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While one could speculate endlessly about the dynamics of these offenses and the theoretical underpinnings behind them, it is probably best to say that absent more detailed data and further research, we just do not know. These parameters do, however, strongly suggest that if white-collar crimes are to be successfully included within the confines of the general theory, it may have to bend to accommodate them.
On the issue of collusion, the findings of the Report also appear to raise issues for the general theory. On the one hand, 67.6 percent of the offenders acted alone, with a median loss of $67,000. This would appear to support the general theory’s requirement for a relatively simple, spontaneous act, although the
dollar amount begins to look suspiciously high for a simple, spontaneous act. On the other hand, the 32.4 percent of offenders who acted with one or more accomplices had a median loss of $450,000, almost seven times the level of single offenders.53 What does this tell us from the perspective of the general theory? While sole perpetrators were certainly the clear majority, the size of their haul notwithstanding, those who chose to partner in the offenses walked away with considerably more money. Gottfredson and Hirschi might argue that these persons are insignificant, in numerical terms, and the general theory is therefore capable of addressing white-collar crime comprehensively along with all other crime.
Were one to grant this point to the general theory, it then appears to back into other problems. The aforementioned statistic, 32.4 percent, is still one-third of all offenses cited in the Report, and these cases exhibit characteristics very different from those predicted by the general theory: they are at least somewhat complex, as they require help to consummate; they are therefore not inherently “spontaneous”; and, at a median loss of almost $5000,000, they are lucrative.
The findings set forth in the Report are also supported by a later poll conducted in March 2002 by the ACFE. In this online survey, responding CFEs were asked how many persons were involved in the latest internal fraud inquiry they conducted. The results (see Chapter 3, note 38) indicate that 41 percent were committed by one person and 21 percent by two individuals. Such findings might be argued to be consistent with the tenets of the general theory, which holds that most crime is committed by individuals or, alternatively, by small collections of individuals acting in a largely spontaneous fashion. The remaining 36 percent of frauds (the reported results appear not to have been rounded, thus not totaling 100 percent) appear to be inconsistent with the general theory. These frauds were committed by 3 to more than 10 persons; 9 percent of these frauds involved more than 10 persons.
In fairness to the general theory, one can surmise that at least some of these larger numbers are the reflection of “me too” forms of fraud—one person in a work unit beginning to submit inflated overtime reports and others following suit over time; however, it is equally unlikely that all of these larger fraud incidents are mere copycat violations. While more than 10 people is an awfully large or complex internal fraud, it is probable that a fair number of the reported frauds were complex and involved perhaps three to five persons. Were we to take a hypothetical fraud event involving large numbers of people that would most closely support the predictions of the general theory, there are still theoretical issues to be overcome. Say, for example, we use our earlier example: One person in a work unit submits inflated overtime reports, does not get caught, and next week nine fellow workers follow the example. One might say these were spontaneous events, consistent with the general theory, but even in this benign scenario, how can the issues of the length of the schemes and the financial benefit derived be made consistent with the tenets of the general theory?
THEORIES OF OCCUPATIONAL FRAUD
Likewise, the Report’s findings on the issue of criminal history appear to strain the general theory. As reported 68.8 percent of all offenders had no prior criminal charges or convictions. Only 6.9 percent had a prior criminal record, 2.9 percent had been charged in the past but not convicted, and 21.3 percent had an unknown criminal history.54 Even allowing the unknowns and uncon-victeds to fall into the convicted categories still leaves a significant hurdle for the general theory to overcome. Granted, Gottfredson and Hirschi carve out some portion of white-collar offenders in their exposition of the general theory, but at the same time their overwhelming and consistent depiction of those likely to offend as spontaneous and vicarious in all aspects of their lives seems inconsistent with this white-collar offender profile. They have contended that some white-collar crime is underreported by organizations concerned with embarrassment, and that is certainly true in my professional experience; however, even this argument causes problems for the general theory, since it means that while they predict white-collar offenses will be relatively rare, there are, by their own admission, certainly more of them than make it to the official record.