Yousef Danial
Professor Gray
11/25/18
White Collar crime
What is White Collar crime and what is it that makes these crimes special? A White Collar crime is a crime that is well thought out. Though these crimes have victims, these victims are normally on a larger scale and the crimes are non-violent. To understand the motivations behind specific white collar crimes we must first understand the motivations of the offenders. White Collar crime in most cases is an art. Some may not realize it but all around us there are many examples of White Collar crime that happen daily.
To truly understand what White Collar crime is we must first understand what makes these crimes different and the psychology behind it. Today, the most reported crimes in the United States are property crimes. These crimes consist of mainly: larceny, theft, burglary, motor vehicle theft, aggravated assault, and robbery. Many of these crimes are crimes of opportunity which is the biggest differences between ordinary crimes and White Collar crimes. In most cases ordinary criminals have had a low class upbringing which has put them in a bad position for the future. For example, lets say Robert grew up in the projects in a single parent home. He would be more likely to commit a crime and want to commit crime because of his upbringing and situation. Without the support of a two parent and stable household Robert would be more likely commit crimes of opportunity. Residing in a low class area creates a need to survive. This need to survive then creates a perspective of crime. Now this is not the case for all but statistics have shown that upbringing and geographic situation plays a large role in instances of crime.
To continue this example, because of the fact that Robert has a need to survive and no tools to do so properly (due to his environment) he partakes in crimes of opportunity. As stated above the number one reported crimes in the United States are crimes of opportunity. Larceny is defined as “the unlawful taking of personal property with intent to deprive the rightful owner of it permanently”. (Merriam-Webster) Larceny and theft makes up around 60% of all reported crimes in the United States. An example of this crime could be something as simple as stealing an iPhone or tablet. This is a crime of opportunity and not counted as a White Collar crime because there is a single victim and it is not a thought out or long term crime.
Burglary is defined as “the act of breaking and entering a dwelling at night to commit a felony (such as theft)”. (Merriam-Webster) Burglary is a crime that takes some planning and thought but it is not counted as a White Collar crime because it is a crime of opportunity. A Burglary is committing a theft/larceny while trespassing. A robbery on the other hand is defined as “larceny from the person or presence of another by violence or threat”. (Merriam-Webster) This especially is not counted as a White Collar crime because of the nature of the crime by use of force to gain access to a personal belonging. This is a crime of opportunity and normally not a well thought out crime. Now it may seem redundant to explain and define each of these crimes because of how common they are but it is critical to understand the differences. It is important to understand what type of crimes are most commonly reported also. There will always be a difference in statistics of what crimes are reported versus what crimes actually occur. There will also always be discrepancies between what crimes are reported and what crimes actually occur. The Uniform Crime Report (UCR) tries to fill in the gaps so we can understand crime and the nature of crimes better.
These statistics help us understand the large gap not only in reporting but understanding of White Collar crimes. These crimes happen everyday and are right at our front doorstep though we may not realize it. Below we will discuss the many different types of White collar crimes, what sets them apart from ordinary crimes, where they occur, and who are typically the victims of these crimes. White Collar crime can be a very hard crime to directly define due to the many different natures and scales of these crimes. Merriam-Webster defines White Collar crime as “crime that typically involves stealing money from a company and that is done by people who have important positions in the company : crime committed by white-collar workers”. (Merriam-Webster) While this definition is true, it is only part of the fact. Lets discuss specific white collar crimes in relation to this definition.
No matter how simple or intricate a White Collar crime may be, normally the results of said crimes occur on a large scale. The four most common types of White Collar crimes are: Embezzlement, Fraud, Money Laundering, and Tax Evasion. Embezzlement is defined as “to appropriate (something, such as property entrusted to one's care) fraudulently to one's own use”. (Merriam-Webster) One example of embezzlement is the case of Cecile Nhung Campbell an accountant (CPA). Cecile worked for the large automotive company ‘KIA’. It was her job to approve large payments on invoices for the Korean based company. This created an opportunity of a White Collar crime for Cecile and once she saw the opportunity she did take advantage of it. Cecile and her husband were deeply in debt and were living a lavish lifestyle without any possible way to come close to afford it. While this was a bad time for Cecile and her husband, ‘KIA’ on the other hand was doing great. “Kia, though, had never seen better days. Its U.S. sales had soared 47 percent in the prior year, propelling the firm toward the top rank of global auto manufacturers.” (Fraud Magazine).
Cecile was very good at what she did and understood not only the business of accounting but the business that ‘KIA’ did very well. This helped create the opportunity to help Cecile to create her embezzlement scheme. Something that Cecile did everyday on the job was to process United States customs invoices for the taxes accrued for the shipment of these vehicles from Korea to the United States. Cecile would approve these invoices, confirming the amounts to make sure everything was correct. Once these invoices were approved a department in ‘KIA’ would send a check or wire transfer to the specified bank account on the invoice. All this was based on the trust of people like Cecile. As mentioned above ‘KIA’ was in one of its record years of expansion causing security measures to be come a little outdated with little time to catch up to the times. Cecile realized this and decided to discuss the security exploits with her husband to create a fraudulent embezzlement scheme that would eventually become successful.
Cecile got her little brother in on the action to help her, she persuaded him to gain fake business documentation in order to open a bank account. This bank account was linked to their fake United States customs business called “U.S. Customs Service Detail”. Cecile created this name because she knew it would pass through security checks in ‘KIA’s’ finance departments. Her brother gave her all the banking information after the accounts were set up and he did not participate in the rest of her scheme. Cecile’s scheme consisted of using actual old United States Customs invoices that had already been approved and processed, she began by making a copy and changing the dates, bank account information, and payment type. Cecile then approved the fraudulent bill and forwarded it on to the next department, though this bill should have raised many red flags or at least should have been investigated a little deeper it was not. They were successfully transferred the money for the first fraudulent bill.
Once Cecile saw that her scheme was working she did this another two times all while paying off lines of credits that had been maxed out. The fact that the scheme was working gave Cecile and her husband confidence. Cecile decided to quit her job and live off of the $889,000 that was embezzled from ‘KIA’. Shortly thereafter ‘KIA’ was auditing previous invoices and probably would not have caught the phony invoice if it was not for the fact that Cecile used the same amount as previous invoices. This was one red flag. Also the fact that Cecile changed the account location and transfer type was another red flag. This helped the auditors realize what had happened not only once but on three separate occasions. The ‘KIA’ auditors got in touch with their legal team and the authorities to develop a case against Cecile, her husband, and little brother. There should have been multiple tiers of security such as a CTR or currency transaction report from the bank which is a form that reports large transfers that would have caught the unauthorized transfers. But in this case none of the proper forms were filled out which aided in the embezzlement scheme. “All three defendants, for their multiple felonies, drew sentences in California state prison: Cecile, six years and four months; Mel, four years; and Ho, two years and four months.”. (Fraud Magazine)
This was just one example of a White Collar crime an embezzlement scheme. The details of Ceciles crimes show the large differences between ordinary crimes, such as burglary, and White Collar crimes. White Collar crimes are crimes of finesse and thought. In the end there is a lot of White Collar crime that is not caught due to the nature of these crimes. Another thing we must think about is the media coverage of these crimes. White Collar crimes are rarely publicized or talked about by the media. If society was more aware of the different kinds of White Collar crimes that could affect us, we could be more vigilant and ready to defend against these crimes.
White Collar can happen at a corporate level or even a personal level. One example that we have seen on the Old Dominion University campus a few years ago was a fraudulent voter registration campaign. There was a specific group of people on campus that were going around campus campaigning and asking students if they have registered to vote. Normally on college campuses all over the United States there are campaigns to get more students registered to vote in elections no matter how small. This is a very important privilege and there are valid points in campaigning to students but a group of people decided that it was the perfect crime if it was planned right. An ordinary voter registration form has spaces for personal information such as: name, address, social security number, email, date of birth, and citizenship information. Now just think about all of the possibilities with access to this information as a package.
Students are very easy to target in this scheme for many reasons. On campus every semester students are used to seeing these campaigners with signs and forms all the time. Fraudulent campaigners would not stand out or be questioned because they would fit right in even amidst other valid campaigners. Also because of the fact that students are new to voting and registration they would not know any better and assume the forms and campaigners are legitimate. With access to information such as a social security number a White Collar criminal can easily steal that persons identity. Identity theft is defined as “the illegal use of someone else's personal information (such as a Social Security number) especially in order to obtain money or credit”. (Merriam-Webster) Identity theft can take place in many forms and can have many different benefits for a criminal. One benefit could simply be financially taking over a persons assets and accounts. Another possible benefit could be protection from the law, if you were to take over a persons identity that was similar to yours you could easily fit in and gain benefits that you would not have access to with your previous record and accomplishments.
Stealing a students identity can gain the perpetrators access to a students financial aid accounts which can cause many different issues for a student. Identity theft of a student can ruin an entire future. These examples of White Collar crimes may seem very different and at completely different scales but they can all have large affects. White Collar crimes are something that society needs to be aware about. Why is the media not reporting on as many White Collar crimes as ordinary crimes? Simply because of the timeline of events. To get to a conviction for a White Collar crime it takes a very long time. In the case of Cecile it wasn’t even until months later that the auditors figured out what was going on. Then they had to reach out to their legal team and reach out to law enforcement. Then they each individually have to construct their own investigations and gather evidence and comb over a paper trail that could have lasted for years. This all takes a very extended time to even come up with charges for a White Collar criminal. Once charges are brought up for a White Collar criminal it takes time for the trial and case to go back and forth to come to a final conclusion, this whole process normally takes years. This is a large reason for there to be less of a media following. The media can create stories on ordinary crimes because of the (normally) quick nature of the trials and evidence gathering. In the case of White Collar crimes there is normally a lot more that needs to be combed through and investigated in order for a full investigation to truly be complete. A media source is not likely to want to report on stories such as this because it will not seem as interesting or exciting as other news that would be more instantaneous.
Another reason that media may not want to report as many White Collar crimes is because of the nature of these crimes. Normally the victims of these crimes are large corporations. The victims of these crimes are normally not offended against in a violent manner as these are more crimes of finesse. Though these crimes can gain a perpetrator large sums of money the companies are not usually in a bind due to the missing money. The media and individuals that watch may not view these crimes to be necessarily important because it is more of a “big picture” crime rather than an ordinary crime at a more personal level. Though this may be true for many instances of White Collar crime it is not true for all of them.
White Collar crimes can happen anywhere at any time there will always be opportunities for them to occur but with the correct viewpoint and security measures we can limit not only the effect they have on us but the probability that they will occur to us and our businesses. The media must make an effort to report more White Collar crimes that occur because they can have an affect on each and every one of us. Whether we admit it or not we do gain valuable insight in our daily lives from watching the media, they need to be our trusted go to source at times for information such as this. If the media were to report more on White Collar crimes even at a personal level then we as a society would be more vigilant and prepared to defend ourselves against these White Collar crimes that pose a serious risk to us.