White-Collar Crime

• Author: Jeffrey Lehman, Shirelle Phelps

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Financial, economic, or corporate crime, usually involving FRAUD and theft, that is often carried out by sophisticated means. The result is usually economic loss for businesses, investors, and those affected by the actions of the perpetrator.

White-collar crime is a broad term that encompasses many types of nonviolent criminal offenses involving fraud and illegal financial transactions. White-collar crimes include bank fraud, BRIBERY, blackmail, counterfeiting, EMBEZZLEMENT, forgery, insider trading, MONEY LAUNDERING, TAX EVASION, and antitrust violations. Though white-collar crime is a major problem, it is difficult to document the extent of these crimes because the Federal Bureau of Investigation's (FBI) crime statistics collect information on only three categories: fraud, counterfeiting and forgery, and embezzlement. All other white-collar crimes are listed in an "other" category. Nevertheless, law enforcement officials agree that white-collar crime is a major problem.

Sociologist Edwin H. Sutherland coined the term in a speech to the American Sociological Association in 1939, and published the book White-Collar Crime ten years later. Sutherland argued that there were significant differences between crimes such as ROBBERY, BURGLARY, and murder, which he classed as "blue-collar crime," and white-collar crime. Perpetrators of blue-collar crimes were typically street criminals. Their crimes had no link to their occupations and they were typically poor. In contrast, individuals of higher economic and social status committed white-collar crimes and their crimes were linked to their socially respected professions. In addition, Sutherland noted that very few white-collar criminals occupied prison cells. Sutherland argued that white-collar criminals inflicted more harm on U.S. society than burglars and robbers, however, the justice system treated white-collar offenders with more lenience and with less consistency than street criminals.

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White-collar fraud did not begin in the late twentieth century. Embezzlers, counterfeiters, stock swindlers, and con men have practiced their crimes for hundreds of years. Political corruption thrived during the nineteenth century and, for example, tarnished the administration of President ULYSSES S. GRANT. The TEAPOT DOME SCANDAL of the mid-1920s did the same for President Warren G. Harding's administration. Overall, however, there was a lack of...