Introduction
The sociologist Edwin Sutherland in 1939, originated the term “white-collar crime.” At first, it denoted illegal activities perpetrated by individuals with power within government and corporate domains. However, since then, its scope has expanded to encompass various illicit endeavors due to technological advancements and societal changes. This essay shall evaluate how white-collar crime evolved during the present century while critically considering its societal implications. The discourse will focus on law enforcement’s challenges in combating this type of criminal activity by examining such crimes’ evolving nature plus their impact on people and communities. Key among our arguments is that altering parameters surrounding white-collar crimes necessitates broader approaches towards solutions—one emphasizing both preventions coupled with long-lasting legal action while also accounting for multiple interconnected factors contributing to these types of offenses.
Defining white-collar crimes
White-collar misconduct pertains to activities that are not violent and which seek financial gain.[1] Essentially, individuals or organizations engage in white-collar crime for monetary benefit. The United Nations Convention against Transnational Organized Crime specifies this kind of non-violent wrongdoing as “offenses carried out during lawful business dealings or commercial transactions that entail a breach of trust and fiduciary obligations.”[2] These offenses include fraudulent activity, embezzlement schemes, and money laundering operations conducted by those entrusted with responsibility within their capacity at an organization – such as officials holding high-ranking positions therein. To be sure, something similar is how the Financial Action Task Force (FATF) describes it — a type of financially-motivated criminal behavior committed by business managers/government functionaries/individuals looking for personal profit while causing harm to others simultaneously.[3]
Individuals occupying positions of authority or influence within politics and business are often associated with this offense. American sociologist Edwin Sutherland called this type of white-collar crime back in 1939, characterizing it as a criminal act perpetrated by an individual who holds high social standing within respectable circles due to their profession. Over time, however, the definition has broadened significantly beyond its conventional meaning encompassing fraud and embezzlement to include various other types like cybercrime, identity theft, and online swindles made possible through technological innovation; environmental offenses; consumer deception tactics; securities malpractices, among others.[4] White-collar crimes can be very sophisticated endeavors that involve intricate planning coupled with illicit behavior, which makes them rather challenging to investigate, let alone prosecute successfully.[5] Perpetrators tend to have financial motivations for committing these acts while leveraging their authoritative perch allowing them significant latitude in perpetrating such activities undetected. The impact could be enormous at times spreading far beyond individuals affected into neighborhoods themselves depending on nature’s scope causing even wider socioeconomic ramifications, especially when insider trading occurs, leading directly to losses sustained by investors damaging public confidence levels regarding stock markets operability itself, thus affecting overall macroeconomic conditions indirectly.
The influence of white-collar crime is overwhelming despite receiving comparatively lighter sentences compared to violent crimes. This is because those with high social standing and a history of honesty are often the perpetrators of such acts. Moreover, the intricacy associated with their schemes and the significant resources required for investigating and prosecuting these offenses makes it increasingly challenging to hold them accountable through legal means.
Conventional Practices of White-Collar Crime
The conventional white-collar criminal activity comprises corrupt practices, cash-cleaning schemes, insider trading maneuvers, embezzlement acts, and deceptive conduct. These misdeeds are commonly carried out for fiscal benefits as wrongdoers leverage their influential or trustworthy roles to accomplish such ends.[6]
Embezzlement is a white-collar crime involving the unauthorized theft or misappropriation of funds. Whether an individual takes money from their company’s account or that belonging to one of its clients, it constitutes embezzlement. Perpetrators often try to conceal this act by leveraging their influential positions since it can be difficult for others to identify and prove such crimes have occurred.
Another white-collar crime is fraud, encompassing many illegal activities such as investment deceit, credit card trickery, and identity theft. Often executed via chicanery or falsification, it can create mammoth aftereffects on individuals and society. As observed in 2008’s global financial crisis, where fraudulent mortgage practices contributed heavily towards an economic nosedive worldwide, fraud can sometimes even lead to severe fiscal catastrophes.
Insider trading, a type of white-collar crime that gives an individual access to privileged information about the stock market can give them an advantageous position in buying or selling stocks. Knowledge obtained secretly through which they base their decisions could be inaccessible by other traders; therefore, it makes for unfair competition if those who possess such knowledge act on it privately. Thus insider trading is considered illegal as some people will have undue advantages over others.
A variation of illicit white-collar activity is bribery, which encompasses providing or accepting funds in exchange for preferential handling or decisions. This could involve disbursing payoffs to higher-ups within either corporate entities or governmental organizations to gain a competitive advantage in commercial enterprise and administrative matters.
The fraudulent activity called “money laundering” conceals unlawful funds by transferring them through approved financial pathways.[7] The process typically involves obscuring monetary origins, often accomplished through utilizing subsidiaries or accounts based in locations outside national borders. Money laundering has been known to be associated with criminal organizations and drug cartels alike.
Modern technology and new types of white-collar crime
The methods employed by individuals involved in white-collar crime have progressed alongside technological advancements. In this modern era, numerous novel misconducts categorized as non-violent offenses and committed by professionals have emerged.[8] These misdeeds predominantly involve electronic gadgets or computing frameworks. Cybercrimes from identity theft and online con games to phishing schemes and credit card fraud are examples of this recent evolution within the domain. The application of digitalization is utilized for a diverse array of offenses, encompassing cybercrime holistically; activities ranging from data thievery through system hacking up to initiating malicious attacks hindering various services while transmitting malware or viruses occur repeatedly today. Identification and prevention prove difficult when it comes to these sorts of criminal acts, which bear enormous impacts on people’s lives at large-scale business levels alike, with an ever-growing frequency nowadays, making it more concerning than ever!
Identity theft is a new breed of criminal activity that has recently emerged in the twenty-first century. This illegal procedure involves obtaining financial details and other sensitive data, like social security numbers.[9] The victims who fall prey to these scams often suffer serious monetary damages and may take years to recover. In this digital era where online frauds are on the rise, phishing scams have become quite prevalent, too; scammers send deceptive emails or texts to procure confidential login credentials and personal information through trickery tactics. Moreover, certain fraudulent schemes involve mock-up websites or virtual markets, which can deceive innocents into revealing their private information or sending over money without realizing it Is all part of a trap set for them by unscrupulous individuals.
A modern manifestation of unlawful activity in white-collar crime is credit card fraud. The perpetrators tend to acquire pertinent data from unsuspecting individuals by means such as skimming devices located at gas stations or ATMs and then proceed with transactions either on virtual platforms or offline using stolen information. Victims face detrimental financial consequences that require a significant amount of time for recuperation.
In the current era, there has been a rise in diverse forms of non-violent illegal activities committed by professionals. This highlights an urgency for institutions and individuals to be watchful in shielding themselves against these offenses. Measures that can be taken include using complex passwords, carefully monitoring credit card statements, and exercising caution when divulging confidential data online. Additionally, companies can enforce cybersecurity measures to guard their systems against cybercrime while training personnel on detecting and evading such illegitimate acts online.
Globalization and White-collar crime
Growing globalization has given white-collar crime additional avenues for expansion. The global financial markets’ interconnection has made it simpler for criminals to shift money across borders and conceal holdings in foreign countries. The absence of international regulation and the disparities in legal systems among different jurisdictions have also produced a challenging regulatory environment to implement.[10] White-collar criminals now find it simpler to participate in unlawful activities like bribery and corruption across borders because of the growth of multinational firms. In order to prevent white-collar crime, new obstacles have been brought about by globalization.
Increasing the Definition Scope of White-Collar Crime
Within the current century, a noticeable alteration has occurred in how offenses committed by individuals of high socioeconomic status are characterized. The rise of technological advancements and globalization has played an instrumental role in its evolution, as have financial markets’ growing significance. One significant modification to this definition was the inclusion of cybercrime – criminal activities that involve computer networks or the internet. Cybercrimes can range from hacking and malware development to identity theft. This update reflects people’s increasing reliance on technology for daily living coupled with more clients performing their transactions online while keeping personal data digitized, thus making it easier for perpetrators to exploit these systems further. As such, online criminals now possess multiple opportunities solely driven by recent developments regarding emerging technologies. In comparison, identifying those behind various types of cybercrime has become even more challenging since individuals worldwide may access most digital platforms available today—thus presenting myriad possibilities concerning anonymity issues associated with tracking down and indicting potential suspects in said crimes.
Introducing ecological malfeasance to white-collar criminality in contemporary times is a commendable development. Acts categorized as environmental crimes comprise activities such as the illegal disposal of hazardous materials, atmospheric contamination, and deforestation. These offenses, which organizations or large groups frequently execute, can have deleterious effects on natural habitats and human well-being alike.[11] The inclusion of eco-crimes into the rubric of white-collar crime underscores how important it has become for society to conserve our environment; awareness continues to be raised about holding those who perpetuate environmentally harmful acts accountably, especially given that climate change ramifications grow ever more apparent with time.
Characterizing “non-violent crimes are done by individuals in authorized or highly respected roles” has an extensive scope. Examples include insider trading, extortion, and manipulation. These reprehensible acts can adversely affect the stability of institutions that uphold democracy, such as stock markets. Including these crimes underlines society’s call for accountability and transparency. It reflects an increasing demand from citizens who are more informed about white-collar embezzlement tactics used by individuals with malicious intentions, eroding public trust in governmental bodies striving towards progress through ethical principles across modern societies.
Regulatory action against white-collar crime
Due to the intricacy and worldwide presence of financial offenses in modern times, there has been an increased significance placed on regulatory responses about white-collar crime. Despite some positive developments, such as enhanced regulations and enforcement efforts within the European Union and the United Kingdom, these types of crimes still need to be solved, particularly when located in offshore nations. The UK’s resolve towards combating white-collar criminal activities has gradually intensified with implementations like the 2010 Bribery Act, which bolstered anti-money laundering laws while simultaneously creating corporate bribery charges.[12] In addition, SFO or Serious Fraud Office was also created in that jurisdiction for handling complex fraud cases’ investigation along with prosecution proceedings. Nevertheless, certain critics have pointed out what they perceive are gaps present under existing corporate liability statutes that could allow businesses accused of criminal acts to avoid potential prosecutions simply by presenting evidence demonstrating adequate procedures put into effect aimed at preventing any financial wrongdoings occurring therein without fear regarding consequences thereof ever resulting from their actions.
The Financial Action Task Force (FATF), an international intergovernmental organization, has a significant role in the fight against financial crimes. It concerns itself with offenses like money laundering and terrorism funding, among other illegal activities.[13] The FATF provides nations worldwide with guidelines for building regulatory frameworks to tackle financial crimes effectively. Its premier achievements are the 40 Recommendations on Money Laundering and the Nine Special Recommendations on Terrorist Financing. These recommendations offer comprehensive measures that countries can implement to improve transparency and thoroughness of approach regarding regulation development aspects while promoting better-international collaborations between relevant stakeholders involved in finance-related matters concerning crime prevention strategies implementation.[14]
To assess the adherence of member nations to the 40 Recommendations and 9 Special Recommendations, peer evaluations are conducted by FATF. Such examinations aid in identifying areas where regulatory frameworks require reinforcement or further compliance with global standards is necessary. Extensive collaborations between FATF and other international institutions such as United Nations, World Bank & International Monetary Fund enable coordinated action toward combating financial crimes. Technical assistance, along with training for countries seeking support in creating regulatory frameworks against financial crimes, is also provided by this organization.
Despite efforts made, white-collar criminals still find sanctuary in offshore nations. These jurisdictions often implement relaxed regulations that impede law enforcement’s ability to apprehend and penalize financial wrongdoers.[15] Furthermore, the absence of communication channels between certain countries and the lack of legal assistance also adds a critical dimension to this problem’s complexity.
Consequences of Expanding the Meaning of White-Collar Crimes
The broadened explanation of white-collar wrongdoing carries extensive and consequential outcomes for both the community at large, as well as the criminal justice framework. By broadening its interpretation to encompass additional forms of illicit activities under international law, significant consequences emerge that affect individuals, organizations, and societies in general. One pivotal effect is adopting specific regulations aimed at preventing financial crimes. Enforcing these guidelines discourages illegal activity while creating a framework for global collaboration among nations. The United Nations Convention against Corruption (UNCAC)[16], which came into force in 2005, represents one legally binding pact dedicated to deterring unlawful practices by investigating and punishing corrupt acts worldwide reciprocally amongst signatory countries through anti-corruption measures such as outlawing bribery or theft, with money laundering being another offense listed on this convention. Through UNCAC, opportunities exist where stolen assets can be returned internationally, along with reciprocal legal support.[17] The Financial Action Task Force has also created globally applicable policies against money laundering alongside terrorism financing. Amongst the actions recommended are enhancing transparency standards is due diligence obligations while promoting inter-country cooperation. Simultaneously, the European Union passed directives aimed at curbing terrorist funding together, combating increasing occurrences & threats pertaining towards Money Laundering, namely AMLD4&AMLD5 respectively, emanating mandatory institutions undertaking customer due diligence besides suspicious transaction reviews.
The implications of identifying and pursuing white-collar crimes have become increasingly intricate. Notably, cybercrime involves offenders in foreign countries, creating a hurdle for prosecution and identification. Instances where colossal corporations with abundant financial resources are involved in environmental crime present obstacles to tracing the culprits and proving their misdeeds; such predicaments share similarities with other forms of criminal activity.
Expanding the purview of white-collar crime has increased the likelihood of conflicts between those in power and their overseers. It is crucial to regulate and enforce these crimes effectively, given that this category now covers a more diverse array of non-violent offenses perpetrated by individuals who hold positions of authority or trust. Nevertheless, regulators and law enforcement agencies may be hesitant to investigate or prosecute people they have personal relationships or professional connections with, ultimately providing an avenue for white-collar criminals to escape repercussions at large, crumbling public faith in institutions further still.
The evolving classification of white-collar crime has divulged a pressing demand for increased public comprehension and instruction. Several forms of this wrongdoing, such as environmental crime and cybercrime, are novel occurrences that the populace may not thoroughly grasp. This renders safeguarding oneself against these illegal activities considerably more difficult while making it arduous for law enforcement to prosecute them effectively due to scarce awareness. Consequently, there is an ever-growing urgency for campaigns intended to enlighten people about the hazards and aftermaths of committing offenses falling under this category.
An important aspect of the expanded definition of white-collar crime is heightened global coordination in identifying and prosecuting these offenses. Many such crimes are now executed across borders, making collaboration between law enforcement agencies from various nations indispensable for effective investigation and sentencing. Although challenging due to dissimilar legal systems and cultural traditions, this cross-border cooperation remains vital for just administration and public trust in institutions.
In light of the widened range of white-collar crime, there is an imperative need for a more forward-thinking approach to prevention. The ramifications of such illicit activities can be far-reaching and long-lasting; thus, eschewing them should take precedence over merely investigating or punishing offenders. While effective regulation and enforcement are vital components in this fight against corporate misdemeanors, it also necessitates that those within organizations make a conscientious effort towards prioritizing ethical behavior and social responsibility with unwavering commitment.[18] In today’s society, where personal gain takes center stage as opposed to societal well-being, adhering to these principles may seem daunting, but ultimately crucial for sustaining our communities’ vitality in perpetuity.
Conclusion
Considering all aspects, it can be inferred that the definition of white-collar crime is constantly being broadened. This has increased awareness regarding a fundamental requirement for a detailed plan to battle this form of unlawful behavior. This covers both prevention and education in addition to investigation and prosecution. White-collar crime presents issues that need cooperation from various parties, including law enforcement organizations, regulators, companies, and people. A comprehensive strategy to combat white-collar crime must include effective legislation and enforcement, international collaboration, and public awareness and education. By placing a high value on these principles, society may foster an atmosphere of openness and responsibility to deter white-collar crime and advance the general welfare. Although white-collar crime presents significant difficulties, it also offers a chance for progress. Society may move toward a more equitable and sustainable future by tackling the underlying causes of white-collar crime and encouraging moral conduct and social responsibility.
Bibliography
Statutes
The United Nations Convention against Transnational Organized Crime
Financial Action Task Force (FATF)
The United Nations Convention against Corruption (UNCAC)
Books
Petter G. Corporate Control of White-Collar Crime: A Bottom-Up Approach to Executive Deviance. Walter de Gruyter GmbH & Co KG, 2022. <<https://books.google.co.ke/books?hl=en&lr=&id=05aDEAAAQBAJ&oi=fnd&pg=PP5&dq= >> Accessed on 28th April 2023.
Petter G. Fraud and corruption: A convenience perspective. Universal-Publishers, 2019.<< https://books.google.co.ke/books?hl=en&lr=&id=WFV1DwAAQBAJ&oi=fnd&pg=PR9&dq >> Accessed on 28th April 2023.
Articles and Online Journals
Adriana B. M. “Money Laundering and the Art Market: Closing the Regulatory Gap.” Seton Hall Legis. J. 45 (2021): 695. << https://heinonline.org/HOL/LandingPage?handle=hein.journals/sethlegj45&div=30&id=&page= >> Accessed on 28th April 2023.
Christopher H. “White-collar cybercrime: Evaluating the redefinition of a criminological artifact.” Journal of Law and Criminal Justice 8.2 (2020): 67-79. <<doi:10.15640/jlcj.v8n2a6 >> Accessed on 28th April 2023.
Emilia I A., and Ameer I. “Money laundering as a transnational business phenomenon: a systematic review and future agenda.” Critical Perspectives on International Business ahead-of-print (2022). <<https://doi.org/10.1108/cpoib-10-2021-0088>> Accessed on 28th April 2023. Cecily R. “An International Economic Law Perspective on the United Nations Convention Against Corruption.” European Yearbook of International Economic Law 2020. Cham: Springer International Publishing, 2021. 83-106.<< https://doi.org/10.1007/8165_2021_70 >> Accessed on 28th April 2023.
Fiona C. and Gibbs C. “Integrated theories of white‐collar and corporate crime.” The Handbook of White‐Collar Crime (2019): 191-207. << https://www.journals.uchicago.edu/doi/abs/10.1086/708047 >>Accessed on 28th April 2023.
Georgios P. “Financial action task force and the fight against money laundering and the financing of terrorism: Quo vadimus?.” Journal of Financial Crime 28.3 (2021): 765-773. << https://doi.org/10.1108/JFC-09-2019-0124 >> Accessed on 28th April 2023.
Ridwan A, Faridah S, and Naefi M. “Misdemeanor of Corruption within the Scope of International Law and the Legal Consequences.” JILS 4 (2019): 299.
Rini W., and Mohammad Kemal M. D. “Construction of Anti-Money Laundering Policy in Indonesia from an International Law.” Baltic Journal of Law & Politics 15.4 (2022): 1179-1199.
Sarkar R. “Corruption and its consequences.” International Development Law: Rule of Law, Human Rights & Global Finance (2020): 355-418. << https://doi.org/10.1007/978-3-030-40071-2_8 >>Accessed on 28th April 2023.
Simon B. “Document fraud: Will your identity be secure in the twenty-first century?.” European Journal on Criminal Policy and Research 26.3 (2020): 379-398.<< https://doi.org/10.1007/s10610-020-09441-8 >> Accessed on 28th April 2023.
Thomas H J., and Kennedy P J.. “Technology’s Influence on White‐Collar Offending, Reporting, and Investigation.” The Handbook of White‐Collar Crime (2019): 449-468. << https://doi.org/10.1002/9781118775004.ch28 >> Accessed on 28th April 2023.
Varun A. “A Criminological Study on White-Collar Crimes.” LexForti Legal J. 2 (2020): 127.<< https://heinonline.org/HOL/LandingPage?handle=hein.journals/lxfrt2&div=14&id=&page= >> Accessed on 28th April 2023.
Wingerde V K., and Nicholas Lord. “The Elusiveness of White‐Collar and Corporate Crime in a Globalized Economy.” The Handbook of White‐Collar Crime (2019): 469-483.<< https://doi.org/10.1002/9781118775004.ch29>> Accessed on 28th April 2023.
[1] Gottschalk Petter. Corporate Control of White-Collar Crime: A Bottom-Up Approach to Executive Deviance. Walter de Gruyter GmbH & Co KG, 2022. << https://books.google.co.ke/books?hl=en&lr=&id=05aDEAAAQBAJ&oi=fnd&pg=PP5&dq= >> Accessed on 28th April 2023.
[2] The United Nations Convention against Transnational Organized Crime
[3] Financial Action Task Force (FATF)
[4] Hamerton Christopher. “White-collar cybercrime: Evaluating the redefinition of a criminological artifact.” Journal of Law and Criminal Justice 8.2 (2020): 67-79. <<doi:10.15640/jlcj.v8n2a6 >> Accessed on 28th April 2023.
[5] Chan, Fiona and Carole Gibbs. “Integrated theories of white‐collar and corporate crime.” The Handbook of White‐Collar Crime (2019): 191-207. << https://www.journals.uchicago.edu/doi/abs/10.1086/708047 >>Accessed on 28th April 2023.
[6] Gottschalk Petter. Fraud and corruption: A convenience perspective. Universal-Publishers, 2019.<< https://books.google.co.ke/books?hl=en&lr=&id=WFV1DwAAQBAJ&oi=fnd&pg=PR9&dq >> Accessed on 28th April 2023.
[7] Baranello Adriana M. “Money Laundering and the Art Market: Closing the Regulatory Gap.” Seton Hall Legis. J. 45 (2021): 695. << https://heinonline.org/HOL/LandingPage?handle=hein.journals/sethlegj45&div=30&id=&page= >> Accessed on 28th April 2023.
[8] Holt Thomas J., and Jay P. Kennedy. “Technology’s Influence on White‐Collar Offending, Reporting, and Investigation.” The Handbook of White‐Collar Crime (2019): 449-468. << https://doi.org/10.1002/9781118775004.ch28 >> Accessed on 28th April 2023.
[9] Baechler Simon. “Document fraud: Will your identity be secure in the twenty-first century?.” European Journal on Criminal Policy and Research 26.3 (2020): 379-398.<< https://doi.org/10.1007/s10610-020-09441-8 >> Accessed on 28th April 2023.
[10] Van Wingerde Karin, and Nicholas Lord. “The Elusiveness of White‐Collar and Corporate Crime in a Globalized Economy.” The Handbook of White‐Collar Crime (2019): 469-483.<< https://doi.org/10.1002/9781118775004.ch29>> Accessed on 28th April 2023.
[11] Alase Varun. “A Criminological Study on White-Collar Crimes.” LexForti Legal J. 2 (2020): 127.<< https://heinonline.org/HOL/LandingPage?handle=hein.journals/lxfrt2&div=14&id=&page= >> Accessed on 28th April 2023.
[12] Sarkar Rumu, and Rumu Sarkar. “Corruption and its consequences.” International Development Law: Rule of Law, Human Rights & Global Finance (2020): 355-418. << https://doi.org/10.1007/978-3-030-40071-2_8 >>Accessed on 28th April 2023.
[13] Pavlidis Georgios. “Financial action task force and the fight against money laundering and the financing of terrorism: Quo radius?.” Journal of Financial Crime 28.3 (2021): 765-773. << https://doi.org/10.1108/JFC-09-2019-0124 >> Accessed on 28th April 2023.
[14] Wulandari, Rini, and Mohammad Kemal Dermawan. “Construction of Anti-Money Laundering Policy in Indonesia from an International Law.” Baltic Journal of Law & Politics 15.4 (2022): 1179-1199.
[15] Isolauri, Emilia A., and Irfan Ameer. “Money laundering as a transnational business phenomenon: a systematic review and future agenda.” Critical Perspectives on International Business ahead-of-print (2022). <<https://doi.org/10.1108/cpoib-10-2021-0088>> Accessed on 28th April 2023.
[16] The United Nations Convention against Corruption (UNCAC)
[17] Rose, Cecily. “An International Economic Law Perspective on the United Nations Convention Against Corruption.” European Yearbook of International Economic Law 2020. Cham: Springer International Publishing, 2021. 83-106.<< https://doi.org/10.1007/8165_2021_70 >> Accessed on 28th April 2023.
[18] Arifin Ridwan, Siti Faridah, and Muhammad Naefi. “Misdemeanor of Corruption within the Scope of International Law and the Legal Consequences.” JILS 4 (2019): 299.
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