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Journal of Investigative Psychology and Offender Profiling J. Investig. Psych. Offender Profil. 8: 217–241 (2011) Published online 25 July 2011 in Wiley Online Library (wileyonlinelibrary.com). DOI: 10.1002/jip.140

White‐Collar Criminals: The ‘Kinder, Gentler’ Offender?

FRANK S. PERRI*

Purdue University Calumet, Indiana, USA

Abstract

Even though white‐collar criminals (WCCs) cause financial damage and, at times, emotional and physical harm to individuals, organisations, and consumers, their crimes are viewed as being less harmful than street‐level crimes. Misperceptions that WCCs commit financial crimes because of a temporary moral lapse that represents an ‘out of character’ act for the offender still permeate the criminal justice system and academic venues. Yet, research shows that WCCs may display a pattern of criminal thinking that parallels street‐level offenders coupled with the same behavioural traits that serve as risk factors for offences to occur. Furthermore, the belief that WCCs are non‐violent is misguided, as there is a subgroup of WCCs who are willing to resort to violence, namely homicide, to prevent their fraud schemes from being discovered and revealed. Copyright © 2011 John Wiley & Sons, Ltd.

Key words: fraud; narcissism; psychopathy; homicide; white‐collar crime

INTRODUCTION

White‐collar crime is often devastating for individuals, private, non‐profit, and governmental organisations, yet many deem it to be less serious than other types of crimes. Further, many white‐collar criminals (WCCs) have the potential to reoffend and act violently, yet the perception that WCCs are homogenous, one‐time, non‐violent offenders frequently permeates the academic community, the judicial system; and law enforcement that includes the prosecutors of white‐collar crime. Ongoing scandals in public corporations, such as Enron, WorldCom, and the Bernard Madoff case, raised public awareness of the economic, societal, and personal harm resulting from fraud offences (O’Donnell & Willing, 2003), but the attention given to white‐collar crime still pales in comparison with that given to street‐level crimes. For example, recently, in the Wall Street Journal, James Q. Wilson, a noted scholar on the relationship between public policy and crime who is famous for the phrase ‘broken windows’ suggesting that public order is fragile and if proverbially the first ‘broken window’ is not fixed, soon more windows will be broken, wrote a paper titled, Hard Times, Fewer Crimes (Wilson, 2011).

*Correspondence to: Frank S. Perri, Purdue University Calumet, Indiana, USA. E‐mail: [email protected]

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In this lengthy paper, he comments on the fact that in the US, violent crimes reached a 40‐year low together with property‐related crimes in 2010, and he also comments on non‐ white‐collar crime victimology and punishment (Wilson, 2011). However, it is ironic that white‐collar crime, which is exposed almost daily within this international paper, was never mentioned by Dr Wilson, again supporting the observation that white‐collar crime and its offenders are understudied.

Moreover, every scholar who writes about white collar crime will say that the total financial cost of this kind of crime far exceeds that of street crime; the likelihood of being a victim of white collar crime is far greater than the likelihood of being a victim of a serious street crime; and every bit as devastating to one’s quality of life as street crime. (Friedrichs, 2007)

White‐collar crimes cause substantial social harm by undermining the economy, exacerbating the divide between poverty and wealth, eroding trust, and depriving individuals of time and resources (Ford, 2007). A study researching fraudulent financial reporting, defined as intentional misrepresentation of a corporation’s financial statements or a lack of financial disclosures, found that between 1998 and 2007, the 347 US public corporations studied suffered a cumulative fraud‐induced financial loss of $120bn (COSO, 2010). Moreover, the 2010 Report to the Nations, compiled by the Association of Certified Fraud Examiners, conservatively estimates that fraud cost the global economy $2.9tn in 2009. Public perception and fear of violent crime in the streets has disproportionately fueled

the attention of researchers and criminal justice agencies towards violent crimes, whereas ignoring white‐collar crimes and its offenders (Cullen, Link, & Polazi, 1982; Croall, 2007). Courts, as well as academics, have treated white‐collar crimes less severely and even label such crimes victimless, suggesting that either no one feels the injury or that the injury is substantially more indirect and spread out over a large number of people, as opposed to the direct injury experienced in a violent crime (Wheeler et al., 1988; Gustafson, 2007; Perri, 2010). Consequently, this inaccurate, minimised degree of perceived harm suffered by victims of white‐collar crimes appears insignificant when compared with the harms suffered by victims of street crimes, the largely accepted, conventional construction of crime in the public conscience (Croall, 2007). Moreover, because white‐collar crime victimology is incorrectly assumed to be diluted over many individuals and not concentrated, such as the impact of violent crime on particular person, white‐collar crime victims are often not included in victim surveys (Croall, 2007). Yet, according to psychiatrists, Dr Marilyn Price and Dr Donna Norris of the Harvard

Medical School, white‐collar crime can have as many emotional consequences and can be every bit as devastating to a victim’s quality of life as street‐level crimes (Price & Norris, 2009). However, even taking into account the consequential character of white‐collar crime, it is relatively neglected by criminologist and the behavioural sciences (Croall, 2001; Friedrichs, 2007). Consider the recent Bernard Madoff securities fraud scheme estimated to have cost investors, individuals, profit and charitable organisations $20bn (Rothfeld, 2011). Following the loss of much of his life savings in Madoff’s securities fraud scheme, one man in retirement described feeling a ‘deep depression. . . . I had no desire to live, no prospect of earning a living, no way to pay the bills’ (Price & Norris, 2009, p. 538). As Professor John Poulos of the University of California at Davis School of Law stated in explaining the harm caused by WCCs,

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[T]here is a recognition that the harm they [WCCs] inflict on society and on the victims is every bit as worthy of our attention as street crime. . . . [W]hite collar crime, in terms of the number of its victims and the devastating impact on its victim, ranks right up there among even the most heinous violent street crimes imaginable. (Pleyte, 2003, para.25)

Until recently, the public and the criminal justice system had difficulty in appreciating the enormity of the damage done by these social predators because of the misperception that WCCs represent a homogenous crime‐offender group. The following is a common depiction of a WCC: he or she is a first‐time offender, middle aged, well educated, trusted employee, and considered a good citizen through service works at the office, in the community, or at a charitable organisation (Dorminey, et al., 2010). This individual succumbs to pressures, such as too much personal debt, an addiction problem, or to get an organisation through a difficult economic period, and commits some fraud act that is not within their character. This type of offender has been characterised as an accidental fraud offender (Dorminey, et al. 2010). Although some WCCs are accidental fraud offenders, many do not meet this depiction at all, and WCCs often know how to use the perceived distinction between white‐collar crime and street‐level crime to their advantage to neutralise their criminality. Consider the statement provided by psychologist Dr Robert Hare of the University of British Colombia of a convicted psychopathic WCC addressing the sentencing judge in his case.

I have been sitting in jail now for two months and have experienced living in a cell with a poor ignorant illegal alien, a career criminal, a drug user and smuggler, and a killer … I can tell you without hesitation I am not at all similar. I don’t look the same, talk the same, act the same, or feel the same. (Hare, 1993, p. 122)

The first step to challenging common perceptions of WCCs and their crimes is to debunk misperceptions that surround their perceived criminal profile. The author outlines some of the major misconceptions surrounding WCCs such as challenging the anti‐ psychological explanation of why offenders engage in white‐collar crime and debunking the myth that WCCs commit fraudulent acts that are categorised as ‘out of character’ offences. In addition, a more modern approach to understanding WCCs takes into account the behavioural aspect of these offenders. Specifically, personality traits such as an antisocial personality, narcissism, and psychopathy are presented to illustrate that the same catalysts that may facilitate criminal acts and explain why certain offenders resort to crimes of violence, such as sexual assaults, robberies, arsons, and homicides also apply to WCCs who manifest their aggression in a different form creating victims nonetheless. It is not just the financial and emotional devastation that may befall the victims of

WCCs. To further expose the myth that WCCs are somehow the ‘kinder and gentler’ offender, it is erroneously assumed that because white‐collar crime is classified as a non‐ violent offence, WCCs are also non‐violent by nature. Law‐enforcement agencies have similar misperceptions that fraud offenders are non‐violent and relatively harmless (Brody & Kiehl, 2010). This behavioural extrapolation from a crime classification is not only erroneous but also exposes potential victims to unnecessary risks because of this misperception. A subgroup of WCCs are willing to resort to violence, namely murder, and their motive is to prevent their fraud schemes from being detected and disclosed: hence the name fraud‐detection homicide. Current research and expert opinions offer behavioural explanations that serve as violence‐risk factors for why some WCCs are willing to resort to murder. Lastly, mitigating the risks associated with the misperception of WCCs is

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discussed by examining behavioural tools developed to potentially identify those individuals who may be more apt to resort to fraud as well as by discussing strategies to reduce the risk of being a victim of a violent fraud offender especially for those who investigate WCCs.

MISPERCEPTION: WHITE‐COLLAR CRIMES DO NOT STEM FROM INDIVIDUAL PERSONALITY TRAITS

Since its conception, white‐collar crime has been viewed as a crime independent of behavioural explanations. In 1940, Edwin H. Sutherland coined the term ‘white‐collar crime’ and brought to light its importance as a basis for sociological enquiry illuminating business crimes and crimes of the elite (Sutherland, 1940). Sutherland sought to draw attention to crimes perpetrated by the ‘respectable’ classes of society and to dispel the existing explanations that crime was the province of the lower classes of society. He believed that white‐collar crime could not be explained at the individual level and that research should be at the organisational level (Friedrichs, 2007). According to Sutherland, a flaw of character was not the main cause of WCC activity, rather, it was the situations and relationships within an organisation that created an environment that encouraged white‐collar crime. For the purposes of this paper, the author does not adopt the more narrow profile of

white‐collar offenders that Sutherland referred to decades ago when he indicated that white‐collar crime was the province of those of high social status because current criminological research does not support this sociological position when in fact, offenders from different class stratifications engage in fraud (Weisburd et al., 1991; Weisburd et al., 2001). However, this does not mean that the socio‐economic aspects of an offender are not important. White‐collar crime can be defined in many ways, and it is appropriate to do so (Croall, 2001). In addition to Sutherland’s premise that white‐collar crime is committed by one of respectable or high social status, it can also be characterised as taking place in the course of one’s occupation, as crime that involves deceit or a breach of trust, as non‐ violent crime undertaken for financial gain, as crime that involves a combination of these factors, and simply as a business crime (Hasnas, 2005). A legal definition is adopted to have a standardised working definition encompassing a

large array of frauds such as antitrust violations, securities fraud, occupational fraud, bribery/kickbacks, extortion, trade‐secret thefts, and bank fraud (Brody & Kiehl, 2010). The United States Department of Justice defines white‐collar crime as illegal acts characterised by deceit, concealment, or violation of trust that are not dependent upon the application or threat of force or violence. Individuals and organisations commit these acts to obtain money, property, or services; to avoid the payment or loss of money; or to secure personal or business advantage. The issue of the socio‐economic status of an offender, although important, is not incorporated in the definition of what constitutes a white‐collar crime nor a necessary element for someone to commit a fraudulent act. In addition, the definition encompasses both organisational and individual offenders.

For example, it may include not only more traditional forms of white‐collar crime that take place within an organisation by those who may be perceived to be in a position of trust regardless of their employment title but also may include someone such as a high‐level executive who has the power to commit fraud because of his or her position (Shover & Hochstetler, 2006). Credit card fraud, Internet fraud, and telemarketing fraud are examples

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of individual white‐collar crimes that might be committed by individuals other than corporate executives who may have been the type of offender Sutherland profiled as his proto‐typical WCC because some of these frauds do not take place within an organisational setting, and, practically, some of these frauds did not exist at the time Sutherland introduced the white‐collar crime concept. Thus, it is sufficient to say that WCCs come from different economic and social strata, and their deceptions for financial gain are perpetrated in infinite fraud schemes that may or may not be perpetrated at the organisational level. Although white‐collar crime’s definition has been expanded outside of the

organizational level, Sutherland’s impact on ignoring individual behavioural character- istics is still advocated, and, as a result, the majority of research on white‐collar crime followed Sutherland’s anti‐psychological position. In fact, little is understood about the relationship between individual behavioural traits and white‐collar crime because most criminological research on white‐collar crime does not include personality traits of the offender (Briggs & Sarre, 2010; Listwan, et al., 2010). There has been some research focusing on the psychopathic traits of WCCs, but this area, comparative with street level, violent offenders and their traits, has remained largely unexamined until recently (Ray, 2007). Even the financial and accounting fields, whilst expounding on the need to implement proactive anti‐fraud regulatory strategies, failed to show any interest in the link between behavioural factors that influence WCCs. As Briggs, Copeland, and Haynes (2006) discovered, fewer than 30 papers in the accounting research literature exist on the relationship between fraud and psychology. WCCs themselves have been under explored: indeed, their personalities have been largely ignored (Briggs & Sarre, 2010). However, Ramamoorti (2008) points out, fraud is a human endeavour, and it is

important to understand the psychological factors, including personality that might influence the fraud offender’s behaviour. Although fraud offenders may not manifest their criminality in ways that are easily recognised by the general public such as property or violent crimes, this does not mean that they may not harbour personality traits that facilitates the decision that make them probably see white‐collar crimes as a solution to satisfy a motive (Alalehto, 2003). What is problematic, according to Dr Hare, when WCCs are ignored and understudied is that their fraudulent activities may

reflect a virulent mix of personality traits and behaviors exhibiting a sense of entitlement, a propensity to deceive, cheat, and manipulate, a lack of empathy and remorse and the view that others are merely resources to be exploited—callously and without regret. (Carozza, 2008)

Further stating, these WCCs often are ‘heavily involved in obscenely lucrative scams of every sort where they lead lavish lifestyles while their victims lose their life savings, their dignity, and their health—a financial death penalty’ (Carozza, 2008). There appears to be a movement within the financial and accounting fields to better

understand the behavioural characteristics of individuals who engage in fraud (COSO, 2010). Moreover, the Federal Bureau of Investigation’s (FBI) Behavioral Science Analysis Unit is incorporating behavioural traits of WCCs in developing profiles that assist fraud investigators in making their work more productive (Goldstein, 2011). In addition, researchers are asking questions that go beyond the typical descriptive statistics such as age, race, educational level, gender to describe these offenders. If scholars posit that personality is an important predictor for common forms of crime and deviance, then its application to explaining white‐collar crime seems a logical extension (Listwan et al.,

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2010). WCCs display behavioural traits as diverse as those of street level offenders, possess the same cold, self‐serving ends, and, at times, adopt violent tactics. Current criminological research reveals that WCCs do not represent a homogenous crime group, and there are behavioural explanations to illuminate the individual personality traits of WCCs that have been, until recently, ignored. These individual personality traits may actually serve as fraud offender risk factors. Thus, even though there are different types of fraud offender characteristics, such as socio‐economic distinctions, race, gender, levels of education, WCCs may share similar types of personality traits that facilitate their ability to engage in fraud.

MISPERCEPTION: WHITE‐COLLAR CRIMINALS ARE NOT REPEAT OFFENDERS

White‐collar criminals are often thought to be ‘one‐shot’ criminals, not likely to be processed into the criminal justice system following an initial brush with the law. However, adults convicted of white‐collar crimes are often repeat offenders (Weisburd et al., 2001). Also, according to the US Federal Sentencing Commission, studies have shown that ‘[e]ven though fraud and larceny offenders have lower recidivism rates’ for first‐time offenders, for offenders with a criminal history, ‘the recidivism rates of these offenses exceeds 50 percent’, which is comparable with the recidivism rates for robbery and firearm offenders (Weissmann & Block, 2007, p. 290). Walters and Geyer (2004) examined three samples of convicted offenders: WCCs with only prior white‐collar arrests, WCCs with arrests for street offences, and non‐white‐collar (or street) criminals. They found that ‘white collar offenders do not form a homogenous group with respect to their pattern of offending, level of deviance, attitudes toward crime, or social identity’ (Walters & Geyer, 2004, p. 280). There are WCCs whose criminal deviancy is indistinguishable from non‐WCCs, especially those that are chronic reoffenders (Walters & Geyer, 2004). Moreover, the complexion of WCCs starts to change when there is evidence of a

continuum of fraudulent activities, and they are considered pathological offenders or ‘predators’ (Dorminey et al., 2010). Predatory offenders seek out individuals or organisations where they can quickly establish fraud schemes, are considered better organised, and are better able to conceal their fraud and exploit weaknesses. Even though there are WCCs with repeated arrests, many WCCs do not have prior arrests, and the absence of a record is seen as a distinctive difference between traditional criminals and WCCs (Freiberg, 2000). Using a sample of white‐collar and common offenders convicted in federal courts, Benson and Moore (1992) found that their sample of WCCs did not resemble their street offender counterparts (with the exception of the chronic offenders from each group) because the WCCs had fewer prior arrests. However, ‘first time offender’ is often confused with offending only one time; a lack of a prior record is not synonymous with a lack of prior offending (Freiberg, 2000). For example, Bernard Madoff, the securities fraud offender who was apprehended in New York in 2008 and sentenced to prison for 150 years, can technically be classified as a first‐time offender because this was his first arrest, yet, his fraud extended over many years, and in fact, the extensive and at times collusive planned quality of the fraud is actually an aggravating factor (Freiberg, 2000). Many frauds are a result of months of scheming and are not the result of one fraudulent act on one particular day, which may be more characteristic of a street‐level crime.

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MISPERCEPTION: WHITE‐COLLAR CRIMINAL OFFENCES ARE ‘OUT OF CHARACTER’

Because WCCs are considered first‐time offenders after their first arrest, despite the actual magnitude of their crime(s), their offences are often considered ‘out of character’ (Perri & Lichtenwald, 2007). Forensic psychologist Dr Stanton Samenow cautions against the premise that a crime may be out of character for an offender simply because he or she had no history of prior offences, he or she had an excellent employment history, and he or she appeared to be an upstanding member of the community (Samenow, 2010a). During Samenow’s 40 years of research, evaluation, and treatment of criminals, he has yet to find an individual who did something not within his or her character (Samenow, 2010b). According to Dr Stanton, typically, there is more to the story than appears evident because often, there is a lack of information about the aspects of the person’s behaviour and thought processes, and thinking patterns pre‐dating their offence have long been present, expressing themselves at a moment of opportunity (Samenow, 2010a). In fact, fraudulent acts often become so much a part of a WCC’s character that

offenders, especially those who work in business, do not probably consider their conduct as criminal, further debunking the myth that it was an ‘out of character’ offence (Moohr, 2007). According to one recent study, surveyed WCCs in prison indicated that they should not be in prison because they perceived their own behaviour as non‐criminal (Dhami, 2007). Research confirms that WCCs, like conventional street‐level criminals, legitimise and rationalise their behaviours, reducing their inhibitions. Attempts to excuse their offences have been termed techniques of neutralisation (Sykes & Matza, 1957). Neutralisation paves the way by nullifying internal moral objections, and, regardless of the type of fraud, most offenders seem to seek to justify and/or rationalise their activities. In doing so, WCCs use vocabularies of adjustment (Cressey, 1953) that manufacture rationale and extenuating circumstances and remove the criminality from the act. Commenting on his fraudulent activities, convicted WCC Jay Jones reported that he ‘certainly knew it was nefarious, a little wormy, unethical, make no mistake about that … but criminal … fraud’ (Porter, 2004, p. 53)? As a result of his fraudulent behaviour, at least 4,000 people were left jobless, and investors lost close to a billion dollars when the debt collection business he helped co‐found went bankrupt. White‐collar criminals view fraud as both acceptable and common to overcome

financial difficulties or to make a profit for the organisation. They may commit fraud for personal gain, and then justify their crimes by claiming they did it to advance the interests of the organisation (Blickle et al., 2006). Typical responses on how white‐collar offenders neutralised their crimes included,

There’s no victim in white collar crime…white collar crime isn’t a danger to society… There was no visual damage, no physical damage, no none was hurt. It was mostly a financial matter. (Dhami, 2007, p. 70)

In one study, WCCs claimed they felt justified to commit fraud to save their company, the employee’s jobs, and other businesses that relied on their survival (Willott et al., 2001). Further blurring the lines and facilitating WCCs’ abilities to rationalise their crimes, fraud often is intertwined with legitimate activities, allowing legal and illegal acts to occur contemporaneously. This comingling of legal with illegal acts facilitates the ability to rationalise fraud because of the ability to attach a moral argument to the offence by pointing to higher purposes behind the fraud that pre‐empts an unsavoury explanation such as greed.

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Techniques of neutralisation vary with the type of fraud (Benson, 1985). For example, frauds against large companies or government departments are often rationalised with the excuse ‘they can afford it’. Many WCCs have a misanthropic view of human nature and assume that others are as scheming and dishonest as they are, view their criminal behaviour as simply part of an astute business/financial practice, and view individuals who do not participate as naive. More often than not, white‐collar crimes are not out of character but rather business as usual. Vocabularies of adjustment put forth by convicted fraud offenders serve as a caution about characterising accidental offenders as committing crimes that are a result of a ‘temporary moral lapse’.

WHITE‐COLLAR CRIMINAL PERSONALITY TRAITS

The modern approach to studying white‐collar crime incorporates the criminal’s personality traits as a factor in the decision to commit fraud even though there are legitimate debates on how important personality may be and which specific traits are common amongst WCCs. At first glance, a psychological explanation for fraud would appear simple—greed and dishonesty. Such explanations are, however, overly simplistic given that greed and dishonesty are not deemed criminal in nature. Many in society are aggressively greedy but generally law abiding, and not all dishonest people commit fraud. Behavioural factors might be viewed as a risk factor for fraud to occur but not a comprehensive explanation for it. Yet, what is becoming increasingly clear is that personality traits do impact whether fraud offences occur even though it was widely accepted, for many years, by some scholars that personality traits do not impact an individual’s decision of whether to engage in fraud because fraud was regarded as a collective act born within the complexity of an organisation (Alalehto, 2003). Current research unequivocally suggests that white‐collar offenders can display behavioural clues that are associated with personality traits such as an antisocial personality disposition, narcissism, and psychopathy that are also harboured by street‐level offenders.

ANTISOCIAL PERSONALITY DISORDER

According to the Diagnostic and Statistical Manual of Mental Disorders‐IV, antisocial personality disorder (ASPD) is a pervasive pattern of disregard and violation of the rights of others and a lack in social conscience and conventional morality. The ASPD WCC deceives, exploits, and manipulates others for personal gain, such as money or power (Barnard, 2008). One study found that convicted WCCs exhibited antisocial traits that were ‘impulsive, amoral, uncontrolled, and detached from normal relationships’ (Blum, 1972, p. 49), concluding that WCCs are an unusually antisocial group in terms of their lack of regard for others and the superficial justifications they offer hurting others. WCCs blame their victims for being ignorant or deserving of their fate, minimise the harmful consequences of the fraud, or simply display an arrogant indifference. WCCs also probably believe that it is a ‘dog‐eat‐dog’ world and that everyone is out for himself or herself (DSM‐IV Task Force, 1994). Moreover, WCCs, especially those who are considered predatory, seek out organisa-

tions and individuals to victimise; are pathological liars, adept at lying without feeling uncomfortable; and may exhibit highly refined interpersonal skills, enabling them to

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cajole, excite, and persuade their victims (Barnard, 2008, Dorminey et al., 2010). These WCCs understand the mindset of their victims and are skilled at reading those victims’ verbal and non‐verbal behaviours and adjusting their own behaviours to appear more credible. These WCCs appear to be generous, ‘free‐loving’, and ‘free‐and‐easy’ individuals, but in reality, they are skilled in deception, feel no compassion for the weak they will exploit, and no remorse for the financial destruction they bring upon others (Barnard, 2008, p. 205). As one convicted WCC admitted,

White collar criminals consider your humanity, ethics, and good intentions as a weakness to be exploited in the execution of their crimes … we preyed on your hopes and dreams by feeding you our spins and lies. (Antar, 2009, para.31)

Narcissism

Narcissism has been identified as a fraud offender risk factor (Price & Norris, 2009; Bucy et al., 2008; Blickle et al., 2006). Narcissism is described as a pervasive pattern of grandiosity, a need for admiration, a lack of empathy for others, and a belief that one is superior, unique, and ‘chosen’. Narcissistic individuals tend to have inflated views of their own accomplishments and abilities. Fraud offenders exhibiting narcissistic traits of extreme entitlement may not be deterred from committing fraud because they may not ‘fear being caught or what punishments may come their way’ (Bucy et al., 2008, p. 417). In addition, their narcissism may not allow them to fully appreciate how their actions play themselves out because their sense of entitlement requires a need for gratification, and the use of deception to achieve fraud does not create a moral dilemma for them to resolve (Barnard, 2008). Blickle et al. (2006) found that convicted WCCs had significantly higher rates of narcissism than a group of non‐criminal white‐collar executives. Misappropriation of corporate assets by senior management is linked to a constellation of narcissistic factors, namely extreme ambition to the point of appearing driven (Duffield & Grabosky, 2001). Australian psychologist Grace Duffield describes general attributes of entrepreneurs and

senior management turned WCCs as

extremely ambitious, obsessed with enhancing power and control, having a sense of superiority bordering on narcissism, which is fed by admiration and attention and which encourages a sense of entitlement to special privileges and resources. (Bucy et al., 2008)

Narcissistic personalities tend to usurp special privileges and extra resources that they feel they have an entitlement to, over and above ordinary people. For example, in 2002, the United States Securities and Exchange Commission investigated Tyco’s CEO, Dennis Kozlowski, for spending indiscretions, and he was described as a ‘supreme narcissist who was also highly skilled in accumulating power … whose actions were motivated by a sense of entitlement’ (Bucy et al., 2008, p. 410). Their need for power and control pushes them to the outer limits of ethical behaviour, making them indifferent to conventional rules of conduct and more apt to take risks. These individuals lack the ability to put themselves in the place of others or envision that the consequences of their actions may fall on the shoulders of numerous other people (Ablow, 2008). Ken Lay, CEO of Enron, during his fraud trial ‘appeared arrogant, resentful of the government’s investigation, remained unapologetic and indignant to the end’ (Bucy et al., 2008, p. 410). Another characteristic of narcissistic WCCs is their tendency to surround themselves

with sycophants or organisational conformists who are easily dominated and who are

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basically accomplices to the fraud crime (Sykes, 1994; Bucy et al., 2008). John Friedrich, who defrauded the National Safety Council of Australia, was reported to surround himself with loyal workers (Sykes, 1994). Individuals who harbour unrealistic impressions of their own capability, when reinforced by sycophants, lack a reality check and may probably engage in fraudulent behaviour than more grounded executives (Janis, 1982). Narcissistic WCCs expect unquestioned loyalty and to be given whatever they want regardless of the imposition it places on others, leaving them incredulous, infuriated, and probably respond angrily with criticism when those expectations are not met. Narcissistic entitlement reflects the assumption that those that interfere with their narcissistic sense of preferential treatment can be expected to be attacked in some form (Exline et al., 2004). Australian WCC, Christopher Skase, is reported to have ‘had a ferocious faith in the rightness of whatever he was doing’ and that he was ‘very impatient with criticism’ (Sykes, 1994, p. 306). One senior executive commenting on his boss, convicted Qwest CEO Joseph Nacchio, stated,

[P]eople were just afraid of the man … He created such a culture of fear that Qwest employees thought that it was better to comply with his demands rather than question them or fail to meet them and face his wrath (Bucy et al., 2008).

Psychopathy

Psychopathy may also serve as a fraud offender risk factor (Hare, 1993; Boddy, 2006; Ray, 2007). Not all psychopaths are violent and incarcerated criminals; some are untrustworthy employees, unscrupulous and predatory business associates, and unethical and immoral professionals (Walsh & Hemmens, 2008). However, relative to psychopathic street‐level criminals, little empirical research for psychopathic WCCs is available even though as Dr Hare stated, ‘If I could not study psychopaths in prison, I would go down to the Stock Exchange’ (Steinberger, 2004). Yet, there are indications that the personality structure and propensity for unethical behaviour are similar for psychopathic WCCs and psychopathic non‐WCCs (Hare, 1993; Babiak, 1995). According to Dr Hare, white‐collar psychopaths are ‘prone to being exceedingly manipulative, narcissistic and ruthless’ (Steinberger, 2004). Although psychopathy is not a formal Diagnostic and Statistical Manual of Mental Disorders‐IV diagnosis, psychopathic traits are characterised by those who are callous, lack conscience, have an inability to empathise with others, and show no remorse for their actions when they violate the rights of others. Psychopathy can be distinguished from officially recognised personality disorders on

the basis of its characteristic pattern of interpersonal, affective, and behavioural symptoms (Hare, 1993). According to clinical neuropsychologist and associate professor of Clinical Psychiatry and Clinical Neurology at Northwestern University, Dr Robert Hanlon, psychopathy is a personality disorder that can also be considered a mental disorder, but it is not considered to be as functionally disabling as a more commonly known mental illness such as schizophrenia (Hanlon, 2010). Personality disorders, such as psychopathy, are not comparable with mental illnesses that display psychotic disorder traits where irrational and disorganised thinking can cause an individual to not recognise the seriousness and repercussions of a crime (Hanlon, 2010). Although psychopathy has similarities to ASPD, it should not be confused with ASPD, as not all antisocial individuals are necessarily psychopathic. Nor should it be thought of as synonymous with criminality or violence in general because there are psychopaths who have not engaged in criminal behaviour (Warren, 2009).

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The major traits identified by Hare are noted in Table 1 (Herve & Yuille, 2007). Specifically, Ray (2007) found that the psychopathic traits that drive WCCs intention to

commit fraud are the traits of egocentric, manipulative, exploitative, deceitful, a Machiavellian attitude where the means justify the ends regardless of it criminal nature. The literature further suggests that psychopathic WCCs do not exhibit the same impulsivity or lack in self‐control as other common street‐level offenders but are more calculating and reflective of their actions (Ray, 2007). Blickle et al. (2006) found that convicted corporate WCCs scored high in the conscientiousness factors and in personality literature, conscientiousness refers to the tendency to show self‐discipline, to act dutifully, and to aim for achievement (Burkely, 2010). This may further explain why WCCs who are conscientious have a tendency to neutralise their actions as constituting a crime, especially when they considered the fraud to be for the good of the company. Psychopathic WCCs high in conscientiousness prefer planned, rather than spontaneous

behaviour and are able to effectively control and regulate their impulses by keeping their behaviour in check whilst controlling their destructive impulses and preventing detection (Burkely, 2010). It has been theorised that white‐collar workers are socialised through their upbringing, education, and other environmental influences to be more focused rational actors with the ability to make calculated decisions (Simpson & Piquero, 2002) thus explaining why psychopathic WCCs may be less impulsive than standard psychopathic criminals who commit non‐white‐collar crimes. Moreover, these WCCs exhibit traits of those who repeatedly engage in cruel non‐WCC acts, such as lacking empathy and a general lack of social conscience exhibited by being indifferent to having hurt, mistreated, or stolen from others (Barnard, 2008). For example, according to Dr Hare, British media tycoon, Robert Maxwell, who was found to have stolen from his own company’s pension fund, creating many victims who were elderly, was reported to display exploitative ‘psychopathic tendencies’ (Boddy, 2005, p. 33). Consider affinity fraud offenders. Affinity fraud refers to investment scams that prey

upon members of identifiable groups, such as racial, religious, ethnic, elderly, or professional groups. According to Dr Hare, ‘those who are most adept at perpetrating affinity fraud are psychopathic’ and pretend to be members of an identifiable group … they are able to establish emotional bonds with their victims, even though as psychopaths, they are incapable of forming empathetic attachments with others (Carozza, 2008, p. 42). Affinity WCCs, not distracted by compassion, successfully identify and manipulate victims who are easily persuaded (Barnard, 2008). They often enlist respected community or religious leaders from within the group to spread the word about the scheme by convincing those people that a fraudulent investment is legitimate and worthy of advancing the social and economic interests of the group.

Table 1. Psychopathic personality traits

Interpersonal Affective Lifestyle Antisocial

Superficial charm Remorselessness Impulsivity Poor behaviour controls Grandiosity Shallow affects Stimulation seeking Delinquency Deception/lying Callousness Irresponsible and

lack of realistic goals Criminal versatility

Conning and manipulative

Failure to accept responsibility

Parasitic lifestyle Early behavioural problems

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228 F. S. Perri

These scams exploit the special trust and friendship that exist in groups of people who have something in common. Relying on group trust is often so powerful in overcoming people’s scepticism that the financially sophisticated fall victim to the scam. Vaughn Reeves defrauded thousands of church members of $120m by selling fraudulent securities. Abraham Kennard defrauded over 1,500 churches of $9m. During his trial, where he represented himself, attempting to manipulate the potential religious inclinations of jurors to his benefit, he stated, ‘God is the biggest financial backer you can have and that’s who these people (the victims) put their trust in’ (Reed, 2007, para.61).

WHEN WHITE COLLARS TURN RED

Another misperception that prevails and is reinforced by law enforcement and the criminal justice system is the belief that because white‐collar crime is classified as non‐violent, the offender is assumed to be non‐violent by nature (Perri & Lichtenwald, 2007). These assumptions are repeated with enough regularity, especially in the criminal justice system, that they are accepted as fact. Consider the statement of a US federal judge, ‘White‐collar criminals are not people who are threatening the lives of others; they are not violent people’ (Wheeler et al., 1988, p. 63). Law‐enforcement agencies have similar perceptions that WCCs are non‐violent and relatively harmless (Brody & Kiehl, 2010). The theory examining WCCs becoming violent towards their victims is a phenomenon many scholars and researchers have ignored (Brody & Kiehl, 2010). Yet, current research clearly illustrates that there is a subgroup of WCCs who are willing to resort to murder that is instrumental (planned), to prevent their fraud schemes from being detected and disclosed (Perri & Lichtenwald, 2007; Brody & Kiehl, 2010). Though only committed by a subgroup of WCCs, a tendency towards violence is not

surprising considering many WCCs harbour the same deviant personality traits as conventional street‐level criminals. Although fraud and murder are two distinct crimes, the personality traits of the offenders may be the driving force behind both crimes (Ablow, 2008). The same behavioural traits attributable to some WCCs, such as narcissism and psychopathy, can plausibly be used to analyse violent WCCs given that these same personality traits are used to describe violence risk factors of non‐WCC offenders who murder. Although violent WCCs display narcissistic and psychopathic traits (Perri & Lichtenwald, 2010), these traits are not the cause of violence, rather, they are risk factors that have been empirically linked to violent aggression (Bushman & Baumeister, 1998). Other types of homicides, such as sexual homicides, parricides, contract killings, domestic homicides are counted and studied for behavioural patterns and offender characteristics facilitating statistical analysis (Douglas et al., 1992). Fraud‐detection homicides and violent WCCs who commit the crimes are not monitored, studied, and tracked in the same way, limiting the amount of research to support this paper. However, Table 2 lists numerous fraud‐detection homicide cases supporting the position

that a non‐violent crime classification should not be extrapolated to mean that a WCC is also non‐violent. The motive and the instrumental nature of the numerous murders in Table 2 were derived from judicial opinions reviewing the facts from trial transcripts and ultimately upholding the convictions. In addition prosecutorial theories that were used to establish the fear of fraud detection as the motive for the murder(s) together with the facts assembled by law enforcement which overwhelming illustrated that the murders were not spontaneous, but planned and cold‐blooded.

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Table 2. Fraud‐detection homicide cases perpetrated by white‐collar criminals

White‐collar criminal Type of fraud

Number of victims Method

Type of violence

Source of information

Santé Kimes Mortgage 1 Gunshot Instrumental Kimes (2006) Eric Hanson Credit card 4 Gunshot/bludgeon Instrumental Hanson (2010) Dennis Gaede Credit card 1 Gunshot Instrumental Gaede (2007) Robert Petrick Bank fraud 1 Bludgeon Instrumental Petrick (2007) Ronald Mikos Benefits fraud 1 Gunshot Instrumental Mikos (2008) Fred Tokars Money laundering 1 Gunshot Instrumental Tokars (1996) Irwin Margolies Accounting 2 Gunshot Instrumental Margolies (1987) Nancy Siegel Credit card 1 Bludgeon Instrumental Siegel (2008) Velma Barfield Forgery 4 Poison Instrumental Barfield (1983) Natavia Lowery Credit card 1 Bludgeon Instrumental Martinez (2010) Ernesta Bernal Mortgage 2 Gunshot Instrumental Cruz (2006) Jorge Cortes Mortgage 1 Gunshot Instrumental Spencer (2005) Rosie Baker Benefits fraud 1 Gunshot Instrumental Baker (2001) Russell Moss Check fraud 1 Gunshot Instrumental DiGiacomo (2009) Floyd Bogle Credit card 1 Stabbing Instrumental Herman (2011) Jose Alvarado Check fraud 1 Bludgeon Instrumental Parcher (2009) John Lau Mortgage 2 Bludgeon Instrumental Lau (2005) Christopher Porco Bank fraud 1 Bludgeon Instrumental Perri et al. (2008) Joe Collins Bank fraud 1 Bludgeon Instrumental Collins (2010) Kathleen Nelson Bank fraud 1 Bludgeon Instrumental Collins (2010) Robert Burke Insurance 1 Gunshot Instrumental Smith (1991) Edward Washington Identity 1 Gunshot Instrumental Machen (2010) Michael Howell Insurance 1 Bludgeon Unknown Wright (2008) Rosalba Contreras Mortgage 2 Bludgeon Unknown KTLA (2009)

White‐collar crime, fraud, offender 229

NARCISSISM AS A WHITE‐COLLAR CRIME HOMICIDAL RISK FACTOR

Forensic psychological evaluations found narcissism to be a homicidal risk factor (Weisman et al., 2002) and also a risk factor for WCCs to commit murder. A narcissistic sense of entitlement can drive an individual to manipulate circumstances to satisfy their motives, whether the result is fraud, murder, or both (Ablow, 2008). Consider the classic fraud‐ detection homicide case of a WCC turned killer, Eric Hanson, age 28, who was found guilty of murdering his mother, father, sister, and brother‐in‐law because his sister discovered and threatened to disclose credit card fraud he perpetrated on his mother and father (Perri et al., 2008). The forensic psychologist who evaluated Hanson testified at his sentencing that he harboured narcissistic personality disorder coupled with antisocial features with no evidence of psychotic disorders (Gutowski, 2008). Just as Hanson did, narcissists often target those they perceive to be a threat to their sense of grandiosity and egocentricity (Baumeister et al., 2000). In addition, Russ et al. (2008) found that malignant narcissists who display a history of interpersonal conflicts, criminal behaviour, abuse, intense anger, blame externalisation, entitlement, a lack of empathy, disdain for others, and arrogance are prone to violence. In Hanson’s case, he exhibited a history of antisocial behaviour and violence towards family and friends, a criminal record, deceptions, statements reflecting blame externalisation, no remorse, and an entitled/exploitative attitude (Perri et al., 2008). Further, narcissism is linked to revenge, increasing the risk of retaliation (Brown, 2004)

by resorting to brutal forms of violence against those they perceive as interfering with their schemes (Reidy et al., 2008a). The highly entitled and exploitative narcissist contributes to the prediction of aggression and may lead to the most severe and deleterious acts of violence

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representing some of the most maladaptive narcissistic traits (Reidy et al., 2008b). Martinez et al. (2008) found that even in the absence of provocation, threats, or criticisms, narcissists aggress against innocent individuals who might be viewed as potential threats. This is a plausible explanation on why Hanson also targeted his mother and father. Hanson’s mother took out loans in an attempt to help him pay back the credit card debts, and there was no evidence suggesting his father threatened to go the authorities. Narcissists sometimes forego an escalation in aggression, such as verbal aggression, and resort to intense aggressive acts as their initial method of resolving ego threats and satisfying their sense of entitlement (Reidy et al., 2008b). Consider the case of Frederick Tokars, a prominent attorney and political activist in the

State of Georgia, contracted to have his wife killed because she discovered that he was involved in tax fraud and money laundering of narcotics money, and at the time, Tokars was under investigation by the United States Department of Justice. According to the contract killer who testified against Tokars, when Tokars was asked by the contract killer about the effects of the mother’s murder on his two young children, Tokars responded, ‘They’ll be alright, they’re young, they’ll get over it’ (McDonald, 1998, p. 178). Tokars wife Sara was kidnapped, and whilst in the front passenger seat of her car, the kidnapper put a sawed‐off shotgun to her head and killed her whilst their two boys witnessed the murder from the back seat. Whilst in prison, the psychiatrist stated regarding Tokars,

Regarding his personality structure it seems apparent that he has been dealt many narcissistic blows. He has a long history of manipulating and coercing people. He did not talk of his crimes at all and he does not seem to have any remorse for his crimes (Tokars, 2008).

PSYCHOPATHY AS A WHITE‐COLLAR CRIME HOMICIDAL RISK FACTOR

Psychopathy may play a role in explaining why certain WCCs resort to violence as a solution (Brody & Kiehl, 2010; Perri & Lichtenwald, 2010). Psychopathy appears to be one of the strongest predictors of aggression, and the psychopathic traits of lacking empathy and remorse are the best indicators of unprovoked aggression (Reidy et al., 2008a; Warren, 2009), especially in homicides where there is no indication that there was any direct threat but rather just the potential for detection and disclosure of fraud. Motives for psychopathic aggression may include the need to control situations/persons and restoring the false narcissistic self that has been damaged by criticism or threats (Martens, 2003). The narcissistic sub‐dimension of psychopathy is linked to the probability that a psychopathic criminal will resort to violence (Cale & Lilienfeld, 2006), and WCCs who display traits of extreme entitlement and exploitation of others would probably resort to extreme forms of aggression. Consider the following examples. When Christopher Porco’s parents confronted him about the thousands of dollars’ worth

of fraud he had perpetrated against them, threatening to go and report him to the authorities, Porco, age 22, cleaved his parents with an axe whilst they slept, killing his father and leaving his mother for dead. Several area psychologists and mental health professionals familiar with the case agreed that Christopher Porco fit the profile of a psychopathic criminal (Grondahl, 2006). They focused on his continued pattern of lying and deceitful behaviour and pointed to his pattern of grandiose perceptions and false claims that he was a member of a wealthy and influential family. Porco’s behaviour fits the traits of an individual in need of grandiosity and embellishment in his life, and as forensic psychologist Dr Edelgard Wulfert stated, ‘There’s an overlap between psychopathic and

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narcissistic tendencies … He (Christopher) believes that the rules do not apply to him’ (Perri, 2011, p. 44). Clinical psychologist Dr Arthur Weider stated of a WCC turned killer, Santé Kimes,

that she

demonstratespsychopathicpersonalityfeatureswithnoguilt,conscience,remorseorempathy … She is typically charming socially, arrogant and full of herself, egotistic with a superiority complex. She feels everyone is stupid and will do her bidding. (King, 2002, p. 250)

White‐collar criminal turned serial killer, Velma Barfield, poisoned her fraud victims because she believed they would detect and disclose her fraud. After reviewing these homicides, where the poisoned victims died a slow and agonising death, and collecting information about Barfield’s life and behaviours, Harvard professor and forensic clinical psychologist, Dr Ellsworth Fersch, concluded that Barfield was a psychopathic criminal, exhibiting manipulation skills, antisocial behaviour, coupled with no remorse (Fersch, 2006). Yet, psychopathic WCCs do not necessarily act impulsively (Ray et al., 2010). One

study found that psychopathic criminals, who do not act out of impulse, whilst still cold and exploitative, are also disciplined, meticulous, organised planners, and these particular psychopathic criminals, when in white‐collar jobs, are in a position to commit fraud (Boddy et al., 2010; Mullins‐Sweatt et al., 2010). An impulsive nature is actually negatively correlated to organised violent offenders (Warren, 2009). These observations may explain why psychopathic WCCs who commit fraud in a planned, calculated manner may apply the same deliberate, disciplined approach to planning their murders. In one study, 93% of the convicted psychopathic killers committed the homicide in

predatory, instrumental manner, whereas only 48% of the non‐psychopathic killers engaged in instrumental homicide (Woodworth & Porter, 2002). Instrumental murders are planned, as opposed to reactive murders where an emotional outburst is contemporaneous with the catalyst, such as a provocation, that prompted the spontaneous murder (Woodworth & Porter, 2002). The absence of emotion actually assists in planning the murder (Meloy, 2000), as psychopathic murderers tend to view murder as simply a means to an end (Warren, 2009) and not an unpleasant act (Snowden et al., 2004). Woodworth and Porter’s (2002) research on the instrumental nature of psychopathic homicidal violence is further supported by Dr Hanlon’s observations and clinical experience assessing psychopathic homicidal offenders that their violence can be methodical and strategic. The fact that psychopathic criminals are caught should not necessarily be interpreted as the result of a ‘spur of the moment’ decision to offend or lack of planning because of an impulsive behavioural disposition. The result is an individual who appears impulsive, rash, irrational, and/or reactive to an observer although in reality, his or her plan came about in a calm, methodical, and instrumental fashion (Herve & Yuille, 2007). Consider affinity fraud offenders previously mentioned who are willing to also resort to

murder. James Bunchan and his wife Seng Tan, both of Cambodian ethnicity, targeted a Cambodian community in Massachusetts (Abraham, 2006) and defrauded about 400 members of over $30m in a Ponzi scheme. A Ponzi scheme is a fraudulent investment scheme that offers attractive returns to investors and provides these returns not from actual investments but by paying out the principal of other investors. The promoter usually offers abnormally attractive returns to entice investors to ensure a steady stream of new investors. To keep the fraud active, the promoter needs an ever‐increasing inflow of new deposits. In this case, the Cambodian immigrant families who did not have enough cash to invest collected money from relatives, cashed out retirement accounts, and took out equity loans on their homes.

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Tan targeted longstanding members of the community, knowing that once they bought into the investment scheme, other Cambodians would follow. As if the financial devastation to the victims was not enough, Bunchan had other plans for his Cambodian brethren. Whilst in custody awaiting the conclusion to his fraud charges, Bunchan schemed to have the Cambodian victims murdered so that the government could not prove the fraud charges against him. He erroneously believed that by eliminating the victims, the fraud case against him would be dismissed (Saltzman, 2009). He offered the hit man, who turned out to be an undercover FBI agent, $160,000 to eliminate the witnesses. He was found guilty of the murder‐for‐hire scheme.

WORKPLACE VIOLENCE AND WHITE‐COLLAR CRIMINALS

Stotland (1977) makes the claim that investigators need not worry when encountering fraud offenders because they are not the type of suspect to lash out violently. The Sallie Rohrbach case serves as another warning that some WCCs do resort to violence when they are investigated. Ms Rohrbach, a North Carolina State insurance‐fraud investigator, was killed by Michael Howell, owner of an insurance agency (Wright, 2008). Between March 2004 and May 2008, Howell embezzled more than $150,000 in documented and undocumented insurance premiums (Lowe, 2009). Prosecutors indicated that Howell’s motive for killing Rohrbach resulted from her investigation of his insurance agency and detecting evidence of insurance fraud (Boudin, 2009). As stated by the Department of Insurance spokesperson Chrissy Pearson, ‘Sally gave us no indication she was concerned about this case. It was a routine case. She was looking at some finances, looking at the books’ (Coleman & Bownes, 2008, para.12). Furthermore, Ms Pearson stated, ‘It’s the last thing we expected … We just don’t expect our people in the field to be put in this kind of danger’ (Boudin, 2008, para.17). Consider, in December 2008, tax‐fraud offender Randy Nowak was found guilty of

attempted murder of Internal Revenue Service (IRS) Agent Christine Brandt (Smith, 2008). The prosecution argued that defendant Nowak’s motive for the murder revolved around his fear that she would detect and disclose the tax fraud and money laundering schemes that amounted to the range of $3 to $4m in off‐shore accounts (Geary, 2009). The most damaging evidence against the defendant consisted of recorded conversations between Nowak and one of the undercover FBI agents posing as a hit man who was to be paid $20,000 for eliminating agent Brandt (Jones, 2008). Nowak paid him $10,000 as a down payment to kill the IRS officer (Jones, 2008). The 48‐year‐old businessman was also prepared to burn down the local IRS office so that any documents Agent Brandt possessed revealing his fraud would be destroyed (Geary, 2009).

MITIGATING THE RISKS ASSOCIATED WITH THE MISCONCEPTION OF WHITE‐COLLAR CRIMINALS

Mitigating risks associated with the misperception of WCCs begins with the understanding that appearances may be deceiving given that WCCs may appear different than the typical uneducated, unstable, street‐level offender because WCCs come across as being productive members of society because of being employed, more educated, more apt to participate in societal activities, and stable. However, as recent fraud scandals illustrate, those that may be most educated, appear productive members of society, perpetrate staggering frauds that have devastated the lives of those affected by their fraudulent acts. Moreover, part of the challenge is

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to overcome personal biases because law‐abiding citizens form bonds with WCCs because they work with them or are related to them: again, the problem of the ‘out of character’ crime theory surfaces clouding how WCCs are perceived. The author briefly examines current behavioural tools available to mitigate the risk of relying on misperceptions. Lastly, violent risk factors associated with WCCs in the workplace are outlined coupled with suggestions to mitigate such risks for the benefit of anti‐fraud professionals who investigate these offenders and also what steps can family members who are exposed to a potentially violent fraud offender implement to reduce the risks of being a homicide victim.

BUSINESS INTEGRITY SCAN

To overcome personal biases associated with how WCCs are viewed, organisations can use available behavioural tools to help them reduce the risks associated with offender misperceptions, for example, when evaluating employees or potential employees to determine who is more apt to engage in unethical conduct. One derivative of the Hare Psychopathic Checklist—Revised, a tool used to assess whether psychopathic traits are present, is the Business Integrity Scan (B‐Scan). According to Dr Babiak and Dr Hare, the B‐Scan was developed for the purpose of assessing integrity, attitudes, and judgments of individuals relevant to ethical business practices. In essence, the B‐Scan acts as a check on societal biases that may prevent a thorough evaluation of those that are capable of creating a positive but misleading impression of themselves. As Dr Babiak and Dr Hare stated, the psychopathic criminal is the kind of individual that can give others a

good impression, has a charming facade, can look and sound like the ideal corporate leader, but behind this mask has a dark side that lies, is deceitful, promotes fraud in the organization and steals the company’s money. (Steinberger, 2004)

Dr Hare believes that many of the recent corporate scandals that have plagued the society could have been prevented if high‐level executives were screened for psychopathic behaviors (MacDonald, 2002). This observation by Dr Hare is not without evidence. The United States Securities and

Exchange Commission, which is charged with regulating the accounting and financial standards of publically held companies, between 1998 and 2007, named the CEO and/or the chief financial officer (CFO) for some level of involvement in 89% of its fraud cases, up from 83% of the cases between 1987 and 1997 (COSO, 2010). Within two years of completion of the Securities and Exchange Commission’s investigation, about 20% of the CEOs/CFOs had been indicted, and over 60% of those indicted were convicted (COSO, 2010). Consider that Enron’s CFO Andrew Fastow, one of the architects of the company’s fraud, was named CFO of the year in 1999 and three years later was charged and plead guilty to securities fraud that turned out to be one of the largest US fraud scandals (Goldstein, 2011).

MITIGATION OF FAMILIAL VIOLENCE

Parents who have concerns about behaviours that are similar to Christopher Porco’s or Eric Hanson’s can employ some preventative or protective measures. Just as a business implements internal controls to safeguard its assets from being misappropriated, so too should parents implement their own internal controls to protect their own assets, including their safety. First of all, important documents or items, such as any financially related

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documents, wallets, and purses, must not be accessible to the child. It is imperative that items such as utility bills, bank statements, social security cards, and records that have personal information be made inaccessible. For example, blank cheques left around the home are a recipe for check fraud. Set up a lock box at a bank to store valuable items like jewelery, wills, and other items that could be stolen, manipulated, or forged. In the Hanson case, the police found credit card information traceable to the parents and his sister in his bedroom. Parents should occasionally check credit history for unusual transactions that they are

not aware of. It is imperative to check the origins of such transactions, as there is a real possibility that one’s child may be the cause of the transaction. Computer access codes must remain within the province of the parents. Christopher Porco had his parents’ eBay account and abused having this privilege as well as having access to his parents’ personal and tax information. Parents should make sure that the child does not have a key to their home and, if possible, should install an electronic device to notify the authorities of any intruders. It is imperative not to give the electronic access code of one’s home to the adult child. Porco was able to gain entry because his parents gave him the code to enter their home. Had Porco been forced to break in, perhaps the noise caused by the break in would have been enough of a warning for his parents to notify the authorities. Finally, communication between the family and adult child should be handled with care,

especially if such communications could be interpreted by the adult child as somehow threatening. Thus, before confronting an adult child, family should carefully weigh out the desired results and develop a strategic plan of action should things not go as intended. One of the mistakes that family members make when dealing with those family members who might have psychopathy is that they simultaneously use dual approaches of being supportive and also a tough love approach that is fraught with risk (Perri et al., 2008). For example, in the Porco case, the parents indicated that they were going to the authorities to report the fraud they detected if Porco continued with his fraudulent behaviour, but at the same time, they expressed their love and support for him even though his decisions were destructive not only to himself but also to his family. The Porco and Hanson parents were straddling two approaches that do not work with

these adult children with personality disorders coupled with antisocial dispositions. Self‐ preservation places these parents in a position where they may have to disassociate themselves from these children or they must accept family turmoil as the norm and the fact that their very lives may be in danger. Enabling the child simply emboldens a narcissistic sense of entitlement and reinforces the belief that he or she is immune from being held accountable for their actions and attempts to curtail self‐gratification is viewed as a form of provocation to aggress against. In essence, Porco’s and Hanson’s parent’s goodwill in trying to be supportive was perceived as a weakness to be exploited (Hare, 1993). However, if the goodwill ends, engaging the adult psychopathic child in power struggles by attempting to control the child’s behaviour can place parents and other loved ones at a greater risk for violent outcomes. Psychopathic children have a strong need for psychological and/or physical control to reinforce their authority.

MITIGATING THE RISK OF WORKPLACE VIOLENCE

Lastly, what mitigation strategies are available for those who might be exposed to violent WCCs? The case previously mentioned, the Sallie Rohrbach case, illustrates the

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types of aberrant behaviours that someone from law enforcement should be aware of and what steps an individual investigating a potentially violent WCC can take to mitigate the risk of becoming a victim. The first ‘workplace violence myth that needs to be debunked is the idea that a person just snaps and commits workplace homicide’ (Burton & Stewart, 2008). For example, in the Rohrbach case, some commentators indicated that Howell ‘snapped’ and did not plan to murder Rohrbach because he had no history of criminality (APA, 2008, para. 7) even though there was indication of an escalation in aggression such as intimidating and verbal behaviours. It is erroneous to believe that a prior criminal record is an indication of whether

someone had the intent to kill. It is not uncommon for these killers to rely on a lack of prior criminality as a strategy in court by projecting the image that they are not capable of such brutality when research on these violent WCCs reflects the exact opposite (Perri & Brody, 2011). Workplace homicides seldom occur randomly; they are planned, and the perpetrator intentionally targets specific individual(s) (Burton & Stewart, 2008). The fact that the perpetrator was sloppy and eventually caught is not an indication of an uncontrollable impulsive act of just snapping. Consequently, risk factors associated with vulnerable situations and the warning signs outlined in the succeeding paragraph should not be ignored. Top warning signs to consider in evaluating potential threats:

(1) physical signs: clenched jaw or fist, change in voice, pacing, a sense of desperation, scowling, violating personal space, destroying property, exaggerated or violent ges- tures, loud talking, glaring or avoiding eye contact, trembling or shaking, abusive language, rapid breathing, shoving, pushing, kicking;

(2) intimidating behaviours: argumentative, unwarranted anger, unco‐operative, impulsive, easily frustrated, challenges authority figures, embarrassing statements, humiliation, excessive phone calls;

(3) negative personality traits: blames others for his or her problems, displays a sense of entitlement, exploitative, egocentric, grandiosity, difficulty taking criticism, feels victimised; and

(4) verbal behaviours: verbal threats, even if vague, are serious signs: ‘What comes around, goes around,’ ‘I don’t get mad, I get even.’ We tend to ignore this behavior because it is perceived as a joke or cliché. Other verbal signs involve swearing, insults, or condescending language.

For law‐enforcement professionals and fraud investigators who routinely go on location to complete interviews, there are realistic precautions to reduce vulnerability. If feasible, interview in public, and when interviewing late at night, approach investigations as a team, letting others know the location of the interview (Perri & Brody, 2011). Furthermore, review an individual’s criminal history if available, encourage employees to share information about suspicious behaviours, and consider an exit strategy if in another’s office or home. Disengage in arguments that appear to be escalating in tone, and contact the authorities if danger of violence appears plausible. The Rohrbach case is atypical for a fraud‐detection homicide case in that there appeared to be signs of an escalation in offender aggression that possibly could have served as a warning sign by Rohrbach, but for which may have been ignored because of the misperception that WCCs are not violent offenders. This quality is not evident in the other fraud‐detection homicide cases presented in Table 2 because they were mostly planned against familiar victims.

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CONCLUSION

In sentencing Bernard Madoff to 150 years in prison, Judge Denny Chin stated that the

message must be sent that this kind of manipulation of the system is not just a bloodless crime that takes place on paper, but one instead that takes a staggering toll. (Henning, 2010)

White‐collar criminals are not the ‘kinder and gentler offender’ that the general public and criminal justice system often believe they are. White‐collar crime’s monetary impact dwarfs that of street‐level crimes, and the emotional and physiological effects can resemble those of victims of violent acts. Yet, relative to street crimes, little is known about white‐ collar crimes in behavioural terms, and further research is needed to refine the behavioural traits of WCCs, whether they work within an organisation or operate individually. WCCs are not a homogenous crime group; they display diverse criminological and behavioural characteristics. Not only do they devastate the financial position of countless individuals, such as street‐level criminals, but they also resort to murder to prevent their fraud schemes from being detected and disclosed. Dr. Hare once indicated that if he was not studying psychopaths in prison, he would

be studying them at the Stock Exchange. Interestingly, given the devastating financial scandals exposed in recent times and the number of white‐collar criminals who are now in prison, such as Bernard Madoff, the time has come to direct some of the scholarship of criminal behavioral traits to white‐collar criminals. At best, this paper illustrates that white‐collar criminals can harbor negative behavioral traits that serve as fraud offender risk factors coupled with exacting financial, emotional and physical damage upon its victims. Yet, there is great need for sound empirical research to refine offender profiling for this offender group. Just as non‐white‐collar criminals in prison, such as serial killers, rapists and a variety of other offender groups, are studied in great depth for behavioral traits such as narcissism and psychopathy, scholars should consider studying the behavioral traits of white‐collar criminals, both those that are still incarcerated and those that are not, to assist in debunking the myth that white‐collar criminals represent a homogenous offender group.

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