White collar crimes

White Collar Crimes: An Overview

White collar crimes are criminal behaviors that lack violence and are motivated by money. They are primarily carried out by professionals in industry and government. Edwin Sutherland introduced the concept of “white collar crime” into criminology in 1939, defining it as “a crime committed by a person of respectability and high social status in the course of his work.” Due to the restriction given, the definition of white collar crimes has changed under criminology legislation. A more comprehensive classification was offered, and it was based on the offense type, the offender type, and the organizational culture. The white-collar crimes range from money laundering, fraud, cybercrime, identity theft, Ponzi schemes, embezzlement, copyright infringement and insider trading. These offenses have harmful morally, socially, politically and economically.

The Impact on Organizations

Most cases of white-collar offenses are due to greed and decent and most organizations internationally have to be aware of these crimes and their possibility of taking place. The individuals at the high positions such as financial manager and executives are able to launder money without being noticed. It is necessary for a company to have financial auditing conducted from time to time to check the financial progress of the company and how the finance is being allocated (Croall, 2001). A business can face legal charges when it is reported about white collar offenses, and it should thus be careful and any detection of the offenses, those responsible should be made to take responsibility. People convicted of white collar jobs are locked up for a long time or released with large bails as a way of discouraging those who may be thinking of committing the crime.

The Victims and Impact on Society

Despite the white collar jobs being non-violent, they are still victimless crimes. The businesses are affected largely by losing money, and the operations are affected as they cannot be operated normally, the investors are also affected as they lose part of their investment. The employees are affected as some of them may even be laid down when the company cannot handle the expenses, and the effect is felt even in the families due to losing the breadwinner. The economy of the nation is affected, due to the contribution the business was making to the nation. There is no business which cannot be affected by the non-violent crimes as the crimes are unnoticeable when an organization runs without proper supervision. The citizens also fall prey to the white collar crimes every time through being caught up in Ponzi schemes or illicit plans by various financial advisors. The illicit advisors misguide an unsuspecting individual though telling them to invest large amounts of money a company, promising large profits. Later such people lose all the investment after learning that they were scammed (Friedrichs, 2010).

The Economic Impact

Research on white collar offenses indicates that they cost a nation about 300 to 600 billion dollars annually. These are loses from the citizens and the organizations which have been scammed. The problem is growing larger which creates the need to involve the authority so that they can protect not only the institutions but innocent citizens from being victims of white collar thieves. Studies indicate that business organizations can lose about 5 % of their revenue to fraud annually. It means that for a million dollars earned by a company, 50,000 dollars are taken by the white collar thieves. The effect felt by the government is losing their source of tax revenue. Most of the stolen cash is not reported to the IRS, mostly with money laundering and it gives the government impetus on raising taxes where excess revenue is required.

The Ripple Effect

The white-collar crimes are very tempting considering that the offenders believe that the stolen money will never put a dent on a salary of the CEO. The thieves are not aware that the effects are not only to the CEO but also to the business. After the fraud activities, a company is forced to raise money which is done through increasing the prices of the products and the services provided. The employees are also paid less so that any cash available can be used in taking back to financial stability. The effect on the employees and investors is larger when they cannot pay off loans which make it harder for obtaining credit. Insider trading or stock fraud makes the investors lose faith in the stock market like it happened in the United States in 1980. There are some scandals, for instance, Enron which can take away the retirement accounts of the workers due to the effect the company experiences.

The Challenges of Investigating White Collar Crimes

Though fraud can be suspected. It is hard to determine who committed it since there are no bloody footprints, eyewitnesses, smoking gun or even DNA evidence. Deep investigations involving technological knowhow should be conducted and beginning with people in the financial department, who are aware of how the operations are being conducted all the time. They should be able to explain any empty sales or money transfer without the authorization of the company CEO. The white collar crimes are listed in criminology and punished through imprisonment, probation, community service, fines, and disgorgement. In America, the punishments were made harsher in 2002 after passing the Sarbanes-Oxley Act by the Congress (Ferguson, 2010). The FBI has been given the duty of addressing these crimes through identification of the offense, collecting the annual statistical data, and then categorizing the crime so that the court can determine the type of punishment.

The Elusiveness of White Collar Criminals

The white-collar thieves only leave complex paper trails, or at times, there is no evidence at all which can be traced back to an individual. Those people who commit these types of offenses are smart people, and they carry out their activities very slowly but are always sure that they can hardly be suspected. There are lots of skills used, especially technological know-how, which has assisted these criminals in conducting the theft activities. The crimes are also difficult to solve due to the use of complex technology, which only the thieves are aware of. In addition, cash is transferred to empty companies in accounts overseas, thus making it hard for local police officers to investigate the scandals. It at times requires the involvement of the FBI who have the resources required and the expertise needed in the investigation of white collar offenses (Friedrichs, 2010).

Prevention and Consequences

It is hard to completely do away with white collar crimes, though they can be prevented. Every organization should establish a strong internal check and balances which are necessary for preventing fraud from taking place. A good supervision should begin at the top level with the CEO to the employee. There should be a training program established in companies on how fraud can happen. It will be guidance to the employees to keep checking on their operational areas, and in case of suspecting anything suspicious, the worker should report to higher management. Hotlines should be established throughout the organization which employees should call and report any concerns they have. A company should have ethical standards which guide the moral acts of the staff members. They should be aware that stealing is wrong and when caught, the effects are devastating. And it is possible to avoid them as jail term is long, it destroys the reputation of a person and they can no longer get a job opportunity in the job market, and the court fine is large (Ferguson, 2010).


In conclusion, white collar offenses may be nonviolent, but the effect is just as devastating as the violent crimes. The owner of the company experiences the pain of losing the business as it is left with a financial debt which requires being paid. The company loses its position in the market as it is no longer competitive due to financial instability. Job security is lost as some of the employees have to be laid down since the organization can no longer handle the financial pressure and the remaining ones receive less pay than they used to receive. When the financial theft happens, and those responsible get away with it, it encourages others to commit fraud, an indication of social immorality and spread of vices. White collar jobs are criminal activities, and those responsible end up in jail, losing their job and leaving their families miserable. White collar jobs should thus be stopped due to the harm in society.


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

Ferguson, J. E. (2010). White-collar crime. New York: Chelsea House.

Friedrichs, D. O. (2010). Trusted Criminals: White collar crime in contemporary society. Belmont, CA: Wadsworth Cengage Learning.

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