Socio-economic Factors influence White-collar Crime

Mr. Steve, a director of a regional rural development organization, owes a loan shark some 4000 dollars, whose repayment is overdue. He has only 48 hours to settle his debt. However, he has no prospects of raising the amount; presently, he could not think of any legal channels through which he can secure the money within the given time limit. Consequently, his immediate rescue lies on the other side of the law: crime. Nonetheless, whichever crime he decides to commit, it is not a hit-and –run job that can be implemented in the spur of a moment.

It has to be selectively chose, taking into considerations the cons and pros of the operation, required resources, as well as meticulous planning of the whole process. Steve is a highly respected man in the society. As a social worker engaged in local development projects, he has gained recognition and fame among the locals. As a result, he is worried that engaging in deviant crime such as theft or robbery could tarnish his reputation. As much as he wants to secure the money by all means, he also intends to maintain his good social standing.

As a last resort, therefore, he determines that a crime that does not involve violence could suit him best. For the first time in his career, he entertains the idea of pinching the organization’s money. The involved risks are insignificant compared to the gains. He is confident that he will not be caught. Besides, the organization receives funds from individual donors, which he hopes to use to repay the money within a short time. In any case, the biggest concern at the moment is not the organization, but the loan shark who won’t wait longer than 48 hours.

As he ponders on the next move, he notices a pile of loan application forms lying on the table. The forms belong to local applicants for financial assistance, most of whom do not make a follow up for the processing of their applications. Then an idea hits him: he can forge the application forms, and make it look like some of the applicants had been given money, while in the real sense he could go to the bank himself and withdraw the money. In this way, the theft could take time to be detected, and even much longer to be traced back to him.

A number of other factors work to his advantage, such that the crime seems a simple operation. In his position as a director, he wields considerable influence in the organization’s management, with high connections at the central office. It is not likely, therefore, that his movements will be monitored very closely. At the same time, he has frequently visited the local bank in the course of processing loans and conducting various transactions for the organization. Consequently, he knows most of the bank employees, and therefore they could not suspect him because he plans to forge signatures to withdraw the money.

In addition, the organization’s central office is not strict with its rules, giving Steve an easy task to do his forgery. Similarly, the government’s laxity in dealing with non-profit organizations such the one he works for, offers him an easy way to dodge the law in his faked transactions. Lastly, the victims he chosen to forge their applications belong to the lower class in society and as such, are less likely to make any legal complaints. In fact, they only follow up their applications when they are notified that they qualify for a loan.

Finally, Steve executes his plans without encountering any difficulties. On the check-counterfoils to be kept in the organization’s records, he writes the names of the applicants. However, he writes his own names on the bear-checks to be presented to the bank. To avoid suspicions for drawing two checks at the same time, he makes the withdrawals in two days. In less than 48 hours, Steve manages to swindle his organization of $ 4000 without raising any suspicions from the organization’s central office, the bank, the government as well as the victims whose signatures he forged.

By examining various perspectives in criminology, the paper aims to show that white-collar crime is a product of social and economic factors, which motivate individuals to use their positions to commit offences. For effective crime prevention, authorities should minimize the factors that favor criminal activities. Criminology is one area of social human behavior that has concerned criminal psychologists, behavior theorists, law enforcement agencies and the larger society for a long time. Questions arise as to what really makes a criminal (Rafter, 1998).

It is widely believed that criminals behaviors are associated with an individual’s character traits, leading to the conclusion that criminals are born (Siegel, 2008). Perhaps it is because of these notions that jailed criminals are taken to rehabilitation centers with the aim of changing their behaviors. However, “many offenders do not start out habitual criminals, and in many cases never see themselves as such” (Friedrichs, 2003). Other research studies in the area of criminology have found that people are not just born criminals, but products of the socio-economic environment in which they operate (Haimowitz, 1973).

For instance, during the great depression, criminal activities increased in the US as individuals struggled to meet their financial needs (Carr, 2005). Those who were unemployed engaged in violent crimes such as robbery and burglary, because their low positions in society did not allow them other means such as corruption. On the other hand, those in employment were involved in white-collar crimes since their positions enabled them to make fake deals without the knowledge of their employers.

Though they were not criminals by definition, they committed crimes due to the financial problems they faced, and were encouraged to do so by the advantages that their job positions gave them. After the depression, rapid economic growth in the US was also followed by increased blue-collar crimes because there was plenty for criminals to steal (Cullingford, 1999). Nonetheless, financial strains are the major factors that motivate individuals to engage in criminal activities.

This is more especially the case with blue-collar crimes, where poverty and other socio-economic pressures make individuals to resort into criminal activities to make a living. This is the reason why violent crimes such as robbery, rape and burglary are common among the lower classes of the society. Such cases are prevalent in poor neighborhoods such as slums and other overcrowded settlements. What is similar in these patterns of crime is the fact that circumstances could lead individuals who are not normally criminals to violate rules and engage in crime.

Considering the case of Steve, it is very probable that he would not have considered forgery were it not for the urgent need to repay the loan. Similarly, he would have not taken this decision if his position as the organization’s director had not given him the chance to make transactions without any difficulties. Moreover, the crime could have been detected in time and prevented if he had not used his popularity with the bank employees, the ignorance of his victims and the laxity of the law concerning non-profit organizations.

From the initial stages of planning his crime and carrying it out, circumstances favored him all the way, until the time he finally presented the checks to the bank and received the money. The loopholes in the law and the organization’s management ensured that the crime could go through without drawing the attention of other parties. It is commonly thought that employed people could not engage in crime because they have a constant source of income. However, it has been repeatedly shown that even the rich man could violate the law to for a gain, if circumstances allow.

Edwin Sutherland points out that white-collar crime is common with the society’s most elite. Incidentally, he defines white-collar crime as “a crime committed by a person of respectability and high social status in the course of his occupation” (Sutherland, 1939). When the gains are high to overshadow the involved risks, individuals could be tempted to make illegal deals. For instance, politicians engage in corruption not because they want to put food on the table-, which is a probable cause for blue-collar crimes, but because the stakes are too tempting to walk away from.

In similar manner, most white-collar crimes present individuals with rewards that they could do anything to get. Another aspect of white-collar crime that makes it attractive is that it needs little input from the offender. Unlike blue collar crimes which require financial resources such as money to secure firearms, as well as backup manpower to stage a robbery or take hostages in cases like piracy, white-collar crime can be committed by one person from the safety of the office, and all it requires, funny enough, is a pen and a talented hand to make forgeries.

In fact, white-collar crime is usually the game of the learned, who understand the legal loopholes that allow them to get away with a forgery. Steve understood these shortcomings of the law and the organization’s management very well, such that he never required any external assistance to execute his plans. Many theories have been formulated to explain the nature of white-collar crime, and the factors that contribute to their prevalence among the high-classes in the society. The Rational Choice Theory by Jeremy Bentham argues from a utilitarian perspective, by positing that individuals make rational choices about their actions.

Accordingly, offenders will weigh the risks and gains involved in a given criminal activity before engaging themselves. They evaluate the whole plan and determine if there are any difficulties to be encountered, and if so, how they will be overcome. This applies to Steve, in that he assessed the risk of blue-collar crime, and realized that his good name in the society will be compromised. Similarly, he evaluated the suitability of forgery, and decided that it was a safe way to get the money and protect his image.

His rationalization also informed him that the victims he had chosen could not make a follow up to find out the progress of their applications, nor lodge legal complaints for the abuse of their identities. However, it is the Routine Activities Theory (Cohen and Felson, 1979) that clearly highlights the nature of white-collar crime in the society. The theory puts emphasis on the characteristics of a given crime, rather than focusing on the behavior of the offender. It recognizes the factors that must be available for a crime to take place:

? the offender must identify a suitable victim to exploit- Steve chose the organization and the uninformed loan applicants ? the offender should have a motive to engage in crime- Steve needed to repay his loan within the shortest time possible. But the third is the most important: ? absence of authority to hinder the offender’s efforts or prevent his plans- in the forgery carried out by Steve, the management of the organization gave him autonomous power to conduct the organization’s activities without seeking permission from the central office.

Likewise, the government’s policy on non-profit organizations cleared the way for legal complications, such as lack of frequent auditing. For this reason, he hoped to re-pay the money before the offence could be detected. Even then, he planned to use contributions by individual donors, meaning that there were no rules requiring him to record all contributions received by the organization. This theory shows that it does not require one to be a natural criminal to commit an offense. In all respects, Steve is not a criminal.

On the other hand, it takes an incentive and a timely opportunity for any normal person to commit a crime. When the situation is favorable for a crime, even the most law abiding citizen could violate that very law. Thus, character plays an insignificant role in the making of a criminal. The bottom line is that everyone is in fact a potential criminal, and all that is needed is a crime-favoring environment to make them commit an offence. The Watergate scandal that stained the US politics in the 1970s is a classic indication that even the protectors of justice in society could engage in crime.

The break-in into the headquarters of the Democratic Party’s offices in Washington does not suggest that President Richard Nixon was a criminal. In fact, under any other circumstances, he could not have commissioned the act. However, the stakes for him were too high: the elections were at hand, and he could do all that was necessary to beat his opponents. Besides, with the resources at his disposal, he had the means to do it. The victims were the people he wanted to defeat, and so he had a good motive to encourage the break-in.

In this regard, crime prevention efforts ought to focus on minimizing the factors that encourage people to engage in criminal activities. For instance, if Steve was required to submit the checks to a board of the organization’s directors to be approved, then he would have been discouraged from carrying out the forgery. Likewise, if the banks required that the release of money could only take place after a valid notification from the organization’s central office, together with the names of the applicants, then the crime could have been prevented at its initial stages.

There was no way Steve could have sat in his office, faked the applications, forged the checks and then confidently walked into a bank and received money in a span of 48 hours. The Theory of Crime Prevention (Clerk, 1997) takes this perspective of reducing the chances of individuals committing offenses because of favorable circumstances. It identifies the fact that given a chance and a good incentive, anybody can commit a crime. The theory’s strategy of crime prevention, accordingly, is to increase the risks involved a criminal activity, while at the same time reducing the rewards.

However, it doesn’t always work that way. The risks can be increased by harsh penalties such as long jail terms, hefty fines or life imprisonment. Ideally, no man could wish for any of the above. Nonetheless, as the expression “worth the risk” suggests, some crimes are too rewarding that the risk is nothing in comparison. Actually, most governments have stiff penalties for crimes like robbery with violence, drug trafficking and rape. Regardless, drug barons still take the risk to smuggle illegal drugs across international borders, with some operating as cartels.

The criminals mint lots of money from their illegal activities, such that they are able to bribe law officials and investigation agencies to allow them pass through immigration and international airports as easily as strolling on a beach. What is required, therefore, is to equally eliminate chances of criminals using their ill-gotten wealth to promote their illegal activities. Accordingly, the risks should also apply to government agents who collude with criminals after receiving a fraction of their proceeds.

Unfortunately, most government agencies involved in crime prevention operate in ways that allow criminals to penetrate into the agency’s activities and collaborate with insiders. Their agents stay in the same posting for very long time and working on the same criminal activities, such that the offenders reach out to them with tempting bribes, and sometimes with death threats. When the criminal knows who is after him, and is convinced that he is safe as long as he is not caught red handed, the risk of a crime reduces significantly.

It is a fact that there are many known criminals, but they could not be arrested for lack of evidence. What make this possible is the networks they built, such that they conduct their activities through third parties. Relating this to white-collar crime, senior employees could use their juniors as go-in-betweens. In most corruption deals involving government and corporate employees, the crimes are planned at the highest level, while junior employees, who incur the risk when they are found out, carry out the actual offense. To avoid such cases, accountability should be clearly spelled out in relation to one’s position.

It reduces the chances of the big offenders escaping justice because the evidence does not point directly to their office. In government ministries, for instance, it is common for the junior secretaries to be fired for carrying out orders by their seniors such as ministers. Fighting white-collar crime also requires the protection of potential targets by the law (Shover and Paul, 2000). Offenders take advantage of their privileged status to exploit vulnerable targets. In the crime script outlined above, Steve exploited the ignorance of the loan applicants, whom he knew could not take any legal actions.

The greatest danger of white-collar crime, however, is the factor of the offender’s inside knowledge concerning the operations of the organization (Mishra and Pandey, 1998). For this reason, organizations and companies should be shielded against the possibility of employees using their knowledge about the organization’s operations to steal money. When an employee-offender knows that it will take time for the company’s management to detect a fraud, or knows what files should be filed in order to conceal a forgery, the chances of committing a crime increases, due to the reduced chances of getting caught.

Thus, organizations should adopt a complex filing system, such that records are not kept by one person alone. In investigating crime, law agencies should widen their net to cover the offender’s social circles. Sutherland referred to the Symbolic Interactionism theory, which argued that people’s behaviors were influenced by their social interactions, i. e. by the people they socialized with. In this sense, offenders could be encouraged to commit crimes because of their friends and acquaintances in various positions with the workplace.

Because they have influence with their friends, they could easily use them to carry out their private plans without being suspected of ill motives. It is necessary, therefore, for investigators to take into account that other employees can actually aid a crime without their knowledge. On their part, organizations should study the social relations of employees at the work place, as this helps in predicting the likelihood of collusion among employees. In conclusion, white-collar crime is influenced by circumstances that motivate an individual’s to commit an offence, as well as the weaknesses of the law that allow them to go undetected.

Criminals are not always influenced by their character traits as is commonly believed. Other socio-economic factors such financial strains can force people who are not usually criminals to violate the law. Employees take advantage of their positions to commit crimes within organizations, because of their knowledge about the organization’s operations. To effectively prevent white-collar crime, law enforcers should aim to increase the risks involved by sealing legal loopholes that offenders take advantage of.

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