White Collar Crime

Express November 4 2015
Crime is more than violent acts
‘White collar’ crime exists in all countries in varying degrees, and is of particular
concern to developing countries since it undermines economic growth,
discourages foreign investments and attacks the very moral fabric of society. It
places a heavy burden on the resources available to both the public and the
private sectors of the economy and contributes to the existing atmosphere of
lawlessness. Trinidad and Tobago is no less susceptible to this type of behaviour.
However, the when we focus on crime, it is most often on the traditional ‘blue
collar crimes’ against individuals, such as murder, assault, larceny and robbery to
name a few, since it is visible and involves the loss of personal property or injury,
or even the death of its victims. Research in this area concentrated on the lower
class of society and various theories have been developed to explain the
behaviour of such perpetrators.
This type of offending has usually been
associated with deprivation, the breakdown of family values and acculturation.
The turn of the twentieth century saw an emergence of deviant behaviour that
could not be explained by traditional criminal theories. The eminent criminologist
E. H. Sutherland introduced the concept of ‘white-collar crime’ in 1939 as ‘a crime
committed by a person of respectability and high social status in the course of his
occupation’. The difficulty with this concept was that what is considered morally
wrong in one segment of society is quite acceptable in another. For instance, in
the past, some people may have considered it unethical to pay a ‘kick-back’ in
order to secure a contract, whilst others viewed it as a way of doing business.
Thankfully, this way of thinking is changing with the introduction of legal codes in
Express November 4 2015
societies that expressly forbid certain types of behaviour. However, legislation is
only as effective as its enforcement.
White collar crime includes four crucial elements; it is clandestine, it violates the
offender’s fiduciary duties to the victim organization, it is committed for the
purpose of direct or indirect financial benefit to the offender and costs the victim
organization asset, revenue or reserves (Association of Certified Fraud Examiners
2004). This makes the crime virtually invisible and detection low. Official statistics
are unreliable and generally inaccurate, painting an untrue picture of the
phenomenon as a whole. Classic white-collar crimes are crimes which involve
personal gain, at the expense of some other party.
The National White Collar Crime Centre’s Research and Training Institute (1996)
defines white collar crimes as ‘illegal or unethical acts that violates fiduciary
responsibilities or public trust, committed by an individual or organisation, usually
during the course of legitimate occupational activity by persons of high or
respectable social status for personal or organisational gains’. Most white collar
crimes involve persons with no previous criminal record and who consider
themselves as ‘decent law abiding citizens’.
It has been argued that white collar crimes are encouraged in societies:
 Where there is a culture of competition in relation to personal wealth and
 with certain occupations within organisations, which by their very nature
present special opportunities
 where a particular culture or subculture exists in the organisation and
with financially driven organisations.
Express November 4 2015
Geis and Meir (1977) added another twist when they said “White collar crime
provides and an indication of the degree of hypocrisy present in a society. Such
hypocrisy may be seen as leverage by means of which the society may be forced
towards congruence between its verbal commitments and its actual conduct. In
regard to white collar crimes, hypocrisy exists when fraud among the lower
classes are viewed with distaste and severely punished, while upper class
deception is countenanced and defined as nothing more than shrewd business
So what drives a man to commit this type of crime? There is no single theory that
can explain all types of white collar crimes. However, it can be attributed to three
factors, more commonly known as ‘the fraud triangle’ of Motivation, Opportunity
and Rationalization.
Motivation to commit white collar crime boils down to one thing - greed. The
offender is motivated to commit the act for some form of tangible benefit that
can be derived consequently, either to himself, an associate or an organisation he
is associated with. These benefits can be in the form of money, property or even
an i.o.u. which can be cashed in at a later date. Before the offender commits the
offence, he/she weighs the cost compared to the benefit to be derived from the
Opportunities to commit white collar crimes are varied and depend on the
position the individual holds within the organisation. Research into convicted
offenders in the U.S. has shown that white collar criminals are generally older and
better educated than the average blue collar criminal. The position held is usually
one of trust where the individual in the organisation has a certain amount of
Express November 4 2015
power and influence over others or controls information that is vital to the
operation of the organisation. Clearly, some professions/occupations present
more opportunities than others.
Rationalization occurs when the offender attempts to justify his act by
neutralizing in his/her mind the illegality of it. The offender does this through
several means and makes excuses such as ‘no one was harmed’, ‘everyone got a
little something’, ‘the government would have wasted the money anyway’ and
Reporting of white collar criminal activity in Trinidad and Tobago has been
traditionally low, but not un-noticed. It exists at various levels of society both in
the public and private sector. However, the any allegation of wrongdoings made
seldom comes before a criminal court. The main form of white collar crime that is
reported to the police in this country is related to fraud activities committed by
employees against employers. However, there are many other forms of
unreported white collar crime and the cost to the state and businesses can run
into billions of dollars. Four areas are easily identifiable and needs more attention
with respect to white collar crimes. They are revenue collection, customs and
excise, procurement contracts and corporate malfeasance. Crimes that can take
place in these areas are underreporting income, overstating expenses, under
invoicing imports, submission of fraudulent documents, and corruption/breach of
duty of care, amongst others.
Unfortunately however, white collar crimes can flourish due to dynamics such as
the lack of political will, diffusion of responsibilities, lack of proper controls and
guidelines, inadequate oversight, lack of investigative expertise and resources
Express November 4 2015
available to investigative bodies, inadequate legislation and the legal system lack
of treatment of white collar offenders with the same abhorrence as shown to
with blue collar criminals.
To deal with effectively with white collar crime positive signals must be sent
about the abhorrence of this type of activity. This begins at the legislative
stratum, followed by the employees/management of entities and trickles down to
the investigative arms of the law in this regard and finally to the legal system.
Failure to act forcefully and decisively in dealing with this type of criminal
behaviour would result in squandered economic and social opportunities for this
and future generations.
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