White collar crime is characterized by devastating financial losses for the victims or entities affected. It occurs in business and government institutions and is perpetrated by groups and individuals in their quest to make money and generate wealth albeit illegally. The Federal Bureau of Investigations has in a nutshell defined it as “Lying, cheating and stealing” so basically the types of crime include fraud, Ponzi schemes, bribery, identity theft, embezzlement and insider trading among others. In most instances this type of crime is perpetrated by or with the support of influential members of the business or government institution (Federal Bureau of Investigations, n.d.). This makes it difficult to unravel this type of crime because the people involved have the capacity to use their connections and networks of similarly powerful friends to stifle investigations into their participation and the crime.
Strain theory has been used to explain the motivation of individuals in the different classes within a society. White collar crime which is predominantly perpetrated by higher class members of the community can be explained by the economic strain theory. This is because the economic strain theory points to motivations of personal gain forcing these higher class individuals to pursue goals which are unattainable to them eventually leading to crime to meet these goals (Agnew, Piquero and Cullen, 2009). These individuals will work to ensure the protection of their gains and advancement of the same so crimes will include as mentioned embezzlement and tax evasion since taxes will be related to losses for such individuals.
Among the most remarkable corporate and individual white collar crimes include the Enron and Bernard Madoff scams respectively. In the case of Enron, the company used gaps in accounting practices, controversial financial reporting and special purpose units. Executives in the company deliberately hid debts worth billions that occurred due to failed deals and apart from this they bribed their way to lucrative deals abroad and manipulated the Texas and California energy markets (Federal Bureau of Investigations, n.d.). In the Bernard Madoff case, the individual created an enormous Ponzi scheme that involved wealthy individuals who invested in his scheme. He eventually made away with an estimated $65 billion (Federal Bureau of Investigations, n.d.)
Agnew, R., Piquero, L.N. & Cullen, T. F. (2009). The General Strain Theory and White-Collar Crime. Springer , New York: Springer New York.
Federal Bureau of Investigations. (n.d.). White Collar Crime. Retrieved from http://www.fbi.gov/about-us/investigate/white_collar