White Collar Crimes: Reasons for Non-Dealing in Criminal Courts

25 September 2018

The White Collar Crimes refers to the acts that are committed by the people in the course and
being the part of the business, for the purpose to earn the financial gains. The significant
characteristic of the white-collar crimes is that these involve sophisticated systems and a
range of participants at various levels. These are nonviolent crimes; examples of such crimes
are securities fraud, counterfeiting, extortion, forgery, insider trading, embezzlement,
corporate fraud, money laundering, and more (Findlaw Australia, 2018). The name of the
said category of crimes is derived from the types of the individuals involved including the
business managers, fund managers, government executives, and more. Hence, it can be said
that all corporate crimes are white-collar crimes, but not all white-collar crimes are the
corporate crimes. The victims of these criminal activities are the employees, competitors,
consumers, investors, stockholders, and overall public and society as a whole (Healy and
Serafeim, 2017). The essay will explore the various facets of the white-collar crimes, giving
an insight of why such crimes are rarely dealt in the criminal courts. In addition, the essay
will shed light on the fact as to why the white-collar crimes are often referred to as the class
based crimes.
It is significant to note that while the white-collar crimes are often the point of discussions
and the fascination among the individuals and society, because of the nature of people and the
larger sums involved; however the same also become boring after a while because of the
complex procedures and the perpetrators and victims are often unclear. The following
segment explores the various reasons as to why such crimes are not dealt in the courts as the
other criminal crimes.
The first and the foremost reason from the point of legal issues is that white-collar crimes are
always about the context. This means whether the perpetrators knew at the time of the
commitment of the crimes that their actions were illegal. Thus, a prosecutor is required to
read the minds of the accused and link the same with the facts obtained in the proceedings.
The legal term for the existence of the guilty mind to be regarded as the central element of the
most of the crimes is “mens rea.’ This means that a defendant must be conscious of the facts
that make his acts fit the definition of the offense. It is difficult to draw the fine line between
the intentions, because the executives of the companies generally rely on the expert advices
for their decisions (Brickey and Taub, 2017). In addition, at times many crimes occur when
the valid business practices fall beyond the purview of the law and legislations (Cohen,Van
Slyke, Cullen and Benson, 2016). Thus, it is quite complex to establish the existence of the
mens rea in the corporate activities, which is the central element of the criminal activities. For

instance, in the case of worldwide known scandal of that Enron, the management of the entity
had used the mark to market margin approach of valuation (Aven, 2015). The management of
the entity even had the sanction for the same from the U.S. Securities and Exchange
Commission in the year 1992. While the approach was an acceptable one in terms of the
accounting policies, the same was misused by the directors to overstate the earnings of the
entity by overvaluing the energy related outstanding at as at the end of the reporting period.
Till date, the management of any entity are free to choose various assumption and estimates
while designing of the different accounting policies, making the management choices
subjective.
An organisation operates through a range of individuals, and leaders possessing various
technical skills and responsibilities. Thus, the second major reason for the non-dealing of the
white-collar crimes on the criminal courts is that when the activities in the organisation take
place as per the standard norms and the set procedures, it is difficult to establish the real
culprit of the crime. As a result, the prosecution becomes complex when the crimes cover
whole of the organisation. In addition, the complex hierarchal structure also poses the
difficulties to establish the real place and level of organisation where the crime has occurred
(Simpson and Paternoster, 2017). While the top executives defend themselves by stating that
they are not the party of the day to day operations of the entity, and thus are not the parties to
crime; the individuals down the hierarchy chain have the reasons on the lines of lack of
authority and responsibility as their defence. As a result, punishing the senior leaders of the
corporation might lead in the destruction of the corporate identity itself, and can increase the
miseries of the customers, employees, suppliers and such even more. As evident form the
case of financial group ING Holdings, which involved a whopping $45 million, the accused
had fraudulently transferred the amount using the computer logins of few of the earlier
serving staff members. Being the accountant of the entity, she had an access to the necessary
information and the procedures, which aided her in the conspiracy. In addition, despite the
amount involved, she was sentenced only for 15 years where the non-parole period was only
of 7 years (Whigham, 2014).
The third major reason that forms the base for the white-collar crimes not being regarded as
the criminal acts, and not being treated likewise is the level of exercise of control by the
leaders. This means, as in most of the cases the leaders of the entity are the involved, who in
turn are granted by wide organisational powers. As a result, it takes years and years to
discover the existence of crime, and until the time it is revealed, such leaders have already