White-Collar Crime: Middle-class Criminals, Middle-class Victims

All kinds of crime including the white-collar crime causes immense damage to individuals and to society. More and more white-collar crimes now spring from middle class educated citizens. Edwin Sutherland used the term ‘White Collar Crime’ in 1939 since he wanted to focus on the more middle-class, professional, and affluent criminal element. The concept was later developed by sociologists. In Sociology, a white‐collar worker is, generally speaking, a middle-class clerical or administrative employee or a professional.

The present article springs from research that we undertook in the context of middle-class white collar criminals targeting middle class victims. Following the ‘Opportunity Perspective’ theory (Benson and Simpson, 2014), we tried to uncover the modus operandi used in this class of criminals against their middle class victims. Opportunity perspective is based on the assumption that all crimes depend on offenders having some sort of opportunity to commit an offense. In our research, we discovered that middle class victims are often soft targets of such criminals since they provide such opportunities abundantly and easily.

The modus operandi of the criminals was quite similar across this class. In this article, we elaborate on the typical communication patterns involved in this modus operandi. We focus on the aspects that absolve the criminals of criminal charges. In the next sections, we describe Engagement-Breach of Trust- Confession as a typical communication cycle used in such crimes. We then explain how oral modes of communication are abused to escape legalities and how the criminal attempts to achieve the status of a savior of the victim.

1. Engagement: At the very first stage, the criminals involve the victim in their talk and actions. This class of criminals typically uses a “first foot in the door” technique. This technique involves making a simple request that middle-class sensitivities are not able to refuse. When a stranger asks for time, for a glass of water, to borrow your pen or newspaper; it can be a way to involve you in a conversation that will eventually lead to a business partnership offer, an invitation to a pyramid scheme, or information about a ‘lucrative’ sale. Similarly when a relative or friend makes a request to invest a small amount, to purchase an insurance with nominal premium, or to sign as a loan guarantor; the victims are more likely to comply.

Many middle-class victims are too polite and too nice to refuse to entertain small requests by complete strangers as well as by friends and relatives; and this is why they are prone to become victims to white-collar crimes.

Further, we discovered that the victims are more likely to comply with the criminal when the criminal evokes victim’s freedom. Here are some examples of phrases used by the criminal to evoke such freedom.

“Of course it’s your money. So the final decision will be yours.”

“You are free to decide. There is no obligation or compulsion in this scheme.”

“You can take all the time you want to think over. There is no rush.”

Similar to a previous research (Guéguen et al, 2015), we found that more victims easily agree to the criminal’s request in the “evoking freedom” condition than in the control condition. In simple terms, the criminals controlled the victims more easily by using phrases such as the ones listed above.

Video-recorded interviews of victims showed that engagement of middle-class victims occurred due to one or more of the following reasons.

i. As mentioned above, middle-class victims find it awkward to reject small requests of strangers or relatives and friends. In an example we describe later in this article, a victim got entangled in a pyramid scheme because the initial cost of engagement was merely ten dollars. Since a friend’s father invited him to the pyramid scheme, he found it very difficult to refuse the invitation.

ii. Middle-class victims tend to follow actions of other victims. In breach of trust cases such as the Pancard Club Scam, it was discovered that recommendation of a friend and relative (who was also a victim) is blindly trusted by middle-class victims. Thus, they simply invest in a scheme for the sole reason that some of their friends and relatives have similarly invested.

iii. It was also noted that middle-class victims base their investment and partnership decision on a vague personal impression of the ‘character’ of the criminal. They look at the educational background, mannerisms, family background of the other party and ignore the obvious read flags that are raised by the details of the scheme. In one example, a victim who was cheated by a criminal builder confessed that she was lured by the builder’s mannerisms. The builder was so polite that he invited her and her husband to see the design layout of the builder’s home and spend considerable time with them explaining features of the design. The victim was so impressed with this show of courtesy that she advanced a handsome amount as a deposit to the builder. She never saw her money again.

2. Breach of Trust: The next stage is a breach of trust or a happening that seems like a relatively minor crime. Once the victim is sufficiently involved (as a partner, investor, or depositor), a ‘breach of trust’ takes place. An action is suddenly and arbitrarily taken without the victim’s permission. The information shocks the victim because it appears to be against the victim’s interest. Here are a few examples that may strike a chord with some readers.

· Concealing information for personal gain

· Defaulting of payment of promised interest or promised share

· Taking business away from the company for personal benefit

· Misrepresenting information for personal gain

3. Confession: When the victim is sizzling with anger and a sense of injustice, the criminal comes with a ‘full disclosure’. He confesses and admits that a breach of trust has taken place. He takes full responsibility. He admits to the wrongdoing. However, he also emphasizes that this was only a matter of convenience. He had no other option open.

When you confront him and argue with him, the criminal again and again says that he is ‘honest and sincere’. His argument is that if he was not honest and sincere, he would have avoided you and would have run away from you. The criminal argues that since he has not run away and since he is still with you, you need to support him and stay with him. He can set the things right and can return your rightful share to you. This tactic is used so that you do not go to the police or take a legal recourse. Thus, most of the middle-class victims avoid going to the law and stay with the victim.

The confessions of a victim typically take a form such as the following:

“I am not denying that I owe you the money. But please trust me. I am not going anywhere. I am facing cash flow problems; and you know that I am a fighter. I will come out of this crisis and will repay you as soon as possible.”

“I would like to pay you your share from the property. But the problem is I am not able to sell the property. You will get your share as soon as the property is sold.”

4. Oral Mode of Communication: If you wish to identify whether your business partner is a potential fraudster, analyse how much of written communication he/she uses. Criminals do not like written mode of communication. Their sms, e-mails are short and cryptic. They prefer face-to-face meetings where they talk a lot. Usually they are fluent talkers who talk rapidly shifting from one detail to another leaving you little time to ponder on or question their ideas. These criminals avoid taking notes and will become jittery if you take notes while they are talking. They will be displeased if you ask them to put something down in writing. “Don’t you trust me? I am not running away anywhere. My word is good enough.”, they will say. Some of them will also assert that “Things can’t be discussed through e-mail or texts. A face-to-face meeting or a phone call is the best to talk things over.”

However, some criminals also keep their talk short cajoling you to reveal your thoughts. This information is then used by the criminals to plan their further actions.

Criminals also force the victim to avoid any written contract by creating a fear of implications for fees, tax and duties. Victims later realise that it is better to pay duties, taxes, and fees on written contracts than trusting the oral promises made by the criminal.

5. Escaping the Law: Middle-class white-collar criminals are smart and play with the definitions of crime. For example, if somebody takes your wallet from your pocket and then informs you about it, that person is not a ‘pickpocket’ in the eyes of law. These criminals commit a crime, confess to the victim about the crime, and plead that they are honest and sincere. Victims typically do not register complaints believing that the criminal will return their money or property in due course. Below is a sample note to exemplify this behavior.

“I wanted to borrow your car for a short ride. However, when I came to your place, I thought you might be taking a nap. I did not want to disturb you. Using my mechanical skills, I unlocked your car without the key and have taken it to Udaipur. I will be back in a few days. Don’t worry. Your car is safe with me. I am sorry for the inconvenience caused. I am leaving this note with your neighbor so that you are not unduly worried.”

If the above sounds rather awkward, consider the following.

“Dear sister, I have to confess that two years ago, I have transferred the property of our father in my name. I am now the sole owner of the property. Please do not misunderstand me. I have done this only as a matter of convenience. In my mind, there is no doubt that both of us are joint owners of the property. Since you are abroad, I will sell the property when I get a good price.

P. S. Since our father is blind, I had to guide him to obtain his signature on the transfer papers.”

We can now clearly see that the first message confesses to theft, while the second confesses to crimes of embezzlement, cheating, breach of trust, breach of contract, and forgery.

However, many victims avoid legal recourse in such situations and patiently wait for the victim to return their stolen property to them. Thus, the criminal acquires the status of savior and the victims turn to be at the mercy of the criminals.

In our research, we found cases where the victims even refused to co-operate with the police who were preparing a case against the criminals. The victims displayed more trust in the criminal than in the police and the legal system. In such cases, the criminal had gained complete trust of the victims and had entirely overpowered them.

When the criminal has completely overpowered the victim, he may drop the garb of friendliness and may begin to avoid communication with the victim. At this stage, the victim may turn to law, although it may be a too late by this time. It is also possible that the criminal has destroyed crucial evidence of the crime by this time. Usually, legal remedies are not available in such situations due to lack of evidence.

In some situations, legal remedies are merely penal and not restitutive. This means that the criminal may be given a police or judicial custody. However, the stolen property is gone forever and the law is unable to return it to its rightful owner.

Case Study: Case of a friendly invitation to MLM scam

The unsuspecting victim (UV) has arrived in Mumbai for a work assignment. He will be spending a night in Mumbai and then will proceed for his next assignment. He spreads the word on Facebook.

As soon as news spreads on Facebook, UV gets a call from one of his FB friends. The FB friend suggests to UV that UV should spend the night at the friend’s place rather than “wasting money” on a hotel room. UV thinks this will be a good opportunity to catch up and accepts the invitation.

When UV arrives at the friend’s place, he gets a warm welcome by the family. The seventy-year old father of his friend is happy to see UV after a long time. The mother offers UV a cold drink and a sumptuous dinner.

During the dinner, UV notices that the talk is handled mainly the friend’s father. Mother and the son are largely quiet during the conversation. The talk soon turns to how the father has benefited from a new business opportunity. UV smells something fishy but has to smile and nod politely. The criminal has laid the trap using the norms of social niceties.

UV is now under pressure. He is at somebody else’s home and has accepted their dinner and hospitality. Further, he has no excuse to get out of the conversation since he is spending the night there.

UV’s friend is stands aloof and does not take any part in the conversation. The mother plays a good host by offering dessert and more drinks.

UV says to himself: “Well, obviously what these people are trying to do is wrong. They are playing nice and familial. I am thus forced to listen to this sales talk. But well, the investment he is asking is very small. He is only asking for ten dollars to register. I will just pay ten dollars and forget the whole thing. Anyway, they have provided me a nice room and board. Ten dollars is a very small price to pay for this comfort.”

What UV does not know is that payment of ten dollars will not be the end but the beginning of his woes. With the payment, UV fills in a registration form where he provides his personal information and his contact details. In near future, he would be contacted and lured into investing at least a thousand dollars.

In a typical MLM (Multi-level marketing, also called a Pyramid scheme) scam, the victim is asked to merely invest a small sum of in the range of $10- 12 as an entry fee. The victim then becomes a business partner. The victim is then asked to enroll 6 more customers who also pay the small entry fee and become business partners. In a complex binary tree structure, for every new customer enrolled, the original investor (in our case, UV) gets a small percentage as commission. Most of the victims get handsome returns in the beginning and decide to invest more in the scam. Typically, middle-class investors are likely to invest an amount in the range of $1000- $5000 in the scam.

The structure of the pyramid is built in such a way that the investor’s branch soon stops receiving new customers. There are scant returns and the investment is lost forever.

We should note here that MLMs and Pyramid schemes are illegal in a number of countries. Since UV is a business partner in the MLM scheme and has enrolled new customers, technically UV is also guilty. In the eyes of the law, UV is also a criminal.

Conclusion

White-collar criminals are often assumed to be wealthy and powerful individuals. In reality, a large number of white-collar crimes are committed by citizens of middle class. The victims as well as the legal system help such crminals to stay away from courts and prisons.

It is also found that middle class crimes use a well-thought pattern or implementation. Such crimes may range from securities fraud to anti-trust violations and from embezzlement to property theft.

The most common factor that makes it possible to commit damaging white-collar crimes is the criminal’s careful study of middle class victim behavior. Using the victim’s polite and ‘socially nice’ behavior, criminals play an orchestrated trapping game that is likely to be largely successful for the criminal. Researchers agree that fraudsters use interpersonal skills, relationships and material artefacts to gain and then breach the trust of private individuals. (Pithouse, 1999)

The most effective strategies for the victims to protect themselves may include reducing communication with strangers, being wary of excessively oral communicators, and reducing social sensitivities that may open doors to such criminals.

About the Author

Anil Pathak is the author of Interact: A Comprehensive Communication textbook.

https://www.amazon.com/Interact-Comprehensive-Communication-Anil-Pathak/dp/1980555923

References

Benson, M. L. Simpson S. S. (2014) Understanding white-collar crime: An opportunity perspective. Taylorfrancis.com

Guéguen, N, Silone, F, David, M, & Pascual, A (2015). The Effect of the “Evoking Freedom” Technique on an Unusual and Disturbing Request. Psychological Reports, 116(3), 936–940. https://doi.org/10.2466/21.PR0.116k31w1

Piquero N L, S Clipper. (2014) Encyclopedia of Criminology and Criminal Justice. Springer

Smith K (2017) White‐Collar Crime- The Wiley‐Blackwell Encyclopedia of Social Theory. Wiley Online Library

Pithouse, A (1999) The social construction of fraud, trust, abuse and the private victim. Qualitative Research in Criminology

Tunley, M, M Button, D Shepherd, and J Secur J (2018) Preventing occupational corruption: utilising situational crime prevention techniques and theory to enhance organisational resilience. Security Journal, 31, 1 : 21–52. https://doi.org/10.1057/s41284-016-0087-5