ASSAULT WITH A FISCAL WEAPON

The reason we have trouble measuring white collar crime is multifaceted. The first problem is the absence of a shared definition. Despite the ubiquity of Edwin Sutherland’s term, we use it to mean different things. There is a difference between how the general public conceives of white collar crime and how those who study—or prosecute—it do. And there is divergence within the academy, from state to state, and from prosecutor to prosecutor. Criminologists Michael Benson and Sally Simpson note that if the proverbial person on the street were asked to define the expression, “most people would probably say something about men in suits who steal money and don’t go to prison and let it go at that.”19

Ask an expert and they would likely say that fraud is at the heart of most white collar offenses. In plain language, fraud means using deception to obtain another person’s money or property. Criminal fraud comes in many flavors. When a con artist tricks a victim into making a worthless investment, that’s securities fraud. When a CEO helps cook the corporate books, that’s accounting fraud. When a swindler uses the U.S. mail or a private courier like FedEx in connection with their deceptive scheme, that’s mail fraud. The internet or telephone, wire fraud. When an employee arranges by phone to take a hidden kickback from a supplier, that’s honest services wire fraud. When a borrower deliberately exaggerates the value of their assets to obtain a bank loan, that’s bank fraud. Because fraud depends on nonviolent means to steal, it is sometimes called “assault with a fiscal weapon.”20

Instead of looking mainly at the nature of the offense, some advocates prefer to focus on the status of the offender, zeroing in on corporate actors. They would define white collar crime to mean the most dangerous or reckless business activities that harm the public health and welfare. Think environmental damage, occupational safety violations, hazardous waste disasters, campaign finance fraud, bribery of public officials, tax evasion, monopolization.21

Some scholars have largely given up on arriving at a single definition. As retired sociology, criminal justice, and criminology professor David O. Friedrichs recently concluded, the goal of formulating “a single, coherent, and universally accepted and invoked definition of white collar crime is an exercise in futility.”22 Such resignation does not sit well with criminologists like Brian Payne, who worry that no consensus means we cannot detect white collar crime, measure its pervasiveness, or determine with confidence its causes or how best to respond.23

BLUE COLLAR WHITE COLLAR CRIMINALS

Over the years, Edwin Sutherland’s words have lost their sting. Instead of describing criminal behavior of powerful corporations and wealthy white people, “white collar crime” is now a go-to descriptor for even low-level occupational crime, such as a clerk sneaking money from the megastore cash register or a desperate parent committing welfare fraud. A worker with a blue collar job could be charged with a white collar offense. In a study of convictions over two years in seven federal districts, Payne explained, “most offenses described as white-collar were actually ‘committed by those who fall in the middle class of our society.’”24 This finding is borne out by FBI data. In a 2000 report on measuring white collar crime, the FBI revealed that in 1997 and 1999, the median value of property lost through any given white collar crime offense was just $210. In contrast, the mean (mathematical average) was $9.3 million. What this shows us is that while there are tremendous white collar heists, the most commonly charged defendants were involved in small-dollar crimes.25

This is unfortunate. Sutherland deliberately led with status. He emphasized that white collar crime was committed by “a person of respectability and high social status in the course of his occupation.”26 The norm now is to focus exclusively on the end of that sentence, so as to view white collar crimes as class neutral. As law professors Ellen Podgor and Lucian Dervan recently observed, “Over the years, the term has come to mean more than what it encompassed in its roots, that being criminality in the corporate sphere. Today, ‘white collar crime’ is loosely associated with what would be considered non-violent economic crime.”27 Following this trend, some scholars define white collar crime quite broadly as including economically motivated crimes committed on the job. A popular college textbook on white collar crime frames the field in its opening sentence: “Rule breaking in the workplace is common.”28

Of course, petty workplace offenses need addressing, but they should not be priorities at the federal level. Occupational crime, such as when an hourly employee steals from the cash register, hurts the business and can drive up prices.29 It also violates states’ laws, is fairly simple to investigate and prove (as compared to complex corporate fraud), and can better be dealt with that way. Further, an uptick in this sort of offense by a relatively powerless person would better be addressed through private prevention, especially when big business is the victim. In such cases, investing in better hiring practices and employee supervision is preferable to using up government resources after the fact.

DIGGING THROUGH THE DATA

The data we have now, just as in Sutherland’s era, are in a sense “wrong.” They are incomplete. Professors Podgor and Dervan wryly note that the absence of a precise meaning of the term “has not inhibited the Department of Justice from its continual press releases announcing prosecutions of white collar criminality.”30

We all want to know whether white collar enforcement has gone down. Or gone up. For example, one Washington Post article from 2019 said that white collar crime prosecutions were “on track to reach their lowest level since records began.”31 This sounds disturbing, but the truth is that it’s nearly impossible to know if it is accurate. This is not the author’s fault, though. The article referenced a credible report by the very respectable Transactional Records Access Clearinghouse. The TRAC data are gathered, analyzed, and reported by an impressive team at Syracuse University led by statistician and professor Susan Long and investigative journalist David Burnham. They build on information they obtain from ongoing Freedom of Information Act requests made to the Department of Justice. Since 1996, TRAC has operated a public website featuring reports on federal government enforcement, staffing, and spending. As part of this work they create charts and reports on white collar crime trends.32

A key source of information they draw on is the U.S. Attorneys’ Annual Statistical Report, which covers criminal and civil cases brought by the ninety-three U.S. Attorneys’ offices nationwide. We can all access that online. The DOJ published the most recent report in October 2019 for the previous fiscal year.33 Dipping into that, we see that in 2018, federal prosecutors charged 81,888 defendants in 64,222 federal criminal cases total. Of those, 6,547 defendants and 4,592 cases were categorized as white collar crime. That’s about 8 percent of all defendants.34 But without knowing how many people were credibly accused or investigated for such crimes, it’s hard to know if that’s a little or a lot.

Also, it’s difficult to tell if there’s a trend. The DOJ report has been around since 1959. However, the white collar crime category appeared only a few decades ago in 1992. That year, the U.S. Attorneys’ offices charged 59,198 defendants in 35,263 cases.35 But how many were white collar crimes? The 1992 report listed in a detailed narrative section white collar crime cases as including financial institution fraud; official corruption; environmental, health, and safety crimes; money laundering; insurance fraud, health care fraud, and other frauds. Defendants charged with these white collar offenses comprised 5 percent of the total that year. But looking from 1992 to 2018 is like comparing apples to oranges.

Under the white collar crime section of the 2018 report, we see a long alphabetical list of both familiar and obscure felonies. They are: advance fee schemes, fraud against business institutions, antitrust violations, bank fraud and embezzlement, bankruptcy fraud, commodities fraud, computer fraud, consumer fraud, corporate fraud, federal procurement fraud, federal program fraud, health care fraud, insurance fraud, other investment fraud, securities fraud, tax fraud, intellectual property violations, identity theft, aggravated identity theft, mortgage fraud, and a catchall category of “other fraud.”36 Taken together, this is very broad. It sweeps into the definition of white collar crime “blue collar” occupational crime like “fraud against business institutions” and “embezzlement,” for example. Also, other categories like “insurance fraud” capture too much. There’s faking an accident and trying to collect insurance, which I would not deem white collar crime. Then there’s insurance fraud like bilking Medicare out of $205 million, as Judith Negron had done. She was pardoned by President Trump in February 2020—now that I would deem white collar crime.37

The 2018 report’s definition is also too narrow in other respects. Excluded from the white collar section and placed elsewhere in the report are crimes experts would (and indeed the DOJ report once did) consider to be white collar, such as money laundering, bribery of public officials, and bribery of labor union leaders. Instead, those offenses are now listed respectively under “government regulatory offenses,” “official corruption,” and “labor management offenses.” Health and safety violations, including cases brought against corporations that sell dangerous food and drugs to the public, once included under white collar crime back in 1992, had also been moved elsewhere.

Despite some shortcomings, the report for 2018 provides very interesting information. It reveals the reasons why federal prosecutors decided not to file a criminal case or to later drop it. That year, prosecutors declined to pursue or dropped 21,290 criminal matters. Of those, 4,349 were white collar. That’s almost the same number of white collar cases actually filed that year. Think about it. Federal prosecutors pass on pursuing white collar cases half of the time. But, remember, that leaves out things like money laundering and bribery, which is not in that category, so the number could be higher. What about other federal crimes? Of 59,630 non–white collar cases filed that year, 16,941 were immediately or eventually dropped—roughly 30 percent. In short, the odds of getting away with a crime are much higher for those accused of white collar offenses whose cases make it to the U.S. Attorneys’ offices.

One reason the report identified for declining a criminal matter was lack of evidence. That year, prosecutors declined to pursue 13,388 criminal matters due to “insufficient evidence.” Almost a quarter of the federal criminal cases that were abandoned due to insufficient evidence were white collar matters. Another rather broad reason for such declinations was “prioritization of federal resources and interests.” Notably, prosecutors were far more likely to decline white collar cases than others due to this amorphous “prioritization” reason. Of the 2,573 criminal matters let go for not being a priority, 623 were white collar. Are these markers of innocence or just failure to prosecute because there wasn’t enough money in the budget? Or something worse?

Big Dirty Money: The Shocking Injustice and Unseen Cost of White Collar Crime