Nr.

8, 2015 REVISTA NAŢIONALĂ DE DREPT

White-collar crime: definitional issues and

classification
Lilia GÎRLA,
doctor în drept, conferențiar universitar (USM)
Jacob RUB,
doctorand (USM)
Acest articol științific este dedicat unora dintre cele mai complexe și discutabile probleme ale științei criminologice,
cum ar fi criminalitatea gulerelor albe. Scopul principal al articolului este găsirea unei definiții relevante a criminalității
gulerelor albe care ar corespunde mai bine realității moderne a criminologiei. Totodată, autorii au supus unei analize
aprofundate diferite clasificări teoretice ale criminalității gulerelor albe. Pentru a obține cele mai bune rezultate, autorii au
utilizat mai multe surse științifice străine ale autorilor de peste hotare. Prin urmare, au fost formulate unele concluzii noi
care vor fi utile pentru știința modernă a criminologiei.
Cuvinte-cheie: crima gulerelor albe; infracțiunea ocupațională; infracțiunea organizațională; valoare socială; preju-
diciul social; infracțiunea financiară; profitul financiar; sustragere colectivă; criminalitatea guvernamentală; infracțiune
corporativă.
***
This scientific article is dedicated to one of the most complex and disputable problem of modern criminology – white-
collar crimes. The main purpose of this study is to find a proper definition of white collar crimes, which will correspond
much better to the modern realities of criminology. Also, the authors have submitted to a detailed analysis of different
theoretical classifications of the white-collar crimes. In order to obtain the best results, the authors have used a lot of sci-
entific issues which belong to different foreign authors. As a result several new conclusions have been formulated for the
modern science of criminology.
Keywords: white-collar crime; occupational crime; organizational crime; social value; social harm; financial crime;
financial gain; economic crime; collective embezzlement; public governmental criminality; corporate crime.

T his scientific article represents a literary theo-

retical background of the existing situation
in studies in the field of all the variables, related and
defined white-collar crime as „an offense committed by
a person of respectability and high social status in the
course of his /or her occupation” [4].
belonging to the research subjects, shall be presented, By Edwin Sutherland, White-collar criminality
as described in the criminological, psychological, eco- in politics, which is generally recognized as fairly
nomical and behavioral literature. This chapter would prevalent, has been used by some as a rough gauge by
lead us to the presentation of a model that would de- which to measure white-collar criminality in business.
scribe the new strategy for reduction of white-collar In his scientific research the author is quoting James
criminality. A. Farley who said, „The standards of conduct are as
The issue related to the definition, we will analyze high among officeholders and politicians as they are
in the realm of the monograph research of Ray J.V. in in commercial life,” and Cermak „There is less graft
his book „Psychopathy, attitudinal beliefs and white- in politics than in business” [5]. Aditionally, the au-
collar crime” [1]. thor is quoting John Flynn, who wrote, „The average
White-collar crime has been discussed in a number politician is the merest amateur in the gentle art of
of different ways, and the definition is „hotly contested graft, compared with his brother in the field of busi-
within the community of experts” (Barnett) [2]. ness”. At the same time, he is mentioning that Walter
The sociologist Edwin Sutherland coined the term Lippmann wrote, „Poor as they are, the standards of
„white collar crime” in a speech given to the Ameri- public life are so much more social than those of busi-
can Sociological Society in 1939. While he gave no ness that financiers who enter politics regard them-
formal definition of the term in the speech, he would selves as philanthropists” [6].
eventually define white collar crimes as „crimes com- These statements obviously do not give a precise
mitted by a person of respectability and high social measurement of the relative criminality of the white-
status in the course of his occupation”. This offender- collar class, but they are adequate evidence that crime
based (and crime-based) definition was well-suited to is not so highly concentrated in the lower class as the
the tasks to which it was put, serving to give sociolo- usual statistics indicate. Also, these statements obvi-
gists a way to label and talk about offenses committed ously do not mean that every business and professional
by successful, healthy people who had ample access to man is a criminal, just as the usual theories do not mean
societal resources and who were members of respec- that every man in the lower class is a criminal. On the
table society–a concept that was out of synch with the other hand, the preceding statements refer in many cas-
prominent sociological theories of the day [3]. es to the leading corporations in America and are not
Arguably the most common definition – in no small restricted to the disreputable business and professional
part because it was the first – is from Edwin Sutherland men who are called quacks, ambulance chasers, bucket-
(1939). In his study, White-collar Crime, Sutherland shop operators, dead-beats, and fly-by-night swindlers.

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Edwin Sutherland wrote: „The financial cost of morning paper that the home of an unknown person
white-collar crime is probably several times as great has been burglarized by another unknown person, has
as the financial cost of all the crimes which are custo- no appreciable increase in blood pressure. Fear and re-
marily regarded as the „crime problem”. An officer of sentment develop in modern society primarily as the re-
a chain grocery store in one year embezzled $6oo,ooo, sult of the accumulation of crimes as depicted in crime
which was six times as much as the annual losses from rates or in general descriptions, and this develops both
five hundred burglaries and robberies of the stores in as to white collar crimes and other crimes” [10].
that chain” [7]. Sutherland saw four main factors at play here:
Sutherland’s contribution expanded the discussion 1) civil agencies often handle corporate malfea-
to include illegal deviance perpetrated by those who sance that could have been charged as fraud in a crimi-
had the tools to achieve the goals that their society nal court;
taught them to desire, and had, in fact, already used 2) private citizens are often more interested in re-
them to that effect. ceiving civil damages than seeing criminal punish-
In another scientific issue the author is quoting ments imposed;
Wendell Berge („Remedies Available to the Govern- 3) white collar criminals are disproportionately able
ment under the Sherman Act”, Law and Contemporary to escape prosecution „because of the class bias of the
Problems. 7:III.January, p.940): „While civil penalties courts and the power of their class to influence the im-
may be as severe in their financial effects as criminal plementation and administration of the law”, and
penalties, yet they do not involve the stigma that at- 4) white collar prosecutions typically stop at one
tends indictment and conviction. Most of the defendants guilty party and ignore the many accessories to the
in antitrust cases are not criminals in the usual sense. crime (such as when a judge is convicted of accept-
There is no inherent reason why antitrust enforcement ing bribes and the parties paying the bribes are not pro-
requires branding them as such” [8]. secuted) [11].
If a civil fine were substituted for a criminal fine, Since Sutherland, there continue to be debates
a violation of the antitrust law would be as truly a among sociologists who argue that this definition is too
crime as it is now. The thing which would be elimi- vague [12]. As a consequence several new definitions
nated would be the stigma of crime. Consequently, the have been proposed by scholars.
stigma of crime has become a penalty in itself, which White-collar crime – definitional issues:
may be imposed in connection with other penalties or a. Sutherland defined white-collar crime as ‘crime
withheld, just as it is possible to combine imprisonment committed by a person of respectability and high social
with a fine or have a fine without imprisonment. A civil status in the course of his occupation’.
fine is a financial penalty without the additional penalty b. The role of class has been highly contested, as
of stigma, while a criminal fine is a financial penalty the status of an offender may matter less than the harm
with the additional penalty of stigma. When the stigma done by someone in a trusted occupational position.
of crime is imposed as a penalty it places the defendant c. The term ‘crime’ is also contentious as many of
in the category of criminals and he becomes a criminal the harmful activities of businesses or occupational
according to the popular stereotype of „the criminal”. groups are not subject to criminal law and punishment
In primitive society „the criminal” was substantially but to administrative or regulatory law and ‘penalties’
the same as „the stranger”, while in modem society or ‘sanctions’.
„the criminal” is a person of less esteemed cultural at- d. An alternative definition is ‘an abuse of a legiti-
tainments. Seventy-five per cent of the persons com- mate occupational role that is regulated by law’ [13].
mitted to state prisons are probably not, aside from Today, criminologists and social scientists offer
their unvalued cultural attainments, „criminals in the various ways to define white-collar crime. These varia-
usual sense of the word”. It may be excellent policy to tions tend to overlap with one another and include the
eliminate the stigma of crime in a large proportion of following:
cases, but the question at hand is why the law has a dif- − White-collar crime as moral or ethical viola-
ferent implementation for white collar criminals than tions;
for others. Three factors assist in explaining this dif- − White-collar crime as social harm;
ferential implementation of the law, namely, the status − White-collar crime as violations of criminal law;
of the business man, the trend away from punishment, − White-collar crime as violations of civil law;
and the relatively unorganized resentment of the public − White-collar crime as violations of regulatory
against white collar criminals [9]. laws;
In the same perimeter of scientific research we have − White-collar crime as workplace deviance;
to mention that Edwin Sutherland proved an axiom: − White-collar crime as definitions socially con-
„The sentimental reaction toward a particular white structed by businesses;
collar crime is certainly different from that toward − White-collar crime as research definitions;
some other crimes. This difference is often exagge- − White-collar crime as official government defini-
rated, especially as the reaction occurs in urban soci- tions;
ety. The characteristic reaction of the average citizen − White-collar crime as violations of trust;
in the modern city toward burglary is apathy unless he − White-collar crime as occupational crimes;
or his immediate friends are victims or unless the case − White-collar crime as violations occurring in oc-
is very spectacular. The average citizen, reading in his cupational systems.

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Defining white-collar crime as moral or ethical vio- for whistleblowers overweigh the criticism. Maintai-
lations follows ideals inherent within principles of what ning or restoring public confidence and strengthening
is known as natural law. Natural law focuses on be- financial market is one of the main objectives of every
haviors or activities that are defined as wrong because modern State. Therefore, analyzing and demarcating
they violate the ethical principles of a particular cul- the role and the limits of the regulator on the topic is
ture, subculture, or group. The immoral nature of the significant for sustainable development [17].
activities is seen as the foundation for defining certain White-collar crime is financial crime committed by
types of white-collar activities as criminal. Some indi- trusted persons in important business positions. Suther-
viduals, for example, define any business activities that land in his seminal work defined white-collar crime as
destroy animal life or plant life as immoral and unethi- crime committed by a person of respectability and high
cal. To those individuals, the behaviors of individuals social status in the course of his occupation [18].
and businesses participating in those activities would In the US, the law recommends heavier sentences
be defined as white-collar crimes. when larger numbers of victims suffer a pecuniary loss
Some prefer to define white-collar crime as viola- as a result of an offender’s criminal conduct. This law
tions of criminal law. From this framework, white-col- section governs sentencing for financial identity theft
lar crimes are criminally illegal behaviors committed and other financial crimes such as larceny, embezzle-
by upper class individuals during the course of their oc- ment, fraud, and various counterfeit offenses. External
cupation. From a systems perspective, those working in victims are more common than internal victims. For
the criminal justice system would likely define white- the external victim, there is an external source causing
collar crime as criminally illegal behaviors. Crime, in damage and loss. This is in line with alien conspiracy
this context, is defined as „an intentional act or omis- theory, which blames outsiders and outside influences
sion committed in violation of the criminal law without for the prevalence of organized crime in society and fi-
defense or justification and sanctioned by the state as a nancial crime in organizations. Over the years, unsavory
felony or misdemeanor” [14]. images, such as well-dressed men of foreign descent
Applying a criminal law definition to white-collar standing in shadows with machine guns and living by
crime, white-collar crimes are those criminally illegal codes of silence, have become associated with this the-
acts committed during the course of one’s job. Here are ory. The alien conspiracy theory posits that organized
a few examples: crime (the Mafia) gained prominence during the 1860s
− An accountant embezzles funds from his em- in Sicily and that Sicilian immigrants are responsible
ployer. for the foundations of U.S. organized crime, which is
− Two nurses steal drugs from their workplace and made up of twenty-five or so Italian-dominated crime
sell them to addicts. families [19].
− A financial investor steals investors’ money. By Gerald Cliff and Christian Desilets, the term
− A prosecutor accepts a bribe to drop criminal „white collar crime” means different things to different
charges. disciplines, as well as to different camps within those
− Two investors share inside information that al- disciplines. Unfortunately, professionals within an en-
lows them to redirect their stock purchases [15]. vironment where there is general consensus about the
White collar crimes are threats to nations which are term’s meaning do not always clearly specify what they
striving hard for economic development. Such white mean by the label of „white collar crime”. This can
collar crimes under the sphere of commercial law lead to confusion and (sometimes vigorous) disagree-
mainly take the forms of capital market malpractices, ment when they interact with larger audiences that
money laundering, financing to terrorism and falsifying might contain a number of different understandings of
company accounts. These crimes do not take place just the term. It is therefore quite important, when discuss-
in a single day. These are well planned and continuous ing white collar crime, to more closely examine what
dealings by few perpetrators. Some employees, associ- different people mean by it [20].
ates or responsible citizens who come to know the hap- Generally, the authors Gerald Cliff and Christian
pening of wrongdoing may be concerned to disclose Desilets these definitions tend to concentrate on:
but will be reluctant to reveal it due to reasons of fear or − the characteristics of the offender (such as high
retaliation by their superiors or others connected. The social status) and/or;
category of people who are willing to make disclosure − the characteristics of the crime (such as crimes
of information relating to crimes committed by high occurring within the scope of one’s employment) [21].
ranking people in the society is called whistleblowers. The American author S.Shapiro taking a definitively
These whistleblowers need encouragement and protec- more sociological viewpoint, argues that definitions of
tion to fight white collar crime [16]. white-collar crime „share a fundamental problem: they
The law to deal with whistleblowers is a timely one confuse acts with actors, norms with norm breakers,
since the repercussion of white collar crimes are so the modus operandi with the operator” [22]. S.Shapiro
great that they affect innocent public, stock markets, argues that ultimately what defines white-collar crime
regulators and the government economy. Though there is not the status of the criminal or the crime itself, but
are contra views for the regulation of whistleblower a violation of the norms of trust citizens’ place in eco-
protection stating that overly complex regulatory envi- nomic and governmental institutions. Actors within
ronment will undermine people dealing with commer- these institutions exploit the norms cultivated within
cial entities, the pros of proper regulatory mechanism these institutions to lie and steal.

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The USJD’s (U.S. Department of Justice, Federal criminal offense (such as misrepresentation of the per-
Bureau of Investigation) definition focuses on the na- petrator’s abilities, financial resources, accomplish-
ture of the criminal activity as well as on the job of ments, some false promise or claim intended to deceive
the offender. The USJD uses the working definition: the victim, or possibly a deliberate effort to conceal in-
„White-collar offenses shall constitute those classes of formation from the victim) [26].
non-violent illegal activities which principally involve Focusing on the interactions between offender
traditional notions of deceit, deception, concealment, characteristics and offense characteristics, the same re-
manipulation, breach of trust, subterfuge or illegal cir- search demonstrated that white-collar crime was more
cumvention” (Simon, Swart, 1984). likely than street crime to:
This definition is clearly not one set in stone. Se- − Be national or international in scope.
veral studies have used broad definitions of WCC to in- − Involve a large number of victims.
clude acts that are not violations of criminal law [23]. − Have organizations as victims.
Currently, the definition of white-collar crime is − Follow demonstrated patterns.
still hotly contested within the community of experts. − Be committed for more than a year.
Although there is a multitude of variations, there ap- − Be committed in groups [27].
pears to be three major orientations: those that define Recognizing the differences between white-collar
white-collar crime by the type of offender (e.g., high crime/white-collar offenders and street crimes/street of-
socioeconomic status and/or occupation of trust); those fenders is significant for theoretical and policy reasons.
that define it in terms of the type of offense (e.g., eco- In terms of theory, as will be demonstrated later in this
nomic crime); and those that study it in terms of the or- text, if one of the criminological theories can explain
ganizational culture rather than the offender or offense. both types of crimes, then that theory would be seen as
Additionally, there are also those that confine the defi- having strong explanatory power. In terms of policy, it
nition mainly to economic crime, as well as others that is important to recognize that different criminal justice
include other corporate crimes like environmental law strategies may be needed for the two types of offenses
violations and health and safety law violations [24]. and that street offenders and white-collar offenders
The FBI, when it specifically addresses white col- may respond differently to the criminal justice process.
lar crimes (nowadays, it usually references „financial Consider efforts to prevent crime. Strategies to prevent
crimes” instead), uses a very similar definition: „those street crimes might focus on community building and
illegal acts which are characterized by deceit, conceal- poverty reduction; preventing white-collar crime is
ment, or violation of trust and which are not depen- much „more complex” [28].
dent upon the application or threat of physical force or In the late nineteenth and early twentieth centuries,
violence. Individuals and organizations commit these the theoretical constructs used by sociologists to un-
acts to obtain money, property, or services; to avoid derstand crime focused on it as a problem of poverty
the payment or loss of money or services; or to secure and of personal characteristics believed to be associ-
personal or business advantage” [25]. ated with poverty (such as broken homes, mental ill-
Having so many definitions in use means that it is ness, association with criminal subcultures, and living
often difficult to compare data gathered by different in slum housing) [29]. One of the most influential of
white collar crime stakeholders, and that theoretical those theories, Anomie Theory, is still in general use (in
constructs in use by one group may be completely mi- various forms) today, and was put forth a year before
saligned to the needs of another. One way that various the introduction of the concept of white collar crime.
groups have tried to reduce these inefficiencies is by It holds that in a society where members are taught to
crafting definitions that could enjoy buy-in from larger value attaining certain goals (such as wealth), but the
groups of stakeholders, providing them a common lan- means to achieve those goals are unevenly distributed,
guage (and compatible tools) for discussing white col- those without access to the societal prescribed means
lar crime. are put under considerable pressure to find other ways
In 1996, the National White Collar Crime Center (including crime) to achieve those goals. In short, the
convened a group of noted academics specifically to theory holds that crime is a symptom of some members
address this definitional dilemma. Attendees were se- of society not having the tools to achieve what their
lected from among the most noted scholars in the cri- society defines as success [30].
minal justice field, who had devoted significant effort to Weisburd, Chayet, and Waring [31], used official
the study of white collar crime. Several aspects of white crime records of specific types of WCC such as embez-
collar crime were examined and discussed at length. zlement, mail fraud, false claims, credit fraud, bribery,
The result of the process was that white collar crime tax evasion, securities fraud, and antitrust violations.
was examined from a variety of perspectives. Most Other studies [32] have measured WCC as intentions to
agreed the following characteristic features of WCC: offend using vignettes. Of the individual-level theories,
1) the lack of direct violence against the victim – the rational choice/deterrence has received the most atten-
critical element; tion among WCC researchers [33] likely because WCC
2) the criminal activity should have been the result is seen as a calculating and rational decision. Addition-
of an opportunity to commit the crime afforded by the ally, individuals in corporations are trained to make
offender’s status in an organization or their position of decisions based on maximizing profits, and as such are
respect within the community; presumed to be rational decision-makers. Most studies
3) deception to the extent necessary to commit the that have tested the theoretical propositions of rational

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choice theory as applied to WCC find support for the for such a report to reach the news it needs the follow-
theory [34]. For example, Patternoster and Simpson ing: the sum stolen should be high, the steal needs to be
[35] found that individuals were less likely to commit related to some scandal, or the suspect needs to be of
WCC when confronted with formal sanctions, moral important figure. These offences usually bore the pub-
commitments, and organizational factors. Nagin and lic, and also most people lack the financial knowledge
Paternoster and Piquero [36] found that there is an inter- to have understanding of these crimes. And finally, the
action between individual differences (self-centeredness perpetrators themselves do not perceive themselves as
and desire-for-control, respectively) and the likelihood criminals.
of being deterred by perceived risk. More specifically, Classification of White Collar Crimes. White col-
Nagin and Paternoster found that individuals who are lar crimes are crimes that are non-violent in nature com-
self-centered are less likely to weigh the costs of en- mitted by financially motivated high ranking people in
gaging in WCC, where Piquero et al. found that desire- the society. These white collar crimes take many forms
for-control was positively related to sanction threats and such as bribery, fraudulent investment schemes, capi-
negatively related to perceived benefits. tal market manipulation, insider trading, cyber crime,
White collar crimes, as traditionally defined, are money laundering, identity theft, terrorist financing and
conflated with many other types of illegal or deviant falsifying company accounts etc. In general, these are
activities with which they have nothing significant in malpractices for financial gain [40].
common. D.O. Friedrichs has argued elsewhere that Repercussions of white collar crimes are many. It
the concept of white collar crime is inevitably a heuris- creates fear in the minds of an ordinary citizen in his/
tic and relativistic term, and illegal and harmful activi- her day-to-day transactions and it affects the business
ties may be viewed as more or less purely white collar and the financial system of the country as well. Sudden
crime; some kinds of illegal activities are characterized collapse of large companies is a good example for such
as cognate, hybrid, or marginal forms of white collar malpractices because it is crystal clear that the reasons
crime [37]. But all such activities have a clear, logi- behind a corporate collapse is a series of wrong doing
cal relationship to both the original meaning of white which is not done by one, but by many, surreptitiously.
collar crime put forth by Sutherland, and the meaning Leaking of secret information leading to wrong doing
in public discourse. Many of the activities identified as cannot be prevented. Those who come to know about
forms of occupational crime, occupational deviance, the surreptitious dealings are the centre point of this
and workplace crime, have absolutely no logical or co- article. Why are they not making known the informa-
herent relationship to white collar crime. Accordingly, tion about such secret illegal dealings as they become
it would be far more productive to retain the original aware, to the appropriate authorities is the crucial ques-
meaning assigned to occupational crime by Marshall tion. It is obvious that it is due to fear of reprimand or
Clinard and Richard Quinney, with a qualifying thesis, punishment directly or indirectly by the perpetrators.
as financially oriented offenses committed by individu- Classifications of crimes are done using various
als within the context of a legitimate occupation, and methods and it varies in different judicial systems. One
specifically made possible by that occupation; to restrict such classification is traditional crimes falling under
the use of occupational deviance to activities deviating the penal code or criminal code of a country and the
from norms within an occupational setting, including other.
the norms of the employer, the norms of professional Many argue that the term „white-collar crime” in-
associations, and the norms of co-workers; workplace sufficiently describes the wide range of offences com-
crime is best restricted to conventional forms of crime mitted by the „powerful”, be they wealthy individuals
– e.g. homicide; assault; rape; molestation; robbery; or corporations. Most accept a distinction between:
theft; etc. – that occur at the workplace. Such concep- − „classic” white-collar crime, which involves
tual distinctions should be useful in theorizing about personal gain, at the expense of employers, „the gov-
crime, in engaging in empirical study of it, and in for- ernment” or clients (which can also be described as oc-
mulating policies in response to it [38]. cupational crime) [41];
E.Goode [39] who deals in social deviation, de- − offences which involve increased profits or the
scribes the unique characteristics of white-collar crimi- survival of the organization – often known as organiza-
nality and claims that the corporate criminality is con- tional or corporate crime [42].
ducted by a complex technical way and out of inter- The crime pie of white-collar criminality includes:
action with others. In majority of cases it is combined − embezzlement – a theft of a white-collar emp-
with a legitimate behavior, diffusion of the victims, the loyee from the corporation he is employed in;
enormous amount of the financial sums under discus- − collective embezzlement – a crime against a cor-
sion over a long period of time, their acts almost never poration that is conducted in the name of the corpora-
sued as it is difficult to detect and present irrevocable tion;
evidences, and they are not sentenced to long prison − criminality of the free professions;
terms, the white-collar criminality is not compatible − corporate crime; and
with the stereotype of a real criminal – these offences do − public governmental criminality – personal cor-
not arouse the condemnation responses typical to street ruption and briberies of political position holders.
crimes, and are not involved in a real social stigma. Others prefer to use the broader term economic
These offences are not reported by the media in a full crime (used in many European, particularly Scandina-
and detailed manner as the street crimes are. In order vian countries, where the term „white-collar crime” is

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rarely used) [43]. Economic crime defined as „crimes crime, and it has been used interchangeably with such
of profit which take place within the framework of com- terms as occupational deviance and workplace crime.
mercial activity” [44]. In the interest of greater conceptual clarity within the
White-Collar Crime Offence includes: field of white collar crime the argument is made here for
− Corporate and/or business fraud White-collar restricting the term ‘occupational crime’ to illegal and
Crime; unethical activities committed for individual financial
− Bribery and Corruption; gain – or to avoid financial loss – in the context of a le-
− Insider dealing and market abuse; gitimate occupation. Occupational crime refers to per-
− Money laundering and terrorist financing. sonal violations that take place for self-benefit during
Another classification is by way of status of people the course of a legitimate occupation, while corporate
who commit crimes. Division of white-collar crime (organizational) criminal behavior refers to crimes by
and blue-collar crime comes within the latter category. business or officials, committed on behalf of the em-
These are generalized classifications coined by the me- ploying organizations. Although organizational crime
dia to make ordinary people understand the nature of refers to crime on behalf of the organization, it becomes
the crime, and are not codified as crimes in the classic corporate (business) crime when it is done for the be-
sense in our judicial system. nefit of a private business. Thus, much of what ordinar-
A notable iteration is that of Marshall Clinard and ily would be branded as corporate crime in a free en-
Richard Quinney. These authors suggest that white- terprise economy is labeled organizational crime when
collar crime should be divided into corporate and oc- committed by state bureaucrats in socialist systems. The
cupational crimes. organizational, economic crimes are also distinct from
− Corporate crime is committed by employees for political crimes by government; the latter have more to
the benefit of a corporation, and occupational crime do with efforts to maintain power, ideology, and social
committed by employees for personal gain. Corporate control than with economic advantage [46]. The term
crime is often veiled in „improper accounting proce- ‘occupational deviance’ is better reserved for deviation
dures”. For example, American International Group from occupational norms (e.g. drinking on the job; se-
(AIG), an insurance broker for large corporations, was xual harassment), and the term ‘workplace crime’ is bet-
charged with inflating assets and deflating losses. The ter reserved for conventional forms of crime committed
goal was to improve the financial profile of the compa- in the workplace (e.g. rape; assault). The conceptual
ny to the market. Corporate malpractices were not very conflation of fundamentally dissimilar activities hinders
common during the early part of the twentieth century theoretical, empirical, and policy-related progress in the
since there was only little growth of corporations. When field of white collar crime studies [47].
corporations started to develop rapidly and became the Gerald Cliff and Christian Desilets have contrib-
major contributor to the economy, misdeed also origi- uted essentially to the interpretation of the term „white
nated. Perpetrators, with the only objective of making collar crime”. In their opinion, white collar crime can
quick money, went to every extreme to achieve it. As refer to:
a result, there were many collapses. These were due to − Financial crimes;
non adherence of accepted accounting standards or cor- − Non-physical (or abstract) crimes. That is, crimes
porate governance rules and capital market manipula- that „occur” on a form, balance book, or computer;
tive activities. If there had been a tip off and a timely − Crime by or targeting corporations;
investigation, the position would be different. One can- − Crimes typically committed by the rich;
not come to a conclusion that no one was aware of any − Criminal businesses or organizations. Including,
suspicious activity until the real collapse or the exact for some, organized crime and terroristic organiza-
occurrence of capital market manipulation that affected tions;
innocent general public or investors in billions. The cul- − Corporate or professional malfeasance. For
ture of silence has not only resulted in many corporate some, this can include acts that are immoral, but that
failures but wrongdoers go undetected gives more and are not specifically prohibited by law (for example, an
more encouragement to the prospective wrong doers. insurance company automatically targeting every poli-
There are many reasons for one to decide not to reveal cyholder who gets diagnosed with breast cancer for an
the information he becomes aware of. It may be that he aggressive fraud investigation to find any possible pre-
was not bothered; he did not understand the gravity of text to drop the account).
it or due to fear of retaliation. If it is the first two rea- − Anything that is against the law that the average
sons, then the person should be encouraged to become beat cop would not typically handle. Essentially, every-
a whistleblower while assuring that he will be protected thing but street crime [48].
by the law. If it is the third reason, i.e., due to fear, there On the other hand, an example of occupational
should be adequate laws to protect him [45]. crime would be embezzlement, such as when Bernie
− The concept of occupational crime – as one of Madoff absconded with his investors monies for his 4
the principal forms of white collar crime – has been own personal gain. Occupational crime can also be as
quite familiar and widely invoked since the publication simple as pilfering from the office supply cabinet:
of Clinard and Quinney’s influential Criminal Behav- Bernard Lawrence Madoff founded Bernard L. Ma-
ior Systems: A Typology. More recently, however, the doff Investment Securities LLC, a small Wall Street in-
term occupational crime has been applied to activities vestment firm in 1960. The firm was initially a small
quite removed from the original meaning of white collar penny stock trader but it grew fast due to its use of in-

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novative computer technology. The firm became one sibility, organizational crime illustrates the diffusion of
of the largest market makers in the US, and by 2008, responsibility. Where an employee neglects or violates
the year of B.L. Madoff’s arrest, Bernard L. Madoff a regulation they can claim that it is ultimately the orga-
Investment Securities LLC was the sixth largest market nization’s responsibility to ensure that regulations are
maker on Wall Street. One division of the company was complied with. This distinction parallels others [51].
the „advisory and investment management division”, While these definitions were vital for expanding the
where investors could put their money in a hedge fund. realm of sociology and criminology, they were not as
Over the years this „hedge fund” continued to deliver well-suited to the needs of other criminal justice stake-
an almost constant return to the investors on just above holders who dealt with these issues in a more practical
ten percent. This is a very high return given over a long sense (including policymakers, law enforcement, and
period of time, which made people concerned. Madoff the legal community). These definitions are geared for
himself explained to The Wall Street Journal in 1992 asking why white collar crime occurs or who commits
that there was nothing special with the high returns, it, but they are not as well-suited to asking questions
and referred to the high average annual returns for the about how much white collar crime is occurring, or
US stock index. As it would turn out later, the fund was whether prevention methods are working.
in fact the world’s largest Ponzi scheme. Gerald Cliff and Christian Desilets have shown a
The method of the scam was a classic Ponzi scheme. model of white collar crime that leant itself somewhat
The definition of a Ponzi scheme given by Investopedia more to empirical data analysis was Herbert Edelhertz’s
is: „A fraudulent investing scam promising high rates 1970 definition: „An illegal act or series of illegal acts
of return with little risk to investors. The Ponzi scheme committed by nonphysical means and by concealment
generates returns for older investors by acquiring new or guile, to obtain money or property, to avoid the pay-
investors”. This was basically how the advisory and ment or loss of money or property, or to obtain business
investment management division of Bernard L. Madoff or personal advantage” [52].
investment securities LLC operated. The division star- Herbert Edelhertz identified four main types of
ted as a perfectly legitimate business, but he confessed white-collar offending:
that the returns given since approximately 1995 were − personal crimes („crimes by persons operating
fabricated. When a customer made an investment, he on an individual, ad hoc basis, for personal gain in a
simply put the money into a bank account, and when non business context”);
asked for a withdrawal he took the money piled up in − abuses of trust („crimes in the course of their oc-
that account. Withdrawals were simply covered by new cupations by those operating inside businesses, Gov-
investments. Bernard L. Madoff used a variety of tech- ernment, or other establishments, or in a professional
niques that made it difficult to disclose the scam. At the capacity, in violation of their duty of loyalty and fidelity
end of each month Madoff sold all stocks and financial to employer or client”);
instruments so that the hedge fund only reported the − business crimes („crimes incidental to and in
amount of cash to the authorities. Further on, investors furtherance of business operations, but not the central
did not have any online access to their investments, in- purpose of such business operations”); and
stead they received a mail with their account informa- − con games („white-collar crime as a business, or
tion and balance each month. As a result of these pre- as the central activity of the business”) [53].
cautions and many more, explained in the next section, We have to begin using something more along the
it took until late 2008 before the scam was exposed, lines of „economic crime”, „elite crime”, or simply „fi-
although people had accused the so-called hedge fund nancial crime”.
for fraud as early as 2001 [49]. The status of offenders continues to be an important
A related concept that again focuses on the offender feature of these definitions, with some referring to elite
is „organizational crime” – the idea that white collar crime or crimes of the powerful, and to corporate and
crime can consist of „illegal acts of omission or com- state crime. Some activities can be seen as largely mo-
mission of an individual or a group of individuals in a tivated by financial gain, whereas others intentionally
legitimate formal organization in accordance with the or otherwise cause physical harms. Thus, some people
operative goals of the organization, which have a seri- distinguish financial white collar crimes from others.
ous physical or economic impact on employees, con- Many people now accept that a broad distinction can
sumers or the general public” [50]. The distinction be- be drawn between offences primarily motivated by in-
tween occupational and organizational crime points to dividual monetary gain and those that are more directly
some major contrasts. Broadly speaking, occupational related to the survival or profitability of organizations,
crime, a typical example of which is embezzlement, although in this respect, as in so many other respects,
involves offenders, either individually or in groups, en- the characteristics of offenders are also important.
gaging in illegal or rule-breaking activities for personal
gain at the expense of consumers, clients or employ-
ers. Organizational crime, on the other hand, a typical Refrences:
example of which is the neglect of safety regulations, 1. Ray J.V. Psychopathy, attitudinal beliefs and white-collar crime.
Department of Criminology College of Arts and Sciences University of
does not involve personal gain, but may be seen as be- South Florida, February 7, 2007, p 1-6, 8-14, 15-18, 21-31.
ing ‘for the good of’ the organization by enhancing 2. Barnett C. The Measurement of White-Collar Crime Using Uniform
profitability or efficiency. Whereas occupational crime Crime Reporting (UCR) Data. U.S. Department of Justice, Federal Bureau
more obviously involves intent and individual respon- of Investigation, 2000, p.1.

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3. Gerald Cliff Christian Desilets. White Collar Crime: What It Is and linquency, no.32, 1995, p. 399-424; Piquero N.L., Tibbetts S.G., Blanke-
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Notre Dame Journal of Law, Ethics & Public Policy, vol. 28, Issue 2, neutralization in explaining corporate crime. In: Deviant Behavior, no.26,
Symposium: White Collar Crime: The Moral, Ethical, & Legal Implications 2005, p.159-188;
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Sociological Review, vol. 10, no.2, 1944. Annual Meeting Papers, April Society Review, no.30(3), 1996, p. 549-584.
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