The impact and measurement of white-collar crime

White-Collar Crime Discussion

White-collar crime differs significantly from street crime. In addition to having varying punishments and penalties, each classification of crime in this case has unique targets. It should, however, be noted that in most cases, both classifications of crime tend to be intentional and well-planned.

Impact of White-Collar Crime

According to Edwin H. Southerland (as cited in Vito, Maahs, and Holmes, 2005, p. 411), a white-collar crime could be defined as "a crime committed by a person of respectability and high social status in the course of his occupation." The perpetrator of white-collar crime could, therefore, be an accountant, professional banker, fund manager, etc. In most cases, white-collar crime is motivated by, amongst other things, financial gain. According to Vito, Maahs, and Holmes (2005, p. 412), "white-collar offenses are as harmful to the public as street crimes."

To individuals, white-collar crimes could lead to financial turmoil, extreme stress, and ill health as a result of emotional turmoil. In the words of Croall (as cited in Davies, Francis, and Greer, 2012, p. 90), fraud and economic harm victims "report feelings such as bitterness and anger, depression, general health problems and loss of work." White-collar crime, when it comes to business, could trigger heavy business losses and a soiled reputation even for the most successful business enterprises. This is more so the case given that businesses have to incur the cost of investigations into allegations or instances of white-collar crime, prosecute perpetrators, compensate victims, and conduct damage control. To the society, white-collar crimes could be even more devastating than other forms of crime (Ferguson, 2010). This according to the author is particularly the case given that "white-collar crime has a far greater reach; both in terms of how long the effects last as well as how many others are affected" (Ferguson, 2010, p. 41). Amongst the masses, the most common health problems suffered by victims, as Ferguson further points out are stress and depression. With many defaulting on mortgages, loans, and other obligations like bills and debts as a result of declining financial capabilities, the society is left off worse than it was at an earlier point. All those who do business with/or depend on victims of white-collar crime are often times left destitute.

Economic Crimes and their National Impact

White-collar crimes come in various formats and designs. These include, but they are not limited to, forgery and counterfeiting, credit card fraud, Ponzi schemes, and bank fraud. One good example of an economic crime that had national impact was the Madoff scam. In this case, Madoff was accused of conceiving, planning, and executing one of the biggest economic scams in history -- in particular, he was charged "with running a $64 billion Ponzi scheme" (DiMarino and Roberson, 2013, p. 26). For many years, Madoff, as DiMarino and Roberson (2013) further point out, paid out profits to existing investors using funds from new clients. He later on "made statements to his employees that his business was a giant Ponzi scheme and that his business had been insolvent for years" (DiMarino and Roberson, 2013, p. 26).

As Ferguson (2010) points out, the Madoff scam had scores of victims, with the ripple effects of the scam spreading far and wide. For instance, as the author in this case further notes, this particular scam had both direct and indirect victims -- for instance, "charities that had invested with Madoff were no longer able to help those who depended on them" (Ferguson, 2010, p. 41). In addition to impacting negatively on stocks, individuals who had entrusted thousands of dollars to Madoff were devastated. The Madoff scam also effectively crushed investor confidence. Those caught up in the entire melee may never garner enough confidence to invest in the financial markets ever again.

Victim Facilitation and how Citizens Can Protect themselves Against Economic and White-Collar Crimes

To begin with, to make a crime easier to commit, a victim is likely to offer some element of cooperation to the perpetrator of fraud. This according to Titus and Gover (2004) could be through establishing initial contact with the offender (i.e. By responding to a "pitch" sent out by a fraudster), providing sufficient personal information to the offender, etc. The victim in this case fails to take the minimum precautions. Some character traits according to Titus and Gover (2004) also help in the facilitation of crime. These according to the authors include sheer carelessness (i.e. failure to conduct due diligence before committing huge sums of money), lack of interest in current events which could prove invaluable in keeping one informed about current white-collar scams, tendency to take uncalculated risks, susceptibility to flattery, etc. Businesses may also facilitate white-collar crime by failure to aggressively vet employees before employment.

When it comes to preventing white-collar crimes, the relevance of encouraging victims of such crimes to speak out and report to the relevant agencies cannot be overstated. In addition to ensuring that perpetrators are immediately nabbed (so that they do not scam others), such a move would help identify active scams and hence sensitize members of the public about the same. There is also need for members of the public to critically scrutinize various engagements (i.e. investment offers) before joining. While at it, it might help to seek expert opinion. Businesses also ought to conduct proper background checks on employees.