside knowledge, it has the tendency of having uncertain legal and criminal status, it involves an abuse of trust, the offenders appear to be legitimately present at the scene and the complaints are made long after the event. As mentioned before there are different kinds of victims, offenders and offences in white collar crime and because of that according to Croall (2001) there are seven main types of white collar crime such as: theft at work, fraud, corruption, employment offences, consumer offences, food offences, environmental crime and an eight type, state-corporate crime, identified according to Newburn (2007).
Theft at work corresponds to activities that range from small scale employee theft to large scale embezzlement. According to Barclay and Tavares (1999) research undertaken by the British retail consortium established that theft by staff accounted for losses of approximately one quarter of losses from all crime. According to Newburn (2007) another research undertaken by Karstedt and Farrell (2007) showed that, from 1000 people that have participated in the study, more than 61 per cent admitted to have committed offences such as paying in cash to avoid taxation, avoiding paying a TV licence, falsely claiming refunds and many similar small crimes.
Employment offences cover business practice and aspects of working life that ranges from employment, health and safety to low pay. Every year a large group of people are injured or even killed at work and evidence shows that the people that are more likely to fall in this category are from the lowest socio-economic groups. Tombs (2004, cited in Newburn, 2007, pp. 380) states that there have been recorded over 1600 deaths that have been linked to asbestosis in 2000 and in 2001 the Health and Safety Executive recorded 633 fatal occupational injuries and about 130.000 other injuries that had the result in a minimum three days off work estimating the cost of workplace injuries at 18 billion pounds a year.
Environmental crime includes a variety of offences ranging from fly-tipping to major industrial disasters such as Bhopal. Bhopal is the city where a carbide plant leaked almost 30 tones of methyl isocyanate, exposing almost half a million people and it has been estimated that almost 20.000 of those people died to date because of it. Another form of environmental crime is represented by waste dumping. A well known case dates according to Newburn (2007) from 1998 in Cambodia where a shipment of waste was deposited 15 miles outside a village wrapped in plastic sheets. These plastic sheets were considered very useful in such a poor country and were taken by local villagers that soon started to feel sick having symptoms that varied from headaches to chest pains. It has been estimated that almost 600 of the 1200 residents fell sick. (Newburn, 2007)
Fraud covers many activities that involve a form or another of misinterpretation in order to achieve financial or material advantages. According to Levi et al. (2007) there are 14 common types of fraud: benefit fraud, charity fraud, cheque fraud, consumer frauds, counterfeit intellectual property and products, data-compromise fraud, embezzlement, gaming frauds, insider dealing/market abuse, insurance fraud, lending fraud, pension-type fraud, procurement fraud and tax fraud. (Levi et al. 2007)
Benefit fraud is a type of fraud based on the social security system and has a variety of cases from working and claiming benefits to failure to notify benefit officials of changes in circumstances.
Charity fraud covers frauds where donations are taken for charities that do not exist or have been embezzled from registered charities.
Cheque fraud is the type of fraud which means issuing cheques knowing that they are not covered. It is a type of fraud that is usually covered up to a set limit.
Consumer frauds include lottery/prize scams, telemarketing frauds, misrepresentation of products and gaming frauds such as fixed races.
Counterfeit intellectual property and products fraud includes the illegal copying of vehicle parts, art and antiques, computer software and games, CDs, DVDs and even medicines.
Data-compromise fraud covers fraud on both companies and individuals by fraudulently gaining and using financial information.
Embezzlement is the type of fraud taken against businesses, government departments and professional firms by staff and it generally involves accounts manipulation or the construction of false invoices.
Insider dealing/market abuse represents in general share trading by using information that is not available to the public. It may or may not directly affect people but it affects the market and can be seen as fraud against the whole public.
Insurance fraud stands for fraud that is made against insurance companies and varies from arson for profit to false claims.
Procurement fraud includes fraud and corruption involved in the purchasing process from price-fixing to the abuse of inside information. (Levi et al. 2007)
Tax fraud covers the failure to pay direct, indirect and excise taxes. According to Newburn (2007) this is a very common type of fraud and it is estimated that it costs the European Union almost 34 billion pound per year.
These are the types of white collar crime described by Levi et al. (2007) and in order to better understand Sutherland's definition of the concept we should also research the offenders.
McBarnet (1988) states that usually wealthy offenders or large corporations are the ones who make the most of white collar crime as they can more easily avoid breaking the law by employing expert advisers to keep them in accordance with the 'letter' of law. However, if they do break the rules, they may also use expert advisers or hire the best lawyers to negotiate with enforces and contest cases in court, in order to produce more indulgent outcomes. (Croall, 1989)
Jewkes and Letherby (2002) state that very few offenders are prosecuted for white collar crime and, because of this, it is difficult to determine what characterizes a white collar criminal. Offenders of white collar crime are usually believed to be from high status backgrounds but there are indications that show the opposite. According to Jewkes and Letherby (2002) there are authors that found that small businesses were the types of business that mostly resorted to insurance fraud rather than big ones. They also found that small video stores and moonlighting builders are more likely to be convicted by The Inland Revenue because their offences are cheaper to investigate and easier to convict than large businesses. Another reason for this is because small businesses deal directly with the public making it harder for them to conceal their operations that most of the time are less complex than the ones from large businesses and also because the proprietor is much more easily identified as the responsible person.
Regarding to the race, age and gender of the offender there is little information. Although Gelsthorpe and Morris (1988) affirm that the vast majority of offenders are male. That could be related to women's lower involvement in powerful positions with so many opportunities to commit high-profile white collar crime. On the other hand, a large number of women are found in fraud categories. Anyway, there had been a few legendary female white collar crime offenders to compare with the male defendants in the Guinness trials, or the directors of firms who have been charged with white collar crime. In addition, most major scandals involving frauds or corruption in the United Kingdom have involved men. Besides that, popular representation of entrepreneurs and mavericks are also mainly male.
It is believed that, white collar offenders are recognized by their older age. This can be partially explained by employment rates, because younger people are less likely to achieve a powerful and trusted position associated with forms of white collar crime. Some people agree with the statement that theft at work increases with age. (Croall, 2001)
Race or ethnicities have been little explored in studies of white collar crime compared with other types of crime, where it has received greater attention. This could be linked to the employment status of different minority groups where high-status occupations are dominated by majority.
Studies based on white collar crime have confirmed a wide variety of offenders that were divided into two main categories: Individual offenders and Organisational offenders.
Newburn (2007) states that individual offenders can be grouped according to their occupational status as 'elite offenders', 'the middle classes' and 'white-collar workers'. Elite offenders group include people with great influence, owners and partners in businesses and corrupt politicians. The middle classes group belong to middle managers, professionals and civil servants whom are mostly dealing with tax offending and fraud. White-collar workers group is represented by clerical workers and the other people involved in theft, from a lower level of organisations.
Organisational offenders can be grouped according to the size of their businesses into 'corporate offenders', 'petty bourgeois' businesses, and 'rogue and cowboy' businesses. Corporate offenders involve the world's largest corporate bodies in diverse types of delinquencies. Petty bourgeois are small companies operating locally mostly implicated in health and safety offences. Rogue and cowboy group are mainly involved in consumer fraud by misrepresentation on products and services.
After describing what white collar crime means, its forms and offenders we should take a look at the victims of this type of crime. According to Levi (1988) the victims of white collar crime vary from people that is very wealthy to people that are very poor. Newburn (2007) states that, white collar victimization is different from the victimization of conventional crimes. According to Croall (2007) one of the main focuses of white collar criminology is to expose the harm caused by the crimes of the powerful which seem to overcome the harm caused by conventional crime. It tends to use general categories to describe the victims and it has the tendency to research the relation between class, status, power and offending, criminal justice and sentencing rather than victimization. Croall (2007) argues that victimization is made and studied as a multitude of layers. At the first level it affects private individuals, at the second level it affects organizations and at the third and final level it affects the society. There are crimes that do not target individual people but they end up doing it. For example crimes that target and affect the government end up affecting all citizens. Victimization of white collar crime is often covered up by creating incidents that result from systematic violations of the regulations. The victims are also classified as deserving and undeserving. Investors can be accused of making bad investments and are seen as less deserving than people who for example are victimized through pension fraud. One of the principles of the consumer law is to let the buyer beware so most of the victims are blamed by others or even blame themselves for not paying attention and for being taken in by sales cons and counterfeit goods.
According to Croall (2007) one of the most outrageous blaming of the victims was at the Hillsborough disaster when 96 people were killed in the collapse of a football stadium, disaster that ended up to have been provoked by the advanced drunken state of the spectators. (Croall, 2007)
According to Croall (2001), the best way to reduce the extent of white collar crime is through promoting a good relationship with firms that are being policed.
'Criminal law is universalistic and absolute, and those who offend against it are criminals.' (Snider, 1990: 385)
Even if sentences for white collar crime attract less public attention, they do attract criticism where, for example serious fraudsters receive short prison sentences or companies blamed for death or injuries are given a relatively small fine. Their actions are rarely criminalised - if they are, they are rarely punished adequately. It should be taken into consideration the harm that has been done. (Croall, 2001)
White collar crime continues to raise a lot of questions to which answers must be found in order to improve the quality of life.
This essay defined and described the concept of white collar crime. It studied and showed its types, the offenders and categories of offenders, the victims and the impact that it has on them and also how criminology studies this type of offence.