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These are interesting times for white-collar crime.
Vietnam's ongoing crackdown on corruption, known as the Furnace of Fiery War, led to soft drink tycoon Tran Qui Thanh being sentenced to eight years in prison in late April for his role in a $40 million fraud scheme, along with his daughters.
A few weeks ago, Vietnamese billionaire property developer Truong My Lan was sentenced to death for a $44 billion fraud that plundered one of the country's largest banks.
Meanwhile, in the United States, Sam Bankman Freed, co-founder of the failed crypto exchange FTX, was sentenced to 25 years in prison for fraud in March.
These cases follow other high-profile ones: In 2022, Elizabeth Holmes was sentenced to 11 years in prison in the US for her role in the Theranos fraud (her sentence was later reduced by two years in July and another four months earlier this month). White-collar crime has also taken place in Europe, including the Wirecard fraud.
But why do the rich commit crimes? After all, unlike the poor, the rich don't need to steal to eat. Many wealthy criminals have enough money to live on for decades.
So the relationship between crime and wealth is complicated. In some cases it's a matter of relative impact: wealthy people don't care about small crimes that get them fined.
If you earn £500 a week, a £300 fine hurts. If you earn £10,000, it barely bothers you. This is why countries like Finland have traffic fines that depend on your income, while the UK has a fine system where if you get too many points you lose your driving licence, inconveniencing rich and poor alike.
When it comes to crimes that carry prison sentences, such as fraud, the wealthy tend to hesitate to commit them because they have more to lose. For wealthy people who live in nice homes and have the best lives, going to prison is an incredibly frightening prospect.
But white-collar crime is different from street crime. Stealing millions of dollars from a large corporation can seem victimless because, unlike mugging or store robbery, it doesn't target individuals. If the perpetrator lacks empathy, this may not feel like a crime at all.
But even for those with a good conscience, many affluent workers find themselves caught in situations where the incentive to fraud is rampant: the temptation is too strong, or the culture and peer pressure too strong, forcing them to commit a crime.
The “Fraud Triangle”, a model devised by Steve Albrecht based on the work of Edwin Sutherland and Donald Cressey, explains this well. The three sides of the triangle are perceived pressure, perceived opportunity and justification for fraud. According to this theory, when these factors come together, people are motivated to commit a crime.
It is important to note that the motive for a crime may stem from the company for which the individual works. After the collapse of the US energy trading company Enron, some in the group claimed they were incentivized to act that way by the company. Similarly, the 2016 Wells Fargo scandal of creating fake accounts, which led to the bank being fined $185 million, was also driven in part by employees trying to meet sales targets.
“Getting the incentive structure wrong can have disastrous consequences for companies,” said Peter van Veen, director of anti-corruption group Transparency International.
Some of us have experienced corporate cultures where we were incentivized to cheat or greed was tolerated or even celebrated. That person isn't necessarily a sociopath, they may just be pressured to achieve their goals without questioning their ethics. Author and journalist Upton Sinclair said, “It's hard to get people to understand something when their pay is based on something they don't understand.”
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What is perhaps hard to grasp is that when wealthy people turn to crimes where these factors are completely unrelated, the benefits are minimal and the drawbacks substantial. Shoplifting is a good example: a 2008 study on shoplifting in the US found that shoplifting was “significantly more prevalent among individuals with personal incomes of over $35,000 and family incomes of over $70,000.”
While $70,000 is far less than the wealth of the ultra-rich, it shows that poverty and desperation are not necessarily the motive for crime. There are plenty of examples of “celebrity shoplifting” and “millionaire shoplifting” that support this. One school of thought suggests that these people commit crimes for fun. The risk-taking behavior that helped them make money and become famous may give them the confidence and belief that they can get away with stealing a $10 lipstick.
This confidence may be bolstered by the knowledge that some wealthy criminals, whether guilty of petty shoplifting or multimillion-dollar fraud, can also afford better lawyers who can secure them lighter sentences.
Reimer is reading.
cityThe work is by 20th century author Clifford D. Simak, whose style has been described as “idyllic science fiction.” French author Michel Houellebecq cityHe called the 1952 episodic novel a “masterpiece” and incorporated its themes into his 2005 novel. The Island's Potential.
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