People commit white-collar crimes for a few reasons. One primary motivator for committing these offenses is financial gain. Another is the pursuit of influence and power. A white-collar crime is a nonviolent offense that requires a certain degree of privilege on the offender's part.
People commit white-collar crimes primarily for financial gain.
There is more to understanding white-collar crime than learning why people commit these offenses. What separates white-collar crime from other types of criminal activity is the level of privilege necessary to commit a white-collar offense. Certain crimes, like burglary and assault, can be committed by anybody. In contrast, white-collar offenses, like embezzlement and corporate fraud, are only possible when the offender has access to specific financial accounts and confidential information.
Motivations for White-Collar Crimes
The primary motivator for committing white-collar crimes is personal – usually financial – gain. But to really understand why people commit white-collar crimes, you have to understand the psychology that drives them to disregard ethics and break the law. Psychological motivations that drive people to commit white–collar offenses include:
- Disregard for company or industry ethics.
- The sense that the actions are not substantial enough to have serious repercussions.
- The feeling that he will not be caught due to operating anonymously.
- The belief that everybody in the same industry engages in certain behaviors, making them acceptable.
- A feeling of invincibility due to his professional success.
- The sense that there is a moral justification for his actions, such as seeing them as a legitimate punishment for what he believes to be unethical actions on the victim’s part.
Types of White-Collar Crimes
White-collar crimes are nonviolent in nature. Although some can seem like victimless crimes at first glance, every white-collar crime actually has a victim. Sometimes, these victims are a company’s shareholders; in other instances, they are the company’s employees or its consumers. When these offenses are committed within governmental agencies and nonprofit organizations, the people served by the agency or organization are the ones who suffer. Sometimes, it is even the government that suffers when an individual commits this type of offense, in turn causing the government’s constituents to feel its effects.
A few specific types of white-collar crime are:
- Tax fraud.
- Price fixing.
- Identity theft.
- Insider trading.
- Securities fraud.
- Personal use of corporate or government funds.
An individual can act alone or he can work with part of a group to commit a white-collar crime. Depending on the offense, an individual convicted of this type of crime can face prison time, probation, fines, restitution, loss of professional licenses or community service.
Who Commits White-Collar Crimes?
Typically, individuals who commit white-collar crimes work in managerial, consulting and contracting positions, hence the term white-collar. Usually, a white-collar offender is an individual with at least a bachelor’s degree and a stable, comfortable salary.
Individuals working in both the public and private sectors commit white-collar crimes. These offenders include lawyers, accountants, corporate vendors, financial advisers, university faculty and even members of the clergy.
High-Profile White-Collar Crimes
An easy way to understand white-collar crimes is to take a look at a few high-profile examples of such crimes. Cases that have made national and international headlines include:
- The Enron scandal.
- The Madoff investment scandal.
- Martha Stewart’s insider trading scandal.
Because of the nature of these types of offenses, they can go undetected for months or even years. In contrast, a crime like a robbery or an act of harassment is usually obvious the moment it happens. There are numerous laws in place at state and federal levels to curb and prevent white-collar crimes, like the Racketeer Influenced and Corrupt Organizations Act (RICO) and the Sarbanes-Oxley Act.