How modern psychology can help us understand white-collar criminals
| Pages | 61-73 |
| Date | 07 January 2019 |
| DOI | https://doi.org/10.1108/JFC-11-2017-0103 |
| Published date | 07 January 2019 |
| Author | Thomas E. Dearden |
| Subject Matter | Accounting & Finance,Financial risk/company failure,Financial crime |
How modern psychology can help
us understand white-collar
criminals
Thomas E. Dearden
Criminal Justice, High Point University, High Point, North Carolina, USA
Abstract
Purpose –This paper aims to add tothe theoretical discussion of white-collar crime by introducingmodern
psychologicaldecision-making literature and the potential effecton white-collar offending.
Design/methodology/approach –Using a theoreticalapproach, literature on heuristics, innovation and
stress,insight into why white-collar offenders decideto commit crime is posited.
Findings –The heuristics and strategies that people use to assist in decision-making process may
inadvertently promote white-collar crime. For example, stress may inhibit white-collar offenders’thinking,
causing them to discount the risk of committing said offense;individuals may not challenge the success of
carrying out a white-collar offense once it is considered; and generally, people will be more optimistic in
consideringtheir success of not getting caught.
Originality/value –Currently, the study of white-collar crime is discussed largely in the context of
sociological factors. Current psychological theories have considerable explanatory power in understanding
why white-collaroffenders commit their crimes.
Keywords Theory, White-Collar crime, Heuristics, Psychology, Corporate crime
Paper type Conceptual paper
The self-proclaimed “queen of IRS tax fraud”, Rashia Wilson, pleaded guilty to 57
charges related to tax fraud and a weapons violation. Authorities were alerted to her
crimes by her Facebook posting, “IM’A MILLIONAIRE FOR THE RECORD SO IF U
THINK INDICTING ME WILL BE EASY IT WONT I PROMISE U!”With a seventh-
grade education and a learning disability, she defrauded the IRS of millions of dollars
(Silvestrini, 2013).
In March 2009, the 70-year-old Bernard (Bernie) Madoff pleaded guilty to 11 felonies,
having previously run a Ponzi scheme for as many as 30 years. The sum total of estimated
losses is largely unknown but ballpark estimates of the principle and promised returns
approach $65bn (Henriques and Healy, 2009). The costs of Madoff’s crimes also include
emotional and interpersonal damagesdirectly resulting from victims’financial losses (US v.
Bernard L. Madoff, 2009).
White-collar criminals are diverse. From the most sophisticated market manipulations to the
least complex embezzlements, the diversity in offenses may hinder our ability to understand
white-collar offenders. This article seeks to add modern psychological theories to the theoretical
conversation of white-collar offending. By so doing, Criminology will be better equipped to
understand the myriad of psychological and sociological factors that influencewhite-collar crime.
Defining white-collar offending
For this article I will combine the FBI’sdefinition of white-collar crime (US Department of
Justice, 1989) with elementsoffered by Shapiro (1990). White-collar offending will be defined
White-collar
criminals
61
Journalof Financial Crime
Vol.26 No. 1, 2019
pp. 61-73
© Emerald Publishing Limited
1359-0790
DOI 10.1108/JFC-11-2017-0103
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