What is white-collar crime?
- The term “white-collar crime” was first used in 1939 by sociologist Edwin Sutherland indicating a criminal’s high social status. Today the term is used to describe any crime that is financially motivated but does not make use of physical force or violence. For example, recently in South Carolina, a 65-year-old man was sentenced to four years in prison after he duped 14 victims in an investment fraud scheme.
- White-collar crime happens just as often to small businesses as it does to large businesses. Many instances of white-collar crime happen in businesses with less than 25 employees.
- Non-profits are especially susceptible to white-collar crime. Recently in South Carolina, the head of an arts foundation created Carolina’s Got Talent, a talent competition similar to America’s Got Talent. When the winners didn’t get the cash they were promised, they asked authorities to look into the matter. Sure enough, the creator committed embezzlement and fraud leaving the arts foundation with no funds to pay for the prizes.
- What motivates white-collar criminals? Eugene Soltes in his book Why They Do It: Inside the Mind of the White-Collar Criminal explains that more often than not the crimes were committed to solving a financial problem. There was not a thought-out elaborate scheme, but the criminal under great stress and pressure used the white-collar crime as a logical solution to their financial problem either personally or corporately without thinking through the consequences. The crimes were “failures of managerial intuitions and gut instincts.”
- The criminal is often a middle-aged woman who is highly trusted but goes through hard personal times. She often has total control of the company’s books. South Carolina saw an example of this just last year when a 63-year-old woman stole money from the town where she was a clerk and the church where she was treasurer.
- White-collar crime can also happen through a vendor. A company orders a product and when it arrives it is not the quality that was promised like a shipment of pens that are only half full of ink. Or the company places a deposit on an order but the order never arrives and the business’s phone is then disconnected.
How to Protect Your Business
- Make sure that no one has sole control of the books. Require two signatures for checks. Routinely have an audit made on the company’s accounts.
- As the business owner, stay on top of reviewing the books yourself. Have bank statements mailed to your home and not the office. Ask about what doesn’t look right. Get to the bottom of something that looks suspicious.
- When investing make sure you check and double check the legalities of a process especially when something doesn’t sound right.
- When trying out a new vendor, research diligently to find out if the vendor is reliable. Have any new vendor relationship be approved by the board or the business owner in order to provide checks and balances.
To protect South Carolina from white-collar crime, Quick Group offers security consulting. Invite our team to come to your place of business to train and equip your staff to safely handle your assets. If you discover you are a victim, our team of private investigators and forensic accountants can expertly gather the evidence and prepare it for court so that you can experience justice and restitution.