The term “white-collar crime” was coined by Edwin Sutherland in the year 1939, as an approach of challenging the typical theories and stereotypes. During that era, crime was generally regarded to be an undertaking of disadvantaged young men who were raised in decaying neighborhoods and broken households. As an expert in the field of criminology that applies sociology, he utilized the term “white collar crime” to characterize offenses perpetrated by individuals who have a high social ranking and who are highly trusted. Sutherland also incorporated crimes executed by corporations as well as other legal entities in the scope of his definition (Sutherland, 2017). The development of the concept of white collar crime was elicited by the perception that criminology had erroneously centered on economic and social factors of crime including level of wealth and background of the family. It is accurate to the common knowledge that there are professions which are linked to a greater number of lucrative prospects for unethical practices as well as criminal engagements which are typically disregarded by the mass of society in general. There have been criminals and unethical individuals in business as well as other professions, who have a tendency to engage in a greater degree of unscrupulous activities based solely on the drive to attain greater gain for themselves (Sutherland, 2017). These deviants are characterized by extensive disregard for moral and ethical human values. Hence, they engage in their illegal engagement with an elevated sense of impunity without the apprehension of loss of prestige and respect. The difficulty in bringing such crimes to book is as a result of the development of the highly advanced and competent economy that is characteristic of the twenty-first century.
There various types of individuals who engage in white collar crime as they are not limited in terms of demographics or other specific factors linked to the human stature. One of the key group of individuals are those who engage in corporate fraud which essentially entails a large collection of engagement which are geared at defrauding the victims. Fraud encompasses divergent forms of acts but is in general delineated as the deliberate misleading of an individual or deception of a given entity with the aim of causing an individual loss of money, property or some other rights (Smith, 2017). Hence, this infers that fraud must be deliberate and in this regard, an individuals can commit an error when interacting with financial statement without it being regarded as fraud. One of the techniques in corporate fraud is falsification of financial information which entails the manipulation of financial accounts or statements through overstating profit, sales and assets, or understating losses, expenses or liabilities with the aim of retaining investors or seeking personal gain.
The second group of individuals who engage in white collar crime are embezzlers. In essence, embezzlement occurs when an individuals who has been entrusted by an employer or another individuals to manage property or funds and capitalizes in their position for the purpose of misappropriating finances. An ideal example of this would entail an employee finding a means of funneling organizational funds into their personal bank accounts (Smith, 2017). The third group of individuals are those who engage in Ponzi schemes which are essentially a form of investment in which the investors are promised an unprecedentedly high rate of return for minimal to no risk. The fourth group of individuals engaging in white collar crime are those who commit bankruptcy fraud which is the act of intentionally concealing property when filing out bankruptcy documentation with the aim of finding relief from overwhelming debt (Smith, 2017). The fifth group of individuals are those who engage in extortion which occurs when an individual compels another person or institution into giving up services, money or property through methods such as blackmail among others.
Why it goes undetected?
One of the key reasons why white collar crimes go undetected is due to the fact that some of these deeds, such as insider trading are typically hard to prove. With regards to some white collar crime, the burden of proof typically lies in the hands of the accusers. For instance, in the instance of the most recent national economic events, the accusers in insider trading the accuser are the S.E.C. (Securities and Exchange Commission) and the US department of justice (Brody & Perri, 2016). Specifically, they have to provide proof that those implicated attained tangible gain from offering or acquiring the tip. Historically, this has been hard to verity and a majority of cases have been dismissed as a result of lack of adequate proof. This lack of proof normally leads to the dismissal of majority of the cases which are termed as having circumstantial evidence.
The second key reason why it is often difficult to detect white collar crimes is that such activities are normally committed following extensive deliberation as well as planning conducted by extensively-trained minds that have a higher social status and hence they have an understanding of the systems put in place for detection. Subsequently, they undertake to evade such systems and get away with their crimes (Brody & Perri, 2016). In addition to this, such individuals endeavor to collude with the various officials concerned to evade the detection mechanism and in this way make it more complex to prosecute. Historically, embezzlement have involved some form of collusion with various government stakeholders in a manner that the public are convinced and they subsequently make the decisions of their own accord hence absconding the perpetrators of any wrongdoing.
The third reason why it is difficult to detect such crimes is due to the fact that they are conducted on computerized platforms which utilize highly complex systems to conceal the acts and hence making them more difficult to detect. In essence, technology is linked to numerous components which are meant to simplify human processes including crime. Despite the fact that technological components have been developed with the main of expediting legal activities, some individuals have found unscrupulous approaches of utilizing it that are meant for personal gain, including white collar crimes (Brody & Perri, 2016). In regard to this case, the transactions are channeled via multiple routes hence aiding in concealing the activities since it becomes problematic to ascertain the actual cause or perpetrator of the incident. Technology based white collar crime entails channeling funds and resources via multiple routes such that it is difficult to establish the real source of the crime since the links point to various instigators (Brody & Perri, 2016). In line with this argument, some of the white collar crimes instigated via online platforms are too complicated to convict that the possible benefits are not worth the time. Most of the companies that have fallen victim normally consider the losses to be negligible in comparison to the costs they would incur in pursuing in cases (Brody & Perri, 2016). The cases presented in court are subject to the “comprehensive and undoubted discovery” of pertinent evidence. The meaning of this is that is can take an extensive time frame spanning years for each of the sides to perform investigation and present the relevant evidence for or in opposition to the defendant.
Preventing white collar crime
Preventive measures against white collar crime can adopt various formats contingent on the entity involved as well as the approach utilized. From an entity point of view, measures can be from an organizational or government point of view as they can implement various methodologies of ensuring that the vice is stopped. Second, measures can also be preventive/proactive or reactionary.
From an organizational point of view, one of the approaches that can be applied include the implementation of suitable verification systems. The implementation of verification or balance systems and checks aids in preventing white collar crime within an enterprise. No individual person in an organization should possess too much influence or access that could potentially be utilized in committing crimes (Gottschalk & Gunnesdal, 2018). In line with this, no individual person should be allowed to be a representative of the company since they could potentially abuse this privilege to defraud people or stakeholders of finances or information. A company can also undertake to monitor staff members to keep the business secure. In essence, having an awareness that they are being monitored can function as an effective deterrence to such criminal engagements. One of the possible considerations could be a system that undertakes record taking in case one would require them as future evidence to prosecute white collar crimes.
From a government perspective, one of the approaches that can be utilized is by introduction of more stringent penalties for individuals found culpable of white collar crimes (Gottschalk & Gunnesdal, 2018). In essence, retribution of punitive measures embody one of the key approaches through which various crimes can be prevented and white collar crime is no exception. Currently, the sentences imposed for individuals who have engaged in such crimes are rather lose and hence most perpetrators are not dissuaded from engaging in them. Through the enactment of more punitive measures, the perpetrators will be discouraged from engaging with them at a larger scale since parties in the various industries (Gottschalk & Gunnesdal, 2018). In line with this, the government can also develop institutions or bodies that can be specifically concerning with investigating and prosecuting the various cases in order to depict their resolve to end such acts.
A more proactive method that can be utilized is creation of awareness in the society concerning the techniques and severity of white collar crimes. In essence, most members of the society fall victim to such incidences due to the fact that they are unaware of the schemes and also have unrestrained belief in the individuals heading the perpetrating organizations (Gottschalk & Gunnesdal, 2018). In order to prevent the occurrence of white collar crime based in ignorance, there is need to create extensive awareness that will guarantee that the target victims evade such schemes. Specifically, this is accurate for white collar crimes such as embezzlement and Ponzi schemes which are highly reliant on the ignorance of the victims in order to be effective.
Brody, R. G., & Perri, F. S. (2016). Fraud detection suicide: the dark side of white-collar crime. Journal of Financial Crime, 23(4), 786-797.
Gottschalk, P., & Gunnesdal, L. (2018). White-collar crime in the shadow economy: Lack of detection, investigation and conviction compared to social security fraud. Springer.
Smith, K. (2017). White‐Collar Crime. The Wiley‐Blackwell Encyclopedia of Social Theory, 1-2.
Sutherland, E. H. (2017). Is “White-Collar Crime” Crime?. In White-collar Criminal (pp. 3-19). Routledge.