Fraud victimisation of companies: the Cyprus experience
| Date | 01 April 2003 |
| Published date | 01 April 2003 |
| Pages | 184-191 |
| DOI | https://doi.org/10.1108/13590790310808781 |
| Author | Maria Krambia‐Kapardis |
| Subject Matter | Accounting & finance |
Journal of Financial Crime Ð Vol. 10 No. 2
Fraud Victimisation of Companies:
The Cyprus Experience
Maria Krambia-Kapardis
INTRODUCTION
The literature on ®nancial crime is no longer pri-
marily concerned with Sutherland's de®nition
1
of
`white-collar' crime. Many researchers have pro-
posed variations to this particular crime. Some have
concentrated their work on occupational crime,
2
elite and state crime,
3
organisational crime, and ®nan-
cial crime (which is a sub-category of corporate
crime
4
). Others have specialised even further in
public sector fraud, on Euro fraud,
5
tax fraud,
6
pen-
sions mis-selling,
7
corruption,
8
consumer oences,
9
pharmaceutical fraud,
10
and environmental crime.
11
Fraud reported in this paper will include a broad
range of oences committed by management,
employees or third party against their employer/
corporation/customer/supplier, involving the taking
of material advantage by deception, ie `obtaining
bene®t by deception and causing another ®nancial
loss'.
12
The frauds concerned involve either breaches
of trust by their employer, by the government, by
one's customers, or even by their insurance company.
As in the UK, in Cyprus fraud does not exist as a
speci®c criminal oence.
As the well-known author on fraud Michael Levi
13
reminds us, fraud has many victims, a factor that
makes it very dicult to identify its cost. Further-
more, as stated by Passas,
14
it is impossible to know
the real extent of the problem of fraud or false
accounts `because there is not a way of assessing the
dark ®gure of such frequently sophisticated and
well-disguised misconduct'.
LITERATURE REVIEW
Fraud has been described by some
15
as an `invisible
crime' and its identifying features are the following
six:
ÐNo Knowledge. The victims are not aware they
have been victimised, hence they do not report
the matter to the police. Croall
16
mentions that
this group of individuals are often victims with-
out knowing it. Other characteristics of this
form of crime are: (a) it is taken to be a normal
activity (ie everyone defrauds the taxman); (b)
there is a blurring eect (ie it is considered OK
to pay a secret commission to secure a contract),
and (c) there may even be a collusion problem
(where the victim is aware that fraud is happening
but because he, too, bene®ts, he does not say
anything).
ÐInadequate Statistics. The police normally provide
the statistics, but they are only interested in the
number of oences, detection or clear-up rate,
but not in the actual cost of the crime. Another
issue regarding this feature is the fact that,
unlike street crime, there is no visible victim (eg
a corpse) so it will not be easily identi®ed as an
oence and, similarly, the police must be satis®ed
that an oence/crime has taken place. There are,
of course, the community-based surveys or
cross-sectional surveys or even case studies that
shed some light on the issue. In Cyprus no such
surveys have been carried out other than the
one reported in this paper.
ÐNo Theory. There is no universal concept of
white-collar crime, or economic crime or fraud.
As mentioned earlier, research into fraud is non-
existent in Cyprus and, in countries where
criminological research is undertaken, the focus
is on such conventional oences as homicide,
robbery and burglary and juvenile delinquency,
thus rendering dicult a satisfactory theory of
fraud aetiology. Also, the contexts in which
fraud occurs cover such a broad spectrum and
add to the diculty of formulating a theory
that accounts for fraud in society, including
fraud victimisation.
ÐNo Research. As stated above, research carried out
is limited because fraud is a sensitive topic for
many. Therefore, the research that is carried out
often relies on whistleblowers (a probably
biased sample of cases), or one who is in contact
with the perpetrator or even someone close to
the perpetrator. This is because conventional
social research methods such as observation,
simulation or analysis of ocial statistics will
not reveal the real picture of fraud. As will be
Page 184
Journal of Financial Crime
Vol.10,No. 2, 2002,pp.184 ±191
#HenryStewart Publications
ISSN 1359-0790
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