MONEY MATTERS WITH SHEILA--GUEST AUTHOR P.I. COLLEEN COLLINS

White collar crime is rampant. You never know when you might become a victim. Today's guest knows quite a bit about white collar crime, and she's here to share some of her knowledge with our readers. 

Colleen Collins is a P.I. and award-winning author who writes mystery and romance as well as nonfiction on private investigations. She and her attorney-husband write the blog Guns, Gams and Gumshoes, selected by Booklist Online as a “Web Crush of the Week” during its 2014 Mystery Month. Learn more about Colleen and her  books at her website.

Crafty White-Collar Criminals

During the decade-plus that my husband and I co-owned a private detective agency, we investigated some interesting crimes, including several white-collar crimes that had been carried out by some very crafty criminals. But one particular crime still haunts us. Not because we investigated it; in fact, we didn’t even know about the crime as it was in progress. What haunts us is that the perpetrator of the crime was our client, an attorney we viewed as a friend. Still do, actually, for the simple reason he always treated us kindly. I’ll call him “Mr. A” for the rest of this article.

Former Federal Prosecutor Turns Criminal

Mr. A had been a former federal prosecutor who had returned to private practice as a trial attorney. He was a man widely respected not only for his brilliance in the courtroom and his legal skills, but also for his ethics and good character. He was in his sixties and silver-haired, with an aura of sophistication and a gentle wit. Once at a holiday party at his home, we all gathered in the kitchen, chatting with Mr. A while he cooked a prime rib for our meal and attended to his guests’ needs. I was impressed how he cooked, mixed drinks and charmingly kept up with multiple conversations at once, never missing a beat. He was part Cary Grant, part Wolfgang Puck. On the drive home, my husband and I marveled at Mr. A.’s perfection.

So a year later, when a federal grand jury issued a 29-count indictment accusing Mr. A of conspiracy, wire fraud, money laundering and bankruptcy fraud, my husband and I were stunned. Mr. A, a white-collar criminal? Impossible!

It was not only possible, but true. Let’s pause a moment and discuss white-collar crime.

What Is White-Collar Crime?

The term white-collar crime was first used in 1939 by sociologist Edwin Sutherland, who was more interested in who committed these crimes rather than what had occurred. "White collar crime," he wrote, "[is] crime committed by a person of respectability and high social status in the course of his occupation." It was a profound redefinition in criminal law as Sutherland was emphasizing the status of the accused versus the criminal act or intent.

Types of white-collar crime include embezzlement, bribery, larceny, extortion, fraud and price fixing. In general, the components of the crime include:

~A non-violent, illegal act that principally involves deception, concealment, manipulation, breach of trust, subterfuge or illegal circumvention.

~Enactment by a businessperson or government/public official.

~Evidence achieved by following a “paper trail” that investigators use to prosecute the case.

Unlike Sutherland’s definition of white-collar crime, the U.S. Department of Justice’s formal definition disregards class and economic status. Nevertheless, government prosecutors are more likely to indict the upper-class businessman who works for a major corporation than the middle-class grandmother who buys medications in Canada.

Our Previous White-Collar Crime Investigations

As PIs, my husband and I had investigated several white-collar crimes. Once for a probate attorney who hired us to investigate what had happened to the money that disappeared from a family’s trust fund. In our research at the assessor’s and clerk of recorder’s offices, we learned a certain family member had suddenly been making expensive purchases, from a new home to several new cars. It wasn’t difficult to follow that paper trail and obtain evidence that this person was the culprit.

Another white-collar crime we investigated was for an attorney who wanted us to investigate a man who claimed his ex-wife had gotten all the assets in their divorce. In our investigations, we learned that although the husband and wife had indeed gotten a divorce two years back, they were still living together quite happily in their marital home. In our research of court records, we learned that the “ex” husband had pursued a fast divorce with the full cooperation of his “ex” wife two weeks before he was served with a lawsuit that demanded he pay a hefty judgment to a former business partner. The bogus divorce was the man’s fraudulent attempt to avoid paying that judgment.

But these were small-time white-collar crimes compared to the seemingly perfect Mr. A.

The Personalities of White-Collar Criminals

Of course, Mr. A obviously wasn’t all that perfect. Terry L. Leap, the author of Dishonest Dollars, The Dynamics ofWhite-Collar Crime (Cornell University Press), said that white-collar criminals typically share certain personality traits: They have natural “smarts,” are educated and often have an appetite for risk and committing acts of “destructive dishonesty” that eventually cause serious financial pain and suffering to others. Leap also stated that white-collar criminals are often highly accomplished liars who skillfully distort facts and events as well as craft lies of omission.

I always admired Mr. A’s intellect, but was he destructively dishonest? No, Mr. A, was always kind to people. In fact, he was one of our few clients we could always count on to pay his invoices on time!

Bad Crimes, But Good Criminals?

In the article “White-Collar Criminals: The ‘Kinder, Gentler’ Offender?” lawyer and fraud examiner Frank S. Perri analyzes the myth that white-collar criminals are somehow the “kinder and gentler” offender. This erroneous assumption, claims Perri, is because white-collar crime is classified as a non-violent crime, which he claims isn’t true. According to Perri, research shows that white-collar criminals often display a pattern of criminal thinking that parallels street-level offenders, and that a subgroup of white-collar criminals are willing to resort to violence, namely murder, to prevent their fraud from being detected. In fact, there’s a term for this kind of murder: fraud-detection homicide.

Nevertheless, many people continue to view white-collar criminals as good people. Recently, Michael E. Peppel, the former chairman and chief executive of MCSi, was convicted of conspiracy, money laundering and filing false documents with the Securities and Exchange Commission – his fraudulent activities eventually causing the downfall of his company and his shareholders to lose $18 million. However, the district judge overseeing his case handed down a seven-day sentence because the defendant was just “a remarkably good man.”

The U.S Court of Appeals for the Sixth Circuit in Cincinnati weren’t very happy with the judge for giving Mr. Peppel a “99.9975% reduction” from the 8 to 10 years the federal sentencing guidelines recommended. They have sent Mr. Peppel’s case back to the same judge so she can reconsider a more appropriate sentence.

Meanwhile, Mr. A is in his second year of a six and one-half year sentence in federal prison. I can’t help but imagine that he’s considerate to his fellow inmates, probably listening to their legal issues while he serves food in the mess hall – part Cary Grant, part Capone, and never missing a beat.

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