Organized fraud and organizing frauds
| Author | Michael Levi |
| Published date | 01 November 2008 |
| Date | 01 November 2008 |
| DOI | http://doi.org/10.1177/1748895808096470 |
| Subject Matter | Articles |
389
Organized fraud and organizing frauds:
Unpacking research on networks and organization
MICHAEL LEVI1
University of Cardiff, UK
Abstract
This article examines the settings for frauds in the context of crime
networks, fraud opportunities and of a victim-centric typology of
fraud. It demonstrates the variety of actors, settings and the variable
need for knowing collaboration between co-offenders in frauds of
different types. It explores what is known about those involved in
the organization of some forms of frauds; how they find both
co-offenders and victims in face-to-face and remote settings; and
the barriers to growth of the ‘fraud business’. It concludes that the
globalization of crime is part of contingent relationships between
settings, with their rich and varied opportunities (reflecting patterns
of business, consumer and investment activities), the variable
abilities of would-be perpetrators to recognize and act on those
opportunities (the ‘crime scripts’ perspective), and their interactions
with controls (including, but not restricted to, law enforcement).
Constructs of ‘organized crime’ are becoming less obsessed with the
structure of groups than with what people need from the largely
illicit and largely licit worlds before they commit fraud. Although
some frauds are committed by generic transnational ‘organized
crime’ networks, others are merely mobile small groups or
individuals who can transplant techniques wherever they go; and
others still commit very large one-off frauds without a need for
long-term or any involvement in ‘organized crime’.
Key Words
crime and ethnicity • cross-border crime • identity fraud • organized
crime • policing • white-collar crime
Criminology & Criminal Justice
© 2008 SAGE Publications
(Los Angeles, London, New Delhi and Singapore)
and the British Society of Criminology.
www.sagepublications.com
ISSN 1748–8958; Vol: 8(4): 389–419
DOI: 10.1177/1748895808096470
Introduction
The analytical and research literature on fraud is much sparser than that on
organized crime generally or drugs trafficking in particular.2This partly
reflects its relatively low political valuation as a non-core part of ‘the crime
problem’, which in turn affects research funding. But the relative (in)access-
ibility of fraud networks to outsiders is also a factor, since frauds (and other
crimes) differ in the way that they are open for marketing, and in the inter-
action between the parties. In this article, we examine the settings for
frauds, which both frames and reflects networks, in the context of fraud
opportunities and of a victim-centric typology (Table 1, adapted from Levi
and Burrows, 2008). This demonstrates the variety of actors, settings and
(less clearly) need for collaboration in frauds of different types. In the
process, we explore what is known about those involved in the organiza-
tion of frauds, though the space available (as well as our knowledge) con-
strains the number of fraud types that can be discussed.
Organizing frauds
Two important themes in analysing the extent to which crimes are loosely or
tightly organized are (1) the ease with which willing criminals find the
co-offenders necessary or helpful for any given set of offences; and (2) the
breaking down of the elements of criminal organization into its component
parts (i.e. what is termed ‘script analysis’3by Cornish, 1994; Cornish and
Clarke, 2002). These themes also reflect the tension (in this article and more
generally—see Levi, 2007) between writing about the personnel involved in
frauds (the networks) and what it takes to commit frauds (the scripts). It is
helpful to think of the tasks that need to be performed to commit serious
frauds (and other crimes) and the range of places where they need to be and
are performed. (For all the talk about ‘the’ globalization of ‘crime’, some of
these tasks are as easily accomplished at a local or regional level as they are
transnationally, at least in some jurisdictions.) A higher level ‘script analysis’
of crime for gain might look like the following, with more specific frauds
having their own ‘scripts’ and variable necessities to find co-offenders.
When analysing the dynamics of particular crimes and/or criminal careers,
these procedural elements can be broken down further into much more con-
crete steps and the relationships between their criminal participants analysed
(see e.g. Morselli, 2005; Morselli and Roy, 2008 for some advanced empir-
ical efforts). These steps are not necessarily sequential: for example, we may
see a financial crime4opportunity only when we meet accountants or lawyers
who are able to facilitate it, or we may already have in place all the steps as
part of our ongoing ‘criminal enterprise’. Criminal finance, some or all crim-
inal personnel or the ‘tools of crime’ (from non-transparent companies to
credit cards) may come from or go to another country, constituting ‘trans-
national’ crimes; or else remain within one country, constituting ‘national’
Criminology & Criminal Justice 8(4)390
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