White-collar crime
Encyclopedia
Within the field of criminology
Criminology
Criminology is the scientific study of the nature, extent, causes, and control of criminal behavior in both the individual and in society...

, white-collar crime has been defined by Edwin Sutherland
Edwin Sutherland
Edwin H. Sutherland was an American sociologist. He is considered as one of the most influential criminologists of the twentieth century...

 as "a crime committed by a person of respectability and high social status in the course of his occupation" (1939). Sutherland was a proponent of Symbolic Interactionism
Symbolic interactionism
Symbolic Interaction, also known as interactionism, is a sociological theory that places emphasis on micro-scale social interaction to provide subjective meaning in human behavior, the social process and pragmatism.-History:...

, and believed that criminal behavior was learned from interpersonal interaction with others. White-collar crime, therefore, overlaps with corporate crime
Corporate crime
In criminology, corporate crime refers to crimes committed either by a corporation , or by individuals acting on behalf of a corporation or other business entity...

 because the opportunity for fraud
Fraud
In criminal law, a fraud is an intentional deception made for personal gain or to damage another individual; the related adjective is fraudulent. The specific legal definition varies by legal jurisdiction. Fraud is a crime, and also a civil law violation...

, bribery
Bribery
Bribery, a form of corruption, is an act implying money or gift giving that alters the behavior of the recipient. Bribery constitutes a crime and is defined by Black's Law Dictionary as the offering, giving, receiving, or soliciting of any item of value to influence the actions of an official or...

, insider trading
Insider trading
Insider trading is the trading of a corporation's stock or other securities by individuals with potential access to non-public information about the company...

, embezzlement
Embezzlement
Embezzlement is the act of dishonestly appropriating or secreting assets by one or more individuals to whom such assets have been entrusted....

, computer crime
Computer crime
Computer crime, or cybercrime, refers to any crime that involves a computer and a network. The computer may have been used in the commission of a crime, or it may be the target. Netcrime refers to criminal exploitation of the Internet. Such crimes may threaten a nation’s security and financial health...

, copyright infringement
Copyright infringement
Copyright infringement is the unauthorized or prohibited use of works under copyright, infringing the copyright holder's exclusive rights, such as the right to reproduce or perform the copyrighted work, or to make derivative works.- "Piracy" :...

, money laundering
Money laundering
Money laundering is the process of disguising illegal sources of money so that it looks like it came from legal sources. The methods by which money may be laundered are varied and can range in sophistication. Many regulatory and governmental authorities quote estimates each year for the amount...

, identity theft
Identity theft
Identity theft is a form of stealing another person's identity in which someone pretends to be someone else by assuming that person's identity, typically in order to access resources or obtain credit and other benefits in that person's name...

, and forgery
Forgery
Forgery is the process of making, adapting, or imitating objects, statistics, or documents with the intent to deceive. Copies, studio replicas, and reproductions are not considered forgeries, though they may later become forgeries through knowing and willful misrepresentations. Forging money or...

 are more available to white-collar
White-collar worker
The term white-collar worker refers to a person who performs professional, managerial, or administrative work, in contrast with a blue-collar worker, whose job requires manual labor...

 employees.

Historical background

The term white-collar crime only dates back to 1939. Professor Edwin Hardin Sutherland was the first to coin the term, and hypothesize white-collar criminals attributed different characteristics and motives than typical street criminals. Mr. Sutherland originally presented his theory in an address to the American Sociological Society in attempt to study two fields, crime and high society, which had no previous empirical correlation. He defined his idea as "crime committed by a person of respectability and high social status in the course of his occupation" (Sutherland, 1949). Many denote the invention of Sutherland's idiom to the explosion of U.S business in the years following the Great Depression. Sutherland noted that in his time, "less than two percent of the persons committed to prisons in a year belong to the upper-class." His goal was to prove a relation between money, social status, and likelihood of going to jail for a white-collar crime, compared to more visible, typical crimes. Although the percentage is a bit higher today, numbers still show a large majority of those in jail are poor, "blue-collar" criminals, despite efforts to crack down on white-collar, and corporate crime
Corporate crime
In criminology, corporate crime refers to crimes committed either by a corporation , or by individuals acting on behalf of a corporation or other business entity...

. The introduction of white-collar crime was a relatively new issue to criminology at that time. He was urging other criminologists to stop focusing on the socially and economically disadvantaged. The types of individuals who committed these crimes lived successfully and were respected by society in general-also criminologists; because these criminals were held to such a high regard, these individuals were given a blind eye to the crimes they committed.

Other fiscal laws were passed in the years prior to Sutherland's studies including antitrust laws in the 1920s, and social welfare laws in the 1930s. After the Depression, people went to great lengths to rebuild their financial security, and it is theorized this led many hard workers, who felt they were underpaid, to take advantage of their positions.

Much of Sutherland's work was to separate and define the differences in blue collar
Blue collar
Blue collar can refer to:*Blue-collar worker, a traditional designation of the working class*Blue-collar crime, the types of crimes typically associated with the working class*A census designation...

 street crimes, such as arson
Arson
Arson is the crime of intentionally or maliciously setting fire to structures or wildland areas. It may be distinguished from other causes such as spontaneous combustion and natural wildfires...

, burglary
Burglary
Burglary is a crime, the essence of which is illicit entry into a building for the purposes of committing an offense. Usually that offense will be theft, but most jurisdictions specify others which fall within the ambit of burglary...

, theft
Theft
In common usage, theft is the illegal taking of another person's property without that person's permission or consent. The word is also used as an informal shorthand term for some crimes against property, such as burglary, embezzlement, larceny, looting, robbery, shoplifting and fraud...

, assault
Assault
In law, assault is a crime causing a victim to fear violence. The term is often confused with battery, which involves physical contact. The specific meaning of assault varies between countries, but can refer to an act that causes another to apprehend immediate and personal violence, or in the more...

, rape
Rape
Rape is a type of sexual assault usually involving sexual intercourse, which is initiated by one or more persons against another person without that person's consent. The act may be carried out by physical force, coercion, abuse of authority or with a person who is incapable of valid consent. The...

 and vandalism
Vandalism
Vandalism is the behaviour attributed originally to the Vandals, by the Romans, in respect of culture: ruthless destruction or spoiling of anything beautiful or venerable...

, which are often blamed on psychological, associational, and structural factors. Instead, white-collar criminals are opportunists, who over time learn they can take advantage of their circumstances to accumulate financial gain. They are educated, intelligent, affluent, confident individuals, who were qualified enough to get a job which allows them the unmonitored access to often large sums of money. Many also use their intelligence to con their victims into believing and trusting in their credentials. Many do not start out as criminals, and in many cases never see themselves as such.

Definitional issues

Modern criminology generally rejects a limitation of the term by reference, rather classifies the type of crime and the topic:
  • By the type of offense, e.g. property crime, economic crime, and other corporate crimes like environmental
    Environmental law
    Environmental law is a complex and interlocking body of treaties, conventions, statutes, regulations, and common law that operates to regulate the interaction of humanity and the natural environment, toward the purpose of reducing the impacts of human activity...

     and health and safety law violations. Some crime is only possible because of the identity of the offender, e.g. transnational money laundering
    Money laundering
    Money laundering is the process of disguising illegal sources of money so that it looks like it came from legal sources. The methods by which money may be laundered are varied and can range in sophistication. Many regulatory and governmental authorities quote estimates each year for the amount...

     requires the participation of senior officers employed in banks. But the Federal Bureau of Investigation
    Federal Bureau of Investigation
    The Federal Bureau of Investigation is an agency of the United States Department of Justice that serves as both a federal criminal investigative body and an internal intelligence agency . The FBI has investigative jurisdiction over violations of more than 200 categories of federal crime...

     has adopted the narrow approach, defining white-collar crime as "those illegal acts which are characterized by deceit, concealment, or violation of trust and which are not dependent upon the application or threat of physical force or violence" (1989, 3). This approach is relatively pervasive in the United States
    United States
    The United States of America is a federal constitutional republic comprising fifty states and a federal district...

    , the record-keeping does not adequately collect data on the socioeconomic status of offenders which, in turn, makes research and policy evaluation problematic. While the true extent and cost of white-collar crime are unknown, it is estimated to cost the United States somewhere between $300–$660 billion annually, according to the FBI (Lane and Wall 2006, cited; in Friedrichs, 2007, p46).
  • By the type of offender, e.g. by social class
    Social class
    Social classes are economic or cultural arrangements of groups in society. Class is an essential object of analysis for sociologists, political scientists, economists, anthropologists and social historians. In the social sciences, social class is often discussed in terms of 'social stratification'...

     or high socioeconomic status, the occupation of positions of trust or profession
    Profession
    A profession is a vocation founded upon specialized educational training, the purpose of which is to supply disinterested counsel and service to others, for a direct and definite compensation, wholly apart from expectation of other business gain....

    , or academic qualification, researching the motivations for criminal behavior, e.g. greed or fear of loss of face if economic difficulties become obvious. Shover and Wright (2000) point to the essential neutrality of a crime as enacted in a statute
    Statute
    A statute is a formal written enactment of a legislative authority that governs a state, city, or county. Typically, statutes command or prohibit something, or declare policy. The word is often used to distinguish law made by legislative bodies from case law, decided by courts, and regulations...

    . It almost inevitably describes conduct in the abstract, not by reference to the character of the persons performing it. Thus, the only way that one crime differs from another is in the backgrounds and characteristics of its perpetrators. Most if not all white-collar offenders are distinguished by lives of privilege, much of it with origins in class inequality
    Social inequality
    Social inequality refers to a situation in which individual groups in a society do not have equal social status. Areas of potential social inequality include voting rights, freedom of speech and assembly, the extent of property rights and access to education, health care, quality housing and other...

    .
  • By organizational culture rather than the offender or offense which overlaps with organized crime
    Organized crime
    Organized crime or criminal organizations are transnational, national, or local groupings of highly centralized enterprises run by criminals for the purpose of engaging in illegal activity, most commonly for monetary profit. Some criminal organizations, such as terrorist organizations, are...

    . Appelbaum and Chambliss (1997, 117) offer a twofold definition:
    • Occupational crime which occurs when crimes are committed to promote personal interests, say, by altering records and overcharging, or by the cheating of clients by professionals.
    • Organizational or corporate crime which occurs when corporate executives commit criminal acts to benefit their company by overcharging or price fixing
      Price fixing
      Price fixing is an agreement between participants on the same side in a market to buy or sell a product, service, or commodity only at a fixed price, or maintain the market conditions such that the price is maintained at a given level by controlling supply and demand...

      , false advertising, etc.

Blue-collar crime

The types of crime committed are a function of what is available to the potential offender. Thus, those employed in relatively unskilled environments and living in inner-city areas have fewer "situations" to exploit (see Clarke: 1997) than those who work in "situations" where large financial transactions occur and live in areas where there is relative prosperity. Blue-collar crime tends to be more obvious and thus attracts more active police
Police
The police is a personification of the state designated to put in practice the enforced law, protect property and reduce civil disorder in civilian matters. Their powers include the legitimized use of force...

 attention (e.g. for crimes such as vandalism
Vandalism
Vandalism is the behaviour attributed originally to the Vandals, by the Romans, in respect of culture: ruthless destruction or spoiling of anything beautiful or venerable...

 or shoplifting
Shoplifting
Shoplifting is theft of goods from a retail establishment. It is one of the most common property crimes dealt with by police and courts....

, where physical property is involved). In contrast, white-collar employees can incorporate legitimate and criminal behavior, thus making themselves less obvious when committing the crime. Therefore, blue-collar crime will more often use physical force, whereas in the corporate world, the identification of a victim is less obvious and the issue of reporting is complicated by a culture
Culture
Culture is a term that has many different inter-related meanings. For example, in 1952, Alfred Kroeber and Clyde Kluckhohn compiled a list of 164 definitions of "culture" in Culture: A Critical Review of Concepts and Definitions...

 of commercial confidentiality
Confidentiality
Confidentiality is an ethical principle associated with several professions . In ethics, and in law and alternative forms of legal resolution such as mediation, some types of communication between a person and one of these professionals are "privileged" and may not be discussed or divulged to...

 to protect shareholder
Shareholder
A shareholder or stockholder is an individual or institution that legally owns one or more shares of stock in a public or private corporation. Shareholders own the stock, but not the corporation itself ....

 value. It is estimated that a great deal of white-collar crime is undetected or, if detected, it is not reported.

Corporate crime

Corporate crime
Corporate crime
In criminology, corporate crime refers to crimes committed either by a corporation , or by individuals acting on behalf of a corporation or other business entity...

 deals with the company as a whole. The crime benefitting the investors or the individuals who are in high positions in the company or corporation. The relationship white-collar crime has with corporate crime is that they are similar because they both are involved within the business world. Their difference is that white-collar crime benefits the individual involved, and corporate crime benefits the company or the corporation.

State-corporate crime

The negotiation of agreements between a state and a corporation will be at a relatively senior level on both sides, this is almost exclusively a white-collar "situation" which offers the opportunity for crime. White-collar crime has become a priority of law enforcement, however evidence shows that it continues to be a low priority.

When senior levels of a corporation engage in criminal activity using the company this is sometimes called control fraud
Control fraud
Control fraud occurs when a trusted person in a high position of responsibility in a company, corporation or state uses their powers to subvert the organization and to engage in extensive fraud for personal gain....

.

See also

  • Accounting scandals
    Accounting scandals
    Accounting scandals, or corporate accounting scandals, are political and business scandals which arise with the disclosure of misdeeds by trusted executives of large public corporations...

  • Con man
    Confidence trick
    A confidence trick is an attempt to defraud a person or group by gaining their confidence. A confidence artist is an individual working alone or in concert with others who exploits characteristics of the human psyche such as dishonesty and honesty, vanity, compassion, credulity, irresponsibility,...

  • FBI
  • Franchise fraud
    Franchise fraud
    Franchise fraud is defined by the United States Federal Bureau of Investigation as a pyramid scheme.- Franchise fraud in U.S. federal law :The FBI website states:...

  • Fraud
    Fraud
    In criminal law, a fraud is an intentional deception made for personal gain or to damage another individual; the related adjective is fraudulent. The specific legal definition varies by legal jurisdiction. Fraud is a crime, and also a civil law violation...

  • Industrial espionage
    Industrial espionage
    Industrial espionage, economic espionage or corporate espionage is a form of espionage conducted for commercial purposes instead of purely national security purposes...

  • INTERPOL
    Interpol
    Interpol, whose full name is the International Criminal Police Organization – INTERPOL, is an organization facilitating international police cooperation...

  • IRS Criminal Investigation Division
    IRS Criminal Investigation Division
    Internal Revenue Service, Criminal Investigation investigates potential criminal violations of the U.S. Internal Revenue Code and related financial crimes in a manner intended to foster confidence in the tax system and compliance with the law...

     (IRS-CID)
  • Money laundering
    Money laundering
    Money laundering is the process of disguising illegal sources of money so that it looks like it came from legal sources. The methods by which money may be laundered are varied and can range in sophistication. Many regulatory and governmental authorities quote estimates each year for the amount...

  • Office of Criminal Investigations (OCI)
  • Organized crime
    Organized crime
    Organized crime or criminal organizations are transnational, national, or local groupings of highly centralized enterprises run by criminals for the purpose of engaging in illegal activity, most commonly for monetary profit. Some criminal organizations, such as terrorist organizations, are...

  • Sarbanes-Oxley Act
    Sarbanes-Oxley Act
    The Sarbanes–Oxley Act of 2002 , also known as the 'Public Company Accounting Reform and Investor Protection Act' and 'Corporate and Auditing Accountability and Responsibility Act' and commonly called Sarbanes–Oxley, Sarbox or SOX, is a United States federal law enacted on July 30, 2002, which...

  • Securities fraud
    Securities fraud
    Securities fraud, also known as stock fraud and investment fraud, is a practice that induces investors to make purchase or sale decisions on the basis of false information, frequently resulting in losses, in violation of the securities laws....

  • Terrorist financing
    Terrorist Financing
    Terrorist financing came into limelight after the events of terrorism on 9/11. The US passed the USA PATRIOT Act to, among other reasons, attempt thwarting the financing of terrorism and anti-money laundering making sure these were given some sort of adequate focus by US financial institutions...

  • United States Postal Inspection Service
    United States Postal Inspection Service
    The United States Postal Inspection Service is the law enforcement arm of the United States Postal Service. Its jurisdiction is defined as "crimes that may adversely affect or fraudulently use the U.S...

  • United States Secret Service
    United States Secret Service
    The United States Secret Service is a United States federal law enforcement agency that is part of the United States Department of Homeland Security. The sworn members are divided among the Special Agents and the Uniformed Division. Until March 1, 2003, the Service was part of the United States...


Further reading and references

  • Appelbaum, Richard P. & Chambliss, William J. (1997). Sociology: A Brief Introduction. New York: Longman. ISBN 0-673-98279-3
  • Barnett, Cynthia. (Undated). The Measurement of White-Collar Crime Using Uniform Crime Reporting (UCR) Data.
  • Clarke, Ronald (ed). (1997). Situational Crime Prevention: Successful Case Studies (2nd edition). New York: Criminal Justice Press. ISBN 0-911577-38-6
  • Dillon, Eamon Dilloninvestigates.com, The Fraudsters – How Con Artists Steal Your Money Chapter 5, Pillars of Society, published September 2008 by Merlin Publishing, Ireland ISBN 978-1-903582-82-4
  • Friedrichs, David O. (2003) Trusted Criminals: White Collar Crime in Contemporary Society, Wadsworth. ISBN 0-495-00604-1
  • Geis, G., Meier, R. & Salinger, L. (eds.) (1995). White-collar Crime: Classic & Contemporary Views. NY: Free Press.
  • Green, Stuart P. (2006). Lying, Cheating, and Stealing: A Moral Theory of White Collar Crime. Oxford: Oxford University Press
    Oxford University Press
    Oxford University Press is the largest university press in the world. It is a department of the University of Oxford and is governed by a group of 15 academics appointed by the Vice-Chancellor known as the Delegates of the Press. They are headed by the Secretary to the Delegates, who serves as...

    .
  • Lea, John. (2001). Crime as Governance: Reorienting Criminology.
  • Leap, Terry L. (2007) Dishonest Dollars: The Dynamics of White-Collar Crime. Ithaca: Cornell University Press
    Cornell University Press
    The Cornell University Press, established in 1869 but inactive from 1884 to 1930, was the first university publishing enterprise in the United States.A division of Cornell University, it is housed in Sage House, the former residence of Henry William Sage....

    . ISBN 978-0-8014-4520-0
  • Newman, Graeme R. & Clarke, Ronald V. (2003). Superhighway Robbery: Preventing E-commerce Crime. Portland, Or: Willan Publishing. ISBN 1-84392-018-2
  • Reiman, J. (1998). The Rich get Richer and the Poor get Prison. Boston: Allyn & Bacon.
  • Pontell, H. & Tillman, R. (1998). Profit Without Honor: White-collar Crime and the Looting of America. Upper Saddle River, NJ: Prentice Hall.
  • Shapiro, Susan P. (1990). "Collaring the Crime, not the Criminal: Reconsidering the Concept of White-collar Crime", American Sociological Review 55: 346–65.
  • Simon, D. & Eitzen, D. (1993). Elite Deviance. Boston: Allyn & Bacon.
  • Simon, D. & Hagan, F. (1999). White-collar Deviance. Boston: Allyn & Bacon
  • Shover, Neal & Wright, John Paul (eds.) (2000). Crimes of Privilege: Readings in White-Collar Crime. Oxford: Oxford University Press. ISBN 0-19-513621-7
  • Sutherland, Edwin Hardin (1949). White Collar Crime. New York: Dryden Press.
  • Thiollet, J.P
    Jean-Pierre Thiollet
    Jean-Pierre Thiollet is a French writer and journalist. He usually lives in Paris and is the author of numerous books.Since 2007, he has been a member of the World Grand Family of Lebanon ....

    . (2002). Beau linge et argent sale — Fraude fiscale internationale et blanchiment des capitaux, Paris, Anagramme ed. ISBN 2 914571178
  • U.S. Department of Justice, Federal Bureau of Investigation (1989). White Collar Crime: A Report to the Public. Washington, D.C.: Government Printing Office.
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