07/12/17
This blog is focused on white collar crime which can be distinguished from working-class crime in several ways. Firstly, it is usually committed by respectable and educated middle-class people who occupy positions of status, trust, responsibility and specialist expertise within legitimate business organisations or institutions such as banks, professional partnerships and management companies. However many white collar criminals are also self-employed professionals such as solicitors, accountants and dentists. White-collar crime, therefore, is carried out whilst at work and involves the criminal abusing the trust that their superiors or clients have invested in them. These crimes therefore involve a degree of deception, duplicity and fraud which are difficult to observe because the offender will use their position and power to skilfully cover their tracks. I myself have had indirect experience of this aspect of white-collar crime. In the 1970s before I embarked upon my sociological career I was employed as an accounts clerk by a well-known ferry company. My training was in the hands of the Senior Accounts clerk who I shall call ‘Dennis’. Dennis was entrusted by the Chief Accountant of the company with a number of important financial tasks. One of Dennis’ most important responsibilities which he carried out with no supervision was to manage the payment of wages on a Thursday afternoon to the 100 or so dockers employed by the company to load and unload the ships. In 1973 these dockers each received a pay packet of about £75 each after tax. So every Thursday afternoon Dennis and I would walk onto the docks with bags containing about £10,000 in hard cash in order to pay these wages. It was Dennis’s responsibility to go to the bank and withdraw the cash, to hand over pay to the dockers and most importantly to record every transaction in the company books. Dennis was also responsible for balancing and overseeing all the company’s bank accounts. However, six months into the job I was called into the Chief Accountant’s office in which there was a police officer who quizzed me closely about Dennis’ activities. ‘Had I noticed anything suspicious?’ ‘Had I seen Dennis pocket money?’ Of course, as a minor official who deferred to the authority and expertise of Dennis I had seen nothing amiss. However it eventually transpired that Dennis had defrauded the company to the tune of £50,000 by creating imaginary dockers whom he paid every Thursday. When I was not looking, he simply added the names of the imaginary dockers to the official checklist and pocketed the money. Interestingly Dennis was never prosecuted for fraud. Instead to save the company the embarrassment of a public trial he was quietly dismissed after agreeing to pay back a fraction of the money he had stolen. Dennis was a typical white-collar criminal in this respect. Many companies are unwilling to report the crimes of their employees to the police and to take the middle-class offender to court because they fear that the bad publicity will drive their clients away. As a result, the official crime statistics on white-collar crimes are probably pretty useless as both a reliable and valid measurement of such crimes.
Many white-collar criminals also escape detection and justice because not only are they able to abuse the trust allocated to them but they are also able to exploit a unique specialist skill or knowledge that is unlikely to be shared with many others. For example, in the 1980s as computer and IT technology was taking off, it was reported that a computer programmer working for the Bank of America had managed to pull off the ‘crime of the century’. It seems he had devised a computer programme which rounded down odd cents in customer’s bank accounts, for example if you had $51.91 cents in your account the programme would round your balance down to $50.90 cents and then transfer that one cent to another bank account set up by the programmer in his name. It was reported that because the Bank of America had over 20 million accounts that the programmer had managed to accumulate over £3 million dollars over the course of four years in his account made up of all these odd cents. It seems that his scheme only ended when another computer expert spotted the programme, investigated it and reported it to his employer. However the Bank of America declined to prosecute and made a deal with the offender so that he was allowed to keep $1 million of his proceeds so long as he wrote another programme that would prevent a similar fraud from happening in the future. When writing this blog, I attempted to confirm the veracity of this crime but found nothing on- line which makes me think that this may be an example of a modern urban myth.

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Secondly, white-collar criminals resemble working-class criminals in so much that they share the same utilitarian goal of self-enrichment but the methods used by white collar criminals are very different from those employed by working-class street criminals who may use violence or the threat of it whilst committing crime . As Hazell Croall points out white collar crime rarely results in ‘blood on the streets.’ Thirdly working-class crime, especially property crime often results in a physical crime scene, for example, a building or home that has been broken into or a shop from which items have been lifted or stolen. Working-class crimes are therefore more visible. White-collar crimes rarely produce such straightforward crime scenes because their nature is more subtle, almost to the point of invisibility. This is because they often involve expertise that most ordinary people do not possess. Fourthly, an interesting dimension of white-collar crimes is that they are usually uncovered by other professionals or experts, rather than victims or the police. Both the general public and the police often lack the education and technical expertise required to recognise that a white collar crime has been committed. Many of these crimes therefore tend to be uncovered by other professionals who have the expertise to spot the technical inconsistencies that often suggest that a white collar crime has taken place. Cyber-crimes, for example, only exist digitally in cyber-space and therefore may only be visible to those who possess advanced computer skills.

An example of a white-collar criminal who abused both the trust of his patients and his employer, the NHS and who exploited his expertise for his own selfish aims was Dr. Harold Shipman who is believed to have killed over 250 of his patients over a period of 23 years. Of course, Shipman’s status as a serial killer has tended to dominate his status as a criminal but there is a strong case for arguing that his success as a white-collar criminal was responsible for his decision to start killing his patients. Doctors and especially local GPs are invested with a great deal of trust by their practices, the NHS and their patients. Very few of us have the confidence to challenge a doctor’s diagnosis, treatment or instructions to take certain medication. Similarly if a doctor announces that he or she is going to inject us with a drug, most of us assume that the doctor ‘knows best’. Most of us defer passively to doctors because we believe that a doctors’ training and expertise is superior to our layman’s knowledge. Shipman found that his authority and status as a doctor meant that it was his responsibility as a GP to assign a cause of death to the death certificates of those he murdered. He therefore signed off their death certificate as natural causes. This was rarely questioned. Shipman also abused the trust of some of his elderly patients by convincing them to leave him money in their will before he killed them via lethal injection. He also had the skills to forge documents, especially the wills of the elderly that he murdered. Note too that Shipman’s crimes were only discovered when a professional colleague became suspicious of the unusually high death rate of Shipman’s elderly patients. In other words, it took another expert in the field rather than the families of his victims or the police to uncover the possibility that Shipman was systematically murdering his patients.

It may surprise you to know that even dentists can be white-collar criminals. In 2011, John Hudson was imprisoned for two and a half years for defrauding the NHS of £300,000 whilst Jochemus Venter was also imprisoned after making false accounting claims, for example, by overcharging for treatment and claiming for non-existent work at his practice in Wales. Some dentists have been imprisoned for defrauding the NHS by lying to patients about their need for treatment. These lies often resulted in patients experiencing unnecessary and painful extractions and procedures as well as having to pay huge bills for treatment they had not needed in the first place.

Fifthly, the victims of working-class crime tend to be other working-class people whereas the victims of white-collar crimes tend to be business organisations and/or wealthy clients who are so rich that they often do not immediately realise that millions of pounds are missing from their accounts. Three cases come to mind to illustrate the types of victims of white-collar crimes. In 2004, Joyto De Laurey was found guilty and sentenced to 7 years for stealing £4.4 million from the private accounts of her employers at a merchant bank. Her bosses at Goldman Sachs were so rich they did not notice sums of up to £2.25 million at a time disappearing to pay for houses, a powerboat and Cartier jewellery.
In 1995 showbusiness accountant Keith Moore was jailed for 6 years for stealing £6 million from rock star Sting. Moore who had been Sting’s financial adviser for 15 years lost nearly £5 million of Sting’s money in a series of investments the star knew nothing about, including a chain of Indian restaurants in Australia, a scheme to convert Russian military aircraft into passenger jumbos, and the development of an ecologically friendly gearbox. The rest he used to twice stave off personal bankruptcy.
Kelley Lynch the personal manager of the Canadian singer-songwriter Leonard Cohen for 16 years was found guilty in 2005 of defrauding the singer of his $5 million pension fund. Following the release of his 1992 album, The Future, Cohen had retreated to a Zen Buddhist centre to become ordained as a Buddhist monk. Lynch was trusted by Cohen to manage his accounts in his absence. However, Lynch engineered two transactions whilst he was away. The first, in 1997, was the $5m sale of Cohen's publishing company, Stranger Music, to Sony. The second, in 2001, concerned the sale of Cohen's future royalties for $8m, also to Sony. Lynch set up a company to minimise taxes on the transaction, giving herself 99.5% ownership of the company, and Cohen the remaining 0.5%. When Cohen discovered the fraud, there was only $150,000 dollars left in his pension fund and he had to mortgage his house in order to pay his legal costs.

​​​​​​​Sometimes too the general public or tax-payers are the victims of white-collar crime. This was certainly the case when in 2009, it came to light that some Members of Parliament and the House of Lords were guilty of illegal misuse of expense accounts and allowances. This resulted in a large number of resignations, sackings and retirements. Several MPs and lords were prosecuted and sentenced to prison.

Finally one of the reasons that white collar crime is not acknowledged by the public and the mass media as a social problem comparable to that of working-class street crime is that many white-collar crimes, especially those related to tax evasion are regarded as morally ambiguous. In other words, the general public resent having to pay tax and consequently any attempt to evade this obligation is often admired and not regarded as a ‘proper’ crime.

​​​​​​​Research into white-collar crime suggest it is more common than the official crime statistics suggest. For example, Karstedt and Farrall (2006-7) carried out a self-report survey of over 4,000 people aged between 25 and 65 in England, Wales and Germany and found that 61 per cent self-reported that they had committed at least one out of a lis of white-collar offences including paying cash in hand in order to avoid taxation, fiddling travel expenses, making false insurance claims after a holiday etc.

​​​​​​​My next blog will focus on the difference between white-collar crime and corporate crime as well as the overlap between corporate crime, green crime and global crime. I will now conclude on a quote I saw tweeted by John Pullinger who observes that white-collar crime is ‘vastly underestimated in the official statistics and the severity of punishment (for white-collar criminals) is often modest in proportion to the degree of measured consequences’.