Friday, September 16, 2005

WHITE COLLAR CRIME CHOICE OF BABY BOOMERS

As reported in the NY TIMES recently, the federal government crime statistics indicate that the surge in business fraud and white collar corruption continues. “The bursting of the stock market bubble, combined with the changing face of the American population, has led to a surge” in white collar crime.The last decade has seen violent crime, including the rate of murder, robbery, assault and other property crimes has declined or flattened. On the other hand, a marked increase in accounting and corporate infractions, fraud in health care, government procurement and bankruptcy, identity theft, illegal corporate espionage and intellectual property piracy has been observed.Attributed to some of this are technological advances like the Internet. Equally important, it is reported, are the demographic changes, like the aging and growing prosperity and education of the population.Fraud is on the rise as the same time as other crimes are decrerasing.According to Joseph T. Wells, a former FBI agent and founder of the Association of Certified Fraud Examiners, “There are at least two reasons. Crime is largely a factor of age, and fraud is the crime of choice of the older perpetrator, so as the society ages, you have, and should continue to see, an increase in fraud cases”.The education level of society is also cited as a contributing factor. As the education level has risen over the past 20 years, the message is clear in the mind of the better-educated public that if you want to commit a crime, fraud is the way to go. “The take is better, and the punishment is generally less”, states Wells.Executive compensation packages are also given as a motive to manipulate financial statements for short-term personal gain.The White Collar Crime Reporter, a trade publication for lawyers and investigators, recently said “White-collar crime is spinning through the roof. It’s spinning new varieties daily and the incidence and amounts of money being stolen are incredible”.The area of white-collar crime has a triangle that they refer to as “The Fraud Triangle”. People commit fraud because of three factors: financial pressure, the perception of an opportunity, and rationalizing it as O.K. “All three of these elements have been increasing”.

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