Motivation and emotion/Book/2017/White collar crime motivation

White collar crime motivation:
What motivates white collar crime and what can be done about it?

Multimedia presentation (3 min)

Overview

Figure 1. Money is one of the key considerations in white collar crime

What are you willing to do to "get ahead"? In contemporary society, academic achievement to gain a successful job is a likely career path undertaken by many individuals. Did you know however that this increases your likelihood of engaging in white collar crime? White collar crime is an issue within contemporary society that differs largely from traditional criminal behaviour. This chapter aims to identify an offender profile for white collar crime with considerations for demographic, personality and individual differences, as well as underling motivational drives in order to better understand appropriate measures for preventative action.

Focus questions

What motivates people to commit white collar crime What are the effects of white collar crime What can prevent white collar crime

What is white collar crime?

Definition

White collar crime is criminal behaviour for financial benefit in a non-violent manner which is often achieved by a misuse of position, power or trust. The term "white collar crime" was first used by criminologist Edwin Sutherland in the 1940s despite the specific criminality occurring throughout evolution (Croall, 2001). Sutherland (1940) initially characterised white collar crime as criminal behaviour committed by high profile or white collar citizens during the course of their occupation. Sutherland (1945) further identified two defining principles of white collar crime; falsification of asset values and deceit in the manipulation of power.

Does Sutherland's definition mean that the cashier who fraudulently used your credit card details after your purchase to buy unauthorised items will evade criminal charges as they are not of high profile, executive level or an upper class citizen? It is clear to see that this early definition does not capture the extent of white collar crime in a contemporary society. Sutherland's definition was soon criticised specifically in regards to the crime being committed by high profile citizens, as middle class citizens are most often found being charged in the judicial system (Van Slyke, Benson & Cullen, 2016). As determined by Van Slyke, et al. (2016) a more appropriate definition is that of offence type which incorporates occupation and fiscal benefit which can be in favour of the individual or the business (Vardi & Weiner, 1996). It is important to note that within the broad term white collar crime there is an additional two underlying crime types; "corporate crime" which is committed by organisations and "occupational crime" which is committed by individuals (Holtfreter, 2005). This differentiation is signficant when considering offence types, offender profile and motivational factors (Friedrichs, 2002).

Figure 2. Corrupt business practices being handled in cash to avoid detection from authorities

Types

The offences that are considered to be white collar crime vary depending on offender (i.e. individual or business) however are central to increasing or maintaining financial benefit for the perpetrator (Holtfreter, 2005). Table 1 demonstrates the extensive variation of white collar crimes.

Table 1.

Types of White Collar Crime Committed by Individuals or Organisations

Type	Description	Victims	Example
Fraud	Deception for gain	Customers Organisation	Advertising a cleaning service requiring upfront payment without the intention of carrying out the job
Insider trading	Using confidential information to influence business practices and stock exchange	Organisation	An employee encourages family and friends to buy stocks in the business at a low price before the release of a new product which is likely to increase stock market value.
Embezzlement	Using assets in an unintended or inappropriate manner without consent of the fund owner	Organisation Consumer	A lawyer uses client funds invest in real estate
Extortion	Using threats or being forceful to attain a commodity against the victim's will	Customer Employee	A restaurant owner threatens to destroy an opposition's reputation with false reviews unless they handover their award winning recipe
Bribery	Offer of a commodity to change behaviour	Organisation Consumers Stockholders Employees	A company offers a lump sum payment to a stockholder of an opposition company to withdraw their investment
Money laundering	Disguising money gained by illegal means as legitimate income	Government Consumers Stakeholders	A bank allows suspicious transactions to be deposited and credited to their account without investigating or notifying authorities

Victims

As demonstrated in Table 1, the victims of white collar crime depends largely on offense type and can range from individuals to organisations and Government. As with other crime, victimisation can be demonstrated in a ripple effect whereby the intended target is not the only one effected by the crime. Behind every business, is employees, with families, and financial commitments such as loan repayments, mortgages, student fees and the like which are impacted when financial or business losses occur. This observation can be considered as a double-edged sword whereby committing corporate crime may prevent financial or status loss yet inflict the loss on another (Piquero, 2011).

Aside from the abovementioned materialistic victim impact such as financial losses and loss of assets a more sinister effect was demonstrated by Brody & Perri (2016) termed red-collar crime with the inclusion of suicide and murder-suicide. As defined by Sutherland, white collar crime is non-violent however there have been recorded instances of the use of violence as a result of white collar crime, such as murder to silence whistle-blowers; this phenomenon is described as red-collar crime (Brody & Kiehl, 2010). The severity of victim impact is demonstrated in Brody et al (2016) analysis which demonstrated that the individuals and the families of individuals affected by white collar crime ended their own life and the lives of others.

Real life examples Do you want to hear real life white collar crime stories? Watch this YouTube video to gain more of an insight into the offenders, victims and implications of white collar crime (Real Stories, 2017) (YouTube video 44:37 minutes).

Psychopathology and offender profile

Demographic

What comes to mind when you picture a white collar criminal? If you said an over 50, Caucasian, male then you would be correct for the most part. Wheeler, Weisburd, Waring & Bode (1987) determined that white collar criminals were more often of Caucasian descent, male, educated and employed compared to other criminal offenders. These findings however were substantially supported by Poortinga, Lemmen & Jibson (2006) and it was further determined that white collar criminals are less likely to have a substance abuse problem than other offenders. Also of differentiation is that white collar criminals engage in crime at a later age, opt out of crime at a later age and have longer criminal careers (Van Onna, Van der Geest, Huisman & Denkers, 2014). These findings are rational whereby continued ethnicity differences in access to, and completion of education can influence the likelihood of becoming employed; and employability increases the opportunity to commit occupational based crime.

It is logical to understand the clear gender difference within the 1980s as women held a less pronounced presence within the workforce however it is interesting that these findings were replicated in a modern age workforce. Holtfreter (2015) explained that the sustained gender differences can be attributed to what positions are held by males and females within the workforce whereby males are usually in a more executive role and females occupy less prestige roles. With the current workplace structure providing women with less opportunity to commit substantial corporate crime the over representation of male white collar offenders is rational.

Personality and individual differences

Much literature has found varying associations between white collar criminals and particular personality and individual differences. In comparison to their non-criminal colleagues, white collar offenders were found to be involved in more extracurricular activities and rate higher on extroversion, anxiety, depression, hedonism, psychopathy, narcissism and conscientiousness measures whilst being less agreeable and having less self-control (Ragatz, Fremouw, & Baker, 2012). These traits have however been demonstrated to be useful in the corporate realm which may provide insight into why there is an identified offender profile of white collar criminals (Babiak, 2007; Ragatz et al, 2012). Van Onna et al (2014) in conjunction with Weisurd and Waring (2001) identified four different types of white collar offenders which were separated by their personality and individual differences, these categories included: opportunity takers; opportunity seekers; crisis responders; and stereotypical criminals. The specific makeup of ones personality can influence on the means by which their offending behaviour and criminogenic needs are met.

Motivation to commit white collar crime

Figure 3. Businessman measuring success by increase in money, power or status

Differential association theory

Differential association theory attributes criminal behaviour (as a whole) to the social environment whereby criminal behaviour and the associated attitudes are learnt from peers and whom one associates with (Scarpitti, Nielsen & Miller, 2009). Following Sutherland's (1940) identification of white collar crime, he applied the theory of differential association to determine why these crimes are committed (Piquero, 2012). It is explained that within an organisation, employees learn the skills, attitudes and rationales to engage in illegal practices which is most likely to occur when the benefit exceeds cost or perceived risk (Piquero, Tibbetts & Blankenship, 2005). Although this theory may demonstrate why white collar crime continues, it does not provide a sound explanation of why it initially occurred which eventuated in adapted models providing a better explanation of the causality of white collar crime.

Fear of falling

The fear of falling hypothesis identified by Wheeler (1992) offers one explanation for the motivation to commit white collar crime whereby successful business people engage in illegal activity to maintain their prestige status, the associated power and to avoid financial downfall. In simple terms an individual's fear of losing what they have worked hard for provides a motivational drive to commit white collar crime (Piquero, 2011). Interestingly, literature has demonstrated that white collar criminals are not simply greedy business people who want to attain as much financial gain as possible and rather, they commit crimes to maintain status quo or avoid losses (Wheeler, 1992; Piquero, 2011). Applicability of the fear of falling theory is demonstrated in its ability to be applied to both corporate crime (committed by the organisation) or occupational crime (committed by the individual).

General strain theory

Initially, strain theory attempted to explain the relationship between poor socio-economic status and crime rates which once again excluded the white collar criminal cohort. Despite much criticism it was not until Agnew (1992) developed a revised theory, general strain theory, which could be applied more broadly within society due to removal of the social structural variable. Agnew (1992) identified three factors within general strain theory which cause strain and often result in illegal conduct to reduce the perceived stressors. These include: failure to achieve positive goals; presence of negative stimuli; and potential loss of valued stimuli (Langton & Piquero, 2007). It is demonstrated that the fear of falling theory is complementary in supporting general strain theory whereby stress related to potential loss of valued stimuli such as status, power or money motivates criminal behaviour to reduce negative emotions and outcomes and to promote self preservation. Langton, et al (2007) tested this hypothesis by analysing convicted white collar offenders against the principles of general strain theory and found that individual white collar criminals can be motivated by financial concerns as well as perceived pressure to excel within their professions. The study did not find a conclusive relationship between general strain theory and corporate crime however provides insight into why white collar crime may have initially formulated as an acceptable practice within ones workplace and bridge the identified gap in differential association theory.

Rational-choice framework

Rational-choice theories suggest that crime is committed if the perceived benefits outweigh the perceived cost or losses (Paternoster & Simpson, 1993). It is easy to see how this framework applies to white collar crimes and how it compliments other motivational theories. For example, the rational choice framework can be applied to the fear of falling theory whereby the perceived benefit of engaging in white collar crime outweighs the cost of losing ones successes. In a developmental study Piquero, Exum & Simpson (2005) found that a desire for control can also be integrated with the rational-choice framework and is positively related to corporate crime. This framework provides some explanation as to why a white collar criminal may engage in criminal behaviour initially and can be used in conjunction with other theories to demonstrate a maintenance effect.

Accountability

Social psychology provides ample evidence that individual behaviour changes within a group context, however there appears to be limited research on the effects this may have within the workforce and in regards to corporate crime. The question remains, do individuals perceive less onus of responsibility in a corporate setting and does this effect moral reasoning? Soares (2003) acknowledged the importance of individual accountability however found that it is often not upheld in a corporate law setting identifying a lack of effective deterrence. Van Slyke et al (2013) identified that the corporate realm provides a protective blanket to white collar criminals whereby the decreased chance of getting caught influences accountability and individual application of moral choices. Cikaraa, Jenkins, DuFour & Saxe (2014) demonstrated the power that group association can have over moral behaviour whereby group competitors exhibited neural decrease in their medial prefrontal cortex compared to when they engaged in the same competitive task alone. In conjunction with the abovementioned motivational theories of white collar crime, an identified lack of accountability may increase ones desirability to commit white collar crime. Although the latter findings are not specific to white collar crime, inferences about moral reasoning in group context can still be applied; it would be beneficial to research these findings in a criminal context.

Figure 4. Scales of justice are not even when comparing white collar crime and traditional crime

Justice

Sentencing

Despite white collar crime costing more on a case by case basis than conventional crime, controversy arises when sentencing of white collar criminals occurs (Holtfreter, Van Slyke, Bratton & Gertz, 2008). Should white collar criminals be housed with robbers, rapists and murderers, or will an elite legal counsel mitigate that potential risk? Within white collar crime, corporate and occupational offenders were found to have differences in sentencing whereby occupational offenders served longer sentences and were sentenced more often (Gottschalk & Rundmo, 2014). These findings support the previous claims that a lack of accountability in corporate crime may be a motivating factor to commit white collar crime.

As sentencing can be largely influenced by the jury decision, societal perceptions of white collar crime need to be considered. Holtfreter et al (2008) survey found that Americans agreed that violent crimes were of more seriousness and that harsher penalties should apply to those crimes compared to white collar crime. It was also demonstrated that American citizens did not agree with equal resources being allocated to minimize white collar crime and violent crimes. A potential limitation of this study is that the perplexity of victimisation may be unknown to everyday citizens.

Recidivism

The specific offender profile, including personality traits and demographic may impact on effectiveness of treatment subsequently on recidivism of white collar offenders. Of particular interest is the interaction between anxiety and depression, and increased treatment drop out rates. It is logical to assume that without completion or engagement with treatment to address criminogenic tendencies, recidivism is more likely to occur. In addition to psychopathology, personality has been investigated to predict recidivism. In a study conducted by Listwan, Piquero & Van Voorhis (2010) found that white collar offenders with a neurotic personality type were more likely to be processed by the judicial system and to be repeat offenders.

Prevention

By working somewhat backwards from the motivational theories of why white collar crime may be committed or maintained, preventative measures can be identified. From a differential association theory perspective, increasing corporate values may provide the prosocial environment required to minimise white collar offending. Schatterly (2003) proposed that increasing governance mechanisms within the corporate realm may increase workplace values by providing less opportunity to commit white collar crime. These governance mechanisms included clearer processes and internal procedures, change in organisational structure, clear codes of conduct and performance based rewards. In regards to the rational-choice framework, a cost would need to outweigh the benefit in order for the benefit to be turned down. As demonstrated in Holtfreter et al (2008), society does not conceptualise white collar crime to an appropriate severity despite significant victim impacts. By increasing penalty of white collar offenses, which is somewhat warranted when considering the possible red-collar implications, potential offenders may second think committing the crime; further research would be beneficial in this domain. In relation to the offender profile, it is logical to assume that more rigours psychological aptitude testing may be appropriate to refrain from appointing neurotic individuals to executive positions whereby their reckless lack of control and fear of falling is somewhat mitigated.

Conclusion

This chapter described potential motivational drivers for offenders to commit white collar crime. A clear offender profile was developed which provided insight into potential non compliance with criminogenic treatment interventions thus increasing recidivism despite the wide scale victim impact. Committing white collar crime is not simply about greed and getting to the top, despite common misconception. The fear of falling theory in conjunction with psychopathic, narcissistic and neurotic personality traits demonstrates a need to maintain status quo and avoid loss. Criminal activity is more likely to be committed if the benefit outweighs the cost and that a perceived stressor will be alleviated from the illegal actions. Implications for policy makers and organisational developers were identified however future research is required in this field to demonstrate an evidence based practice approach. To reduce recidivism and decrease victim impact future research should also be directed at a restorative justice approach to white collar crime.

Test your knowledge! 1 Who is more likely to engage in white collar crime? 30 year old Caucasian female 20 year old African American male 50 year old Caucasian male 2 What changes were made from Sutherland's initial definition of white collar crime? White collar crime is only committed by low socio-economic citizens White collar crime incorporates offender and offense type White collar crime is only committed by upper class citizen 3 What is rational-choice framework? The fear of losing one's successes Engaging in criminal activity because the benefit outweighs the cost Engaging in criminal activity because your peers do 4 What are some potential preventative actions to reduce the likelihood of white collar crime? Creating a code of conduct Offering performance based rewards Both answers are correct

See also

• High-risk business motivation (Book chapter, 2015)
• Insider threat motivation (Book chapter, 2014)
• White collar crime (Wikipedia)

References

Babiak P. (2007). From darkness into the light: Psychopathy in industrial and organizational psychology. The psychopath: Theory, research, and practice, 411-428. Mahwah, NJ: Lawrence Erlbaum Associates

Brody, R. G., & Kiehl, K. A. (2010). From white-collar to red-collar crime. Journal of Financial Crime, 17, 351-364. doi: 10.1108/13590791011056318

Brody, R. G., & Perri, F. S. (2016). Fraud detection suicide: the dark side of white-collar crime. Journal of Financial Crime, 23, 786-797. doi: 10.1108/JFC-09-2015-0043

Cikara, M., Jenkins, A. C., Dufour, N., & Saxe, R. (2014). Reduced self-referential neural response during intergroup competition predicts competitor harm. NeuroImage, 96, 36-43. doi: 10.1016/j.neuroimage.2014.03.080

Croall, H. (2001). Understanding white collar crime. Buckingham [England: Open University Press.

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Gottschalk, P., & Rundmo, T. (2014). Crime: The amount and disparity of sentencing – A comparison of corporate and occupational white collar criminals. International Journal of Law, Crime and Justice, 42, 175-187. doi: 10.1016/j.ijlcj.2014.01.002.

Holtfreter, K. (2005). Is occupational fraud “typical” white-collar crime? A comparison of individual and organizational characteristics. Journal of Criminal Justice, 33, 353-365. doi: 10.1016/j.jcrimjus.2005.04.005

Holtfreter, K. (2015). General theory, gender-specific theory, and white-collar crime. Journal of Financial Crime, 22, 422-431. doi: 10.1108/JFC-12-2014-0062

Holtfreter, K., Van Slyke, S., Bratton, J., & Gertz, M. (2008). Public perceptions of white-collar crime and punishment. Journal of Criminal Justice, 36, 50-60. doi: 10.1016/j.jcrimjus.2007.12.006.

Langton, L., & Piquero, N. L. (2007). Can general strain theory explain white-collar crime? A preliminary investigation of the relationship between strain and select white-collar offenses. Journal of Criminal Justice, 35, 1-15. doi:10.1016/j.jcrimjus.2006.11.011

Listwan, S. J., Piquero, N. L., & Van Voorhis, P. (2010). Recidivism among a white-collar sample: Does personality matter?. Australian & New Zealand Journal of Criminology, 43, 156 – 174. doi: 10.1375/acri.43.1.156

Paternoster, R., & Simpson, S. (1993). A rational choice theory of corporate crime. Routine activity and rational choice, 5, 37-56.

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Piquero, N. L, Exum, M., & Simpson, S. S. (2005). Integrating the desire-for-control and rational choice in corporate crime context. Justice Quarterly, 22, 252-280. doi: 10.1080/07418820500089034

Piquero, N. L., Tibbetts, S. G., & Blankenship, M. B. (2005). Examining the role of differential association and techniques of neutralization in explaining corporate crime. Deviant Behavior, 26, 159-188. doi: 10.1080/01639620590881930

Poortinga, E., Lemmen, C., & Jibson, M. D. (2006). A case control study: White-collar defendants compared with defendants charged with nonviolent theft. Journal of the American Academy of Psychiatry and the Law, 34, 82-89.

Ragatz, L. L., Fremouw, W., & Baker, E. (2012). The psychological profile of white-collar offenders: Demographics, criminal thinking, psychopathic traits, and psychopathology. Criminal justice and behavior, 39, 978-997.

Schnatterly, K. (2003). Increasing firm value through detection and prevention of white-collar crime. Strategic Management Journal, 24, 587-614. doi: 10.1002/smj.330

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Van Onna, J. H. R., Van der Geest, V. R., Huisman, W., & Denkers, A. J. M. (2014). Criminal trajectories of white-collar offenders. The Journal of Research in Crime and Delinquency, 51, 759-784. doi: 10.1177/0022427814531489

Van Slyke, S., Benson, M. L., & Cullen, F. T. (2016). The oxford handbook of white-collar crime. Oxford University Press, Incorporated

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External links

• Penalties for white collar crime in Australia (Commonwealth of Australia, 2017)
• Australian news article (The conversation, 2017)
• Commonwealth bank article (The Australian Business Review, 2017)