Financial Crime and
Fraud Investigation:
Theories of Motivation
Learning outcomes
Understand how white collar crime is
defined and the problems arising from that
definition
 Appreciate the dynamic nature of the
changing definitions
 Understand the variety and number of the
motivational theories propounded in this
area and their genesis

2
Defining white collar crime
Different to street crime as it is obscured
and innocuous.
 Street crimes are committed by
confronting victims or entering their homes
 White collar crimes are committed by
guile, deceit, or misrepresentation

3
Defining white collar crime
Began to be differentiated in the early
1900’s
 For example Ross (1907) “criminaloids”

 The
villain most in need of curbing is the
respectable exemplary trusted personage
who ... is able from his office chair to pick a
thousand pockets, poison a thousand sick,
pollute a thousand minds, or imperil a
thousand lives
4
Defining white collar crime
Not to do with poverty
 Not to do with social pathology
 Not to do with physical or psychological
pathology
‘crime committed by a person of high status
and respectability in the course of his
occupation’ (Sutherland 1949)

5
Defining white-collar crime
White-collar crime may be defined
approximately as a crime committed by a
person of respectability and high status in
the course of his occupation. . . the
financial cost of white-collar crime is
probably several times as great as the
financial cost of all the crimes which are
customarily regarded as the crime
problem. (Sutherland)
6
Problems with defining whitecollar crime
High-status offender?
 Definitional ambiguity
 Little distinction between crimes
committed by businesses and crimes
carried out against an organisation
‘crime committed in the course of legitimate
employment involving the abuse of an
occupational role’ (Croall 1992)

7
‘if it can be shown that white collar crimes
are frequent, a general theory that crime is
to do with poverty and its related
pathologies is shown to be invalid’
(Sutherland 1949)
8
Definitional
Because of this definitional difficulty
Clinard and Quinney (1967) suggested
replacing the term white collar crime with
two constitutive terms “corporate” and
“occupational” crime
 “Crimes of the middle classes” Weisburd
et al (1991)

9
Occupational crime
For personal gain:
 Employee theft/computer time, telephone
embezzlement etc.
 Fraud with customers (charging for work
not done)
 Fiddling expenses, embezzlement, tax
evasion.
10
Corporate crime
Offences against employees
 Offences against investors
 Offences against consumers
 Offences against the public
 Offences against the state

11
Understanding corporate crime

Organisational goals:
 profit,

growth, market control
Individual characteristics:
 anomie
of success = unlimited ambition,
shrewdness and moral flexibility

(anomie is the lack of usual social or ethical
standards)
12
Understanding corporate crime

The motive:
a

rational solution to the corporate problem
The means:
– structured immoralities of
irresponsibility + a lack of law enforcement
 ideology

The opportunity:
 low
surveillance
13
Why are corporate crimes
different ?
Offences tend to be invisible
 The acts/offences tend to be very complex
 There often is no one offender
 May be no victim or many victims
 Ambiguous criminal status e.g proof of
intent

14
Criminology of White Collar Crime

No general theory of crime exists
 Such
a theory would be able to explain not
only different crimes but provide similar
reasons why males, females, minorities and
non-minorities commit crime.

Number of master concepts around
disciplinary schools: Biology, psychology,
sociology
15
Criminology of White Collar Crime
Biology discredited e.g. physical
manifestations such as facial appearance
 Psychological theories for general crime;

 Childhood
trauma
 Personality traits most studied: risk taking,
recklessness. Characterised by Gottfredson
and Hirschi (1990) – Low Self Control theory:
argued as first six years of life which matter
 Punch (2000) argues egocentricity is best
explanation, within WCC this is over the top
bordering on paranoid meglomania
16
Criminology of White Collar Crime

Sociological approaches centre around
idea of relative deprivation
 Sense
of envy or jealousy about what other
people have

Different to absolute deprivation instead of
deep anger, produces brooding “get even”
type of resentment
 Another
area is the idea of deviant
organisational culture and networks
17
Criminology of White Collar Crime

Traditional criminological theories applied
to WCC
 Routine
activities theory: absence of
guardians and pool of victims
18
Shover and Hochstetler (2006)

Concept of rational choice
 Believed
to explain significant variation in all
crimes across time, space, populations and
individuals
 Assumes that “when punishment is not only
uncertain but altogether improbable, crime
rises precipitously”
19
Criminology of White Collar Crime

Traditional criminological theories applied
to WCC
 Social
control theory: assumes pre-motivated
offenders but based upon weakness in social
bonds.
 Learning theory
20
Edwin Sutherland
Theory of differential association:
 Criminal behaviour is learned not inherited
 Learned in interaction with other persons
 Carried out within intimate personal groups (ie
not from impersonal activities such as films or
TV)
 Not just techniques that are learned but
motivations and rationalisations
21
Edwin Sutherland
Direction of motives and drives is learned
from definition of legal codes as
favourable or unfavourable
 Person becomes delinquent when has an
excess of definitions favourable to law
violation contrasted with definitions
unfavourable to violation

22
Criminology of White Collar Crime

Traditional criminological theories applied
to WCC
 Strain
theory: holds that even good people
commit crime when they become confused
about the goals and means of material
success
 Labelling theory: sensitising
concepts/symbolic meanings/identity
processes
23
Interactionist theory

Focus on the way in which individuals (or “social actors”)
act rather than react to social stimulation

The way “social actors” interpret behaviour is significant
as a means of understanding the way the world is
socially constructed

This construction focuses upon meanings people give to
behaviour

Example of traffic lights social construct


Go through red wrong/illegal unless…
If this is so then concept of crime is socially constructed
24
Interactionist theory


The ability to develop shared meanings is the key to
understanding human interaction. Our ability to think
means what we effectively do, according to
Interactionists, is to create a sense of society and culture
in our minds. We behave "as if" these things physically
exist.
Thus, the world humans inhabit is a social construction.
This involves the idea that society is a product of our
ability to think and express our thoughts symbolically.
The things that we recognise as being "part of our
society" or "part of our culture" are simply products of our
mind.
25
Interactionist theory

Society is an elaborate fiction we create to help us make
sense of our relationships and impose some sort of order
on them.

We create this fictional universe to make social life
possible, since without a sense of shared meanings
about what we see and do, interaction would, at best, be
very difficult and, at worst, impossible.

Cultures, therefore, represent the general store of
shared meanings that people create to give them a
feeling of having things in common and as the basis for
constructive social interaction.
26
Interactionist theory


For example, think of any dealings you have had
with people who do not behave in ways that
conform to your cultural expectations.
People who are drunk, for example, frequently
fail to observe expected cultural norms and this
makes it very difficult for us to interact with them
on anything but a very basic level of
understanding.
27
Interactionist theory



In simple terms, therefore, we have to consider
the process whereby individuals "agree to
agree" about what they are doing (the purpose
of interaction) and why they are doing it (the
meaning of interaction).
Interactionists generally start to explain this
process by referring to the concept of a definition
of the situation.
How we define a situation affects how we
behave when we are in that situation.
28
Interactionist theory

Thus, when someone we meet reveals
one of their social labels to us ("I'm an
accountant", for example) we mentally
"open the box" that contains our store of
knowledge about “accountants".
29
Interactionist Theory of Motivation
Interactionist theory seems well suited to
white collar crime
 Interactionists see motivation as a
symbolic construct ie. the meaning that
individuals attribute to a particular situation

30
Interactionist Theory of Motivation
This meaning of their social reality in
general structures their experience.
 It makes certain courses of action seem
appropriate while others are excluded.
 Cressey (1953) found that embezzlers
“adjust” the symbolic construction of their
behaviour to fit societal expectations

31
Rationalisations

1.
2.
3.
4.
5.
6.
Rationalisations are not after the fact but an integral
part of an “actor’s” motivation (most common are)
Just borrowing the money
Denial of harm ie. No-one gets hurt
Unjust laws ie. Government interference
Act necessary to achieve economic goal or to survive
ie. therefore must comply especially in work
environment
Transfer of responsibility ie everyone is doing it
Deserve the money
32
Coleman



Interactionists argue that symbolic constructs
are learned from association with others ie back
to Sutherland’s differential association theory
Coleman argues that the interactionist theory
does not explain the motivations of white collar
crime
Looks to modern industrial capitalism as a factor
33
Culture of Competition


The idea that wealth and success are central
goals of human endeavour is part of a larger
complex of beliefs that may be termed the
“culture of competition”
The pursuit of economic self interest and the
effort to surpass their fellows in the accumulation
of wealth and status are of critical importance to
these … actors (Coleman, ibid)
34
Culture of Competition
Creates a pervasive sense of insecurity as
an undercurrent in industrial capitalism
 This fear of failure permeates every
stratum of contemporary society.
 It is a corollary of the demand for success.
 These factors have grown in the 21st
century

35
Culture of Competition
Some crimes result from the efforts of
individuals trying to live up to expectations
of associates and friends.
 When viewed at group level the culture of
competition still appears.

36
Culture of Competition
Anthropological studies of hunting and
gathering societies find little of this
acquisitive materialism we see in society
 First such individualism noted in early
days of the modern capitalist society
 Previously little surplus wealth existed

37
Normative Boundaries
Ethical standards for economic behaviour
are easily combined at a theoretical level.
 However public see the contradiction
between the two i.e. “nice guys finish last”
 Major conflict in society


Link to relative deprivation idea and
anomie
38
Subcultures




Given this societal conflict there are in addition
occupational subcultures present
Each complex organisation has an “ethical tone”
that either reinforces or opposes the normative
standards for economic behaviour
Industry subcultures
Occupational subcultures which cut across
industries and organisations
39
Subcultures

Because of this isolation, work related
subcultures are able to maintain certain
criminal activities as acceptable or
recognised behaviour.
price fixing example – they had forgotten
it was illegal
 GE

Subcultures can also work to positive
effect
40
Punishment




The severity of punishment for white-collar crime
varies inversely with the power and influence of
the typical offender
Studies show that street crimes are punished
more severely than occupational crimes.
Stay in nicer prisons
Same inverse relationship also applies to
likelihood of prosecution
41
Some key texts







Sutherland, E. (1949) White Collar Crime, Dryden.
Clinard, M. and Quinney, R. (1967) Criminal Behavior
Systems: A Typology, Holt Rhinhart & Winston.
Coleman, J. (1987) Toward and Integrated Theory of
White Collar Crime, The American Journal of Sociology,
93, (2).
Gottfredson, M. and Hirschi, T. (1990) A General Theory
of Crime, Stanford University Press
Croall H. (1992) White Collar Crime,OUP.
Punch, M. (2000). Suite violence: Why managers murder
and corporations kill. Crime Law & Social Control.
33:243-80.
Shover, N and Hochstetler, A. (2006) Choosing WhiteCollar Crime, CUP.
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