White collar offenders
Which terms are usually used to describe a
white collar offender?
• elite crime
•crimes of the powerful
These terms are used in contrast with the
following terms:
•street crime
•crime of the powerless
Both in rhetoric and research, the white collar
offender has been pictured as the polar
opposite of the common criminal …. As much
as we have come to see street crime primarily
as the work of disadvantaged young men from
broken families and decaying neighbourhoods,
white collar crime has been linked to the
advantaged older men from stable homes living
in well-kept communities.
(Weisburd et al., 1991)
The stereotype
“one law for rich and one law for poor”
It is often assumed that high status
offenders are treated differently by
law enforcers
In the past, “entrepreneurs” did not
enjoy a universally respectable
status, having been seen as
“mavericks”.
Business and commercial groups
were not previously regarded as part
of the upper class establishment
Which cases will the media be
more interested in?
Cases in which the “extravagant lifestyle” of
offenders can be contrasted with the suffering
they have imposed on their innocent victims.
Major themes in the media are
•the “fall from grace” of wealthy ad powerful
pillars of the community
•Cases involving major institutions whose
names are immediately recognizable
The Guinness share-trading fraud was a
famous British Business scandal of the 1980s.
It involved an attempt to manipulate the stock
market on a massive scale to inflate the price
of Guinness shares and thereby assist a £2.7
billion take-over bid for the Scottish drinks
company Distillers. Ernest Saunders, Geald
Ronson, Jack Lyons and Anthony Parnes, the
so-called "Guinness four", were charged, paid
heavy fines and, with the exception of Lyons,
who was suffering from ill-health, served
prison sentences later reduced on appeal
Martha Stewart
•
Martha Stewart is an author, editor and
commercial spokesperson. Over more than two
decades as a prominent editor of homemaking
magazines, host of homemaking television
shows,
and
prominent
commercial
spokesperson Stewart rose to international
fame. In 2002, she was accused of insider
trading and other crimes relating to statements
that she made to investigators, and in 2004 she
was convicted on four counts of lying to
investigators and obstruction of Justice.
Her syndicated television show was cancelled and
she was forced to step down from her role as CEO
and chairwoman of MSLO for a non-executive role,
and resigned her position as a board member for
Revlon and the New York Stock Exchange. Stewart
surprised many when she pleaded guilty to lying to
federal investigators in 2004, and accepted a 5-month
prison sentence which she served at Alderson Federal
Prison Camp. She was released on March 4, 2005,
after which she was placed under supervised release
and required to wear an ankle bracelet for an
additional 5 months.
Major corporate scandals
•
•
•
•
•
•
Enron
Tyco International
Worldcom
Parmalat
Cirio
Lloyd’s of London and the Insurance
Industry in general
Some cases do capture the attention
of the public because of the high
status of the victims, as in the case of
Nick Leeson, in which the list of the
victims included senior executives of
the bank and high status investors as
the Royal Family
Nicholas Leeson was a derivatives trader whose
unsupervised speculative trading caused the collapse of
Barings Bank, the United Kingdom’s oldest investment
bank.
In the early 1990s, when employed by Barings, Leeson
was appointed manager of a new operation in futures
markets on the Singapore International Monetary
Exchange (SIMEX). From 1992, Leeson made
unauthorized speculative trades that at first made large
profits for his employer, accounting for 10% of
Barings' annual income. His luck later went sour, and
he used a secret account to hide his losses.
This account was initially opened to hide a
£20,000 trade of one his subordinates that had
been recorded incorrectly. Leeson used this
account to cover future bad trades.
Management at Barings Bank also allowed
Leeson to remain Chief Trader while being
responsible for settling his trades, a job that is
usually split. This made it much simpler for
him to hide his losses from the Bank. By the
end of 1992 the account's losses exceeded £2
million, which ballooned to £208 million by the
end of 1994.
Diversity of offenders
• “cowboy builders”( their victims are abandoned
with unfinished work which has been paid for, lost
deposits and shoddy work)
• “rogue landlords”(the
Chartered Institute of
Environmental Health has, for example, claimed that
students face living in “death trap” houses with
poorly maintained gas appliances, inadequate fire
escapes, inflammable furniture, faulty electrics and
pest infestations
• car cowboys”
Recent researches have confirmed that a wide
variety of offenders is concerned with White
Collar Crimes.
Frauds attributed to employees are associated
with:
•Managers
•Accounting personnel
•Directors or partners
•lower-level employee (sales or shopfloor
personnel, computer operatives and
distributors and drivers
A tentative classification of white collar offenders is suggested
in Hazell Croall’s book.
1.Individual offenders can be grouped according to broad
approximations of occupational status, from senior
management and executives though middle level, middle class
offenders, to those of a lower, clerical status
2.Organizational offenders can be grouped according to size,
from large corporate offenders or state organizations to the
“petty bourgeoisie” incorporating small but primarily legitimate
business
3.These groups can both be distinguished from the “maverick”
and not wholly legitimate occupations and businesses, ranging
from more sophisticated entrepreneurs engaging in serious
illegal activities or semi-legitimate businesses to the smaller
rogues and cowboys involved in more trivial offending