Hitting the suite spot: sentencing frauds

Publication Date05 Jan 2010
AuthorMichael Levi
SubjectAccounting & finance
Hitting the suite spot: sentencing
Michael Levi
School of Social Sciences, Cardiff University, Cardiff, UK
Purpose – The purpose of this paper is to generate data on sentencing within a framework that
enables clearer understanding of the sentencing policy options.
Design/methodology/approach The approach takes the form of descriptive statistics on sentencing,
and the relationship of this to principles of sentencing and sub-types of fraud/organised crime offenders.
Findings – Fraud cases seldom attract severe sanctions where, as in the case of frauds against the
EU, there are institutional victims and no apparent systemic risk, despite the prevalence and incidence
of such frauds and the high value to offenders.
Originality/value – The paper makes use of data on sentencing fraud that are not readily available,
placed within a framework of the purposes and effects of sanctions on different sorts of fraudster.
Keywords Fraud, Crimes,European Union
Paper type Research paper
Much of the critique of social fairness relates to the relative non-prosecution of elite
individual and corporate crimes compared with crimes by lower class offenders.
Sentencers can punish only those who are prosecuted and convicted. However, there is
also, by virtue of the very public nature of the sentencing process, a concern about
“fairness” which is difficult to analyse in relation to different sorts of offences. There are
also, of course, more philosophical differences related to the question of whether it is
“better” to have retribution for past acts or incapacitation/rehabilitation for future acts.
Whether one’s primary interest is explaining sentencing practices or in normatively
advocating a different approach to sentencing, it is helpful to examine what modest
evidence there is and to relate it to offence seriousness and offender backgrounds.
Frauds are often associated with a social elite category of “white-collar crime” but are
actually committed by a broad range of social types ranging from the poor and
marginalised (social security) through blue-collar petty and “organised” offenders
(cheque, credit card and small-scale insurance frauds) to longer-term swindles by elites
or by professional confidence tricksters (e.g. telemarketers, EU carousel and missing
trader intra-community (MTIC) fraudsters) who may or may not be labelled as
“organised criminals”, and to elites who use their power and/or assumed integrity to
obtain and launder corrupt “donations” in exchange for granting contracts or to defraud
consumers/investors. To “legal realists”, their denotation is of course, defined by laws
which have been subject to pressures for amendment under the banner of
The current issue and full text archive of this journal is available at
The author is grateful for the ESRC Professional Fellowship RES-051-27-0208, under whose
auspices this research was conducted.
Journal of Financial Crime
Vol. 17 No. 1, 2010
pp. 116-132
qEmerald Group Publishing Limited
DOI 10.1108/13590791011009400
“globalisation”: thus, the perils or alleged perils of transnational crimes have made
intermediaries criminally liable for failing to identity clients or report suspected
transactions (Lascoumes and Godefroy, 2002) and the need to “modernise” both
substantive and procedural law to deal with recent forms of crime has led to various
reforms in many countries.
Shapiro (1990) famously suggested that we “collar the crime, not the criminal”, but
there is no need here to review those wider debates. Rather the aim is to explore some
key features of the sentencing of “serious frauds” in a limited comparative context,
concentrating upon the UK and the USA, where more comprehensive data are available
(at least in the English language), to show how the dilemmas referred to above are
played out in the context of their national legal systems, norms and cultures. If this
complicates some ideologically monotonal models of crime control, then this is a
positive contribution to comparative criminology and criminal justice, and it is hoped
that this will stimulate others to develop a comparative approach in a wider range of
countries and types of society than I have been able to cover in this paper.
One reason why people may be interested in fraud sentencing is to test
(or demonstrate) the lenient treatment of “the powerful” (Reiman, 1994). It is not
obvious how we adjudicate between hypotheses that:
(1) There is a bias against prosecuting the powerful.
(2) Inequality is an unintended (and often unseen) product of wider criminal justice
processes such as plea bargaining that are uneven in their application (Katz,
1979): here, provided that we have some empirical baseline, comparative
analysis, insider “whistle-blowing” and changes in prosecutorial conduct over
time, e.g. at times of:
.general “moral panic” about corruption or white-collar crimes; or
.efforts to get rid of elite rivals (in France, Russia and the USA as well as in
the developing world) may help us.
We might also, where possible, take account of those cases pursued by advice and civil
injunctions, in accordance with the future-oriented model positively advocated by
regulation advocates, though it is not obvious how one weights these in terms of
severity in order to assess their fairness. (In countries that use the principle of legality
rather than of opportunity in prosecutions, this raises more complex questions that we
do not have to deal with here.) With these methodological caveats, let us examine
sanctioning processes.
The distinguishing character of fraud is that it is in essence a means of generating
gains to which we are not entitled legally. In some frauds, the harm may be great but
future risks may be small (unless the offenders can commit crimes via nominees or, more
colloquially, via “straw men”). Another source of controversy lies in whether judges (and
indeed “society” and “the” media) have under-valued the seriousness of some or all types
of fraud. Yet another may arise from the social position of the perpetrator – whether
social e
´lite or organised criminal that may also:
.actually have; and/or
.defensibly have an impact on social judgements of culpability and of
harmfulness[1], as well as on judicial perceptions of the impact of conviction
and sentence on offenders.

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