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Explaining White-Collar Crime
Petter Gottschalk
Explaining
White-Collar Crime
The Concept of Convenience in Financial
Crime Investigations
Petter Gottschalk
BI Norwegian Business School
Dept. of Leadership and Org. Behavior
Oslo, Norway
ISBN 978-3-319-44985-2 ISBN 978-3-319-44986-9 (eBook)

DOI 10.1007/978-3-319-44986-9
Library of Congress Control Number: 2016948583
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CONTENTS
1 Introduction 1
2 Convenience Theory 5
3 Reports of Investigations 33
4 Economical Convenience 51
5 Organizational Convenience 61
6 Behavioral Convenience 79
7 The Case of Skjervøy in Norway 91
8 Conclusion 107
References 115
Index 129
v
LIST OF FIGURES
Fig. 2.1 A conceptual model of crime occurrence based on

convenience theory 21
Fig. 4.1 Pyramid of needs for white-collar offenders adapted
from Maslow 59
Fig. 8.1 Stages of growth model for corporate social responsibility 109
vii
LIST OF TABLES
Table 2.1 Theoretical contributions to convenience in crime 29

Table 3.1 Sample of US reports of investigations
by fraud examiners 36
Table 3.2 Sample of Norwegian reports of investigations
by fraud examiners 38
Table 3.3 Convenience theory applied to the US sample
of investigation reports 40
Table 3.4 Convenience theory applied to the Norwegian sample
of investigation reports 46
Table 7.1 Actors in the Skjervøy case and completed interviews
by KomRev (2015) 96
Table 7.2 Evaluation of investigation report in relation
to investigation mandate 98
ix
CHAPTER 1
Introduction
Abstract Convenience theory provides a set of explanations of condi-

tions and circumstances that make financial crime an attractive option
for members of the elite in situations dominated by threats and possibi-
lities. Convenience can be found in the economical, organizational, and
behavioral dimensions.
Keywords convenience theory financial crime fraud examination report

of investigation
This book deals with the topic of white-collar crime and considers the role
of convenience in explaining its occurrence. It puts forward convenience
as a theoretical explanation that underlies existing theories and research on
white-collar crime. Convenience seems present in all three dimensions of
crime: economic dimension, organizational dimension, and behavioral
dimension.
Based on multiple case studies of investigation reports by fraud exam-
iners, this book explores the empirical evidence to support convenience
theory. Empirical studies of fraud examination reports from both the
USA and Norway illustrate the convenience perspective in white-collar
crime.
White-collar crime is defined as financial crime committed by privi-
leged people in the elite. Although the occurrence of economic crime may
© The Author(s) 2016 1

P. Gottschalk, Explaining White-Collar Crime,
DOI 10.1007/978-3-319-44986-9_1
2 EXPLAINING WHITE-COLLAR CRIME
be frequent among people in the elite, the police and prosecution very
seldom prosecute individuals of the upper class in society. Therefore, it
always comes as a surprise when it happens. It was quite a surprise when
Spain’s Princess Cristina had to stand trial on tax fraud charges. She is the
youngest daughter of King Kuan Carlos. Princess Cristina became the first
member of Spain’s royal family to be put on trial as she appeared in court
with her husband (Robinson and Mezzofiore, 2016).
When the elite and other members of the upper class in society are
suspected of misconduct and financial crime, private investigations are
sometimes initiated. Fraud examiners are hired to confirm or disconfirm
suspicions by reconstructing the past. Very often, private investigation
reports are kept secret and are neither available to the police nor to the
public in general (Gottschalk, 2015, 2016). However, it was possible to
identify and obtain a number of investigation reports in both the USA and
Norway to conduct empirical research on white-collar crime as presented
in this book.
The book introduces the concept of convenience in the study of
financial crime which complements, refines, and extends understanding
of many popular theories in explaining white-collar crime and the various
factors that contribute to it. Convenience theory is both an offense and
offender-based explanation which elucidates some of the important orga-
nizational, economic, and motivational features of financial crime. Of
particular significance are matters of opportunity to carry out illicit activity,
and also the practical convenience of carrying out crime against the
chances of being caught or discovered. Convenience theory provides a
set of explanations of the subjective and objective conditions for financial
crime, which is supported by data drawn from fraud examiners’ reports in
Norway and the USA. The reports cover a range of organizations that have
undergone investigations; while the majority are related to business orga-
nizations, they also include religious associations and other forms of
administration. The data and case studies in particular help to throw
light on the various ways convenience as a concept informed the deci-
sion-making and actions of well-placed individuals in organizational hier-
archies to carry out white-collar crime.
This book sums up the various theories about white-collar crime and
contemporary discussions around these matters, which is useful in itself
before going on to outline the contribution of convenience theory as a
new and novel way to understand financial crime. It attempts to do this in
a very lucid, engaging, and interesting manner.
1 INTRODUCTION 3
However, as pointed out by a blind reviewer of the book manuscript,

the claim that convenience theory is new is potentially contentious. The
key components of the theory are very similar to Marcus Felson’s problem
triangle analysis in the area of crime prevention which posits the three
conditions for crime as: a motivated offender, an opportunity, and the
absence of a moral guardian. While the first two factors are considered in
this book’s explanations and critique of conventional theories, this book
makes little mention of the existence of moral guardian as a facilitator or
an inhibitor for crime. This may give the impression that the omission
serves to give more weight to the claims of originality of convenience
theory. Therefore, it is important to emphasize the work on guardians by
Felson (1994). Felson may not have used the term “convenience” expli-
citly in his theory on crime and crime prevention, but there is no doubt it
shaped much of his thinking.
The originality of convenience theory is that it throws new light on a
previously unappreciated conceptual lens of convenience in theorizing and
practically understanding white-collar crime. The book addresses the fol-
lowing: the important areas of financial and economic crime, who carries
out these offenses, and under what conditions and how we understand
these activities. Equally relevant, the book explores how to detect and
prevent these kinds of crime, and it should be a welcome contribution to
the growing literature on these issues. The book engages with the litera-
ture, is up to date, and makes a useful contribution to scholarship in the
areas related to financial crime and the teaching of these subjects.
An anonymous reviewer pointed out that the strengths of the book are
its critical examination of theories around financial or white-collar crime
and the section that addressed theory building. This section of the book
provides a comprehensive summary which is useful for students or other
types of readers.
This book applies a descriptive approach to convenience in white-collar
crime by focusing on the specifics of the case studies. The descriptive
approach serves the purpose of demonstrating motives, opportunities,
and behaviors. Of course, white-collar crime can also be a form of incon-
venience, which might be applied to the offender(s) and those around
them as it may create a variety of problems. However, as long as the
likelihood of detection is low and sometimes almost nonexistent, the
expected inconvenience is microscopically small.
The samples of fraud examination reports from the USA and Norway
represent nonprobability purposive sampling. They do not represent the
pool of private investigations in the two countries. It is certainly a chal-

lenge trying to assess retrospective evidence for a small number of cases
that do get investigated and then are accessible. The reader should apply
critical skepticism throughout the work in an effort not only to consider
that convenience theory may be a useful explanatory concept but also to
consider rival explanations and possibilities.
Terms such as financial crime, white-collar crime, and corporate crime
occur frequently throughout the book. They do not mean the same.
Financial crime is the broader term. It is narrowed down by white-collar
crime, which means financial crime by individuals in the elite. It is further
narrowed down by corporate crime, which means financial crime by
individuals in the elite to benefit the organization.
CHAPTER 2
Convenience Theory
Abstract A number of theories from criminology, management, sociology,

psychology, and organizational behavior have been introduced to explain
occurrences of white-collar crime. In this chapter, such theories are
integrated into a main theory of convenience. In convenience theory, pre-
vious theories are organized into three dimensions: economical motive,
organizational opportunity, and deviant behavior. Convenience can be
found in all three dimensions when white-collar crime occurs.
Keywords economical convenience organizational convenience

behavioral convenience convenience theory
INTRODUCTION
Ever since Sutherland (1940) coined the term “white-collar crime,” a
number of theoretical approaches have been introduced to explain the
phenomenon. Sutherland (1983) himself emphasizes differential asso-
ciation theory, where criminal behavior is learned in association with
those who define such criminal behavior favorably and in isolation
from those who define it unfavorably. Piquero and Benson (2004) as
well as Benson and Simpson (2015) emphasize opportunity as the
main factor for white-collar crime. Coleman (1987) suggests an inte-
grated theory of white-collar crime claiming that criminal behavior

DOI 10.1007/978-3-319-44986-9_2
results from the confluence of appropriate motivation and opportunity.

Sutherland (1983, p. 2) originally defined a white-collar crime as
“a crime committed by a person of respectability and high social status
in the course of his occupation.”
According to Koppen et al. (2010), crime is often described as a
behavior that involves the pursuit of immediate pleasure. Sometimes
white-collar crime requires little in the way of effort, planning, and
preparation, and also hardly requires any specific skills or contacts.
It only requires legal access to resources that enable criminal acts.
Even when white-collar crime requires substantial effort, planning
and preparation, it may still be attractive, as alternatives are less attrac-
tive or not available at all.
Ever since Sutherland (1940) coined the term “white-collar crime,”
there has been a debate on who to include in and who to exclude from this
category of criminals. For example, Brightman (2009) argues that perso-
nal computers and the Internet allow individuals from all social classes to
buy and sell stocks and engage in similar activities that were once the
bastion of the financial elite. Benson and Simpson (2015) find this insuffi-
cient as an argument to include virtually any nonviolent act committed for
financial gain regardless of one’s social status into the term “white-collar
crime,” since the definition of white-collar criminal involves a breach of
trust. Since scholars tend to disagree, white-collar crime seems to be in
need of additional theory.
Scholars seem to agree that while circumstances have changed over the
years, the definition of a white-collar crime has to be both offense-based
and offender-based. The offense-based perspective is concerned with
financial crime for economic gain. The offender-based perspective is con-
cerned with the role, profession, and position enabling the offender to
commit crime (Gottschalk and Rundmo, 2014).
The concept of convenience is introduced to examine white-collar
crime by creating convenience theory as an umbrella term for a number
of well-established theories when applied to white-collar crime.
Therefore, convenience theory is not a new theory as such but rather
a new perspective integrating a number of existing theories. It can help
to unify a number of different theories and can play the role of a
general theory of white-collar crime. Identifying convenience con-
struct’s qualities require engaging with a number of other theories
and approaches.
2 CONVENIENCE THEORY 7
THE CONCEPT OF CONVENIENCE IN CRIME

Extracting the concept from marketing theory (Farquhar and Rowley, 2009),
convenience in white-collar crime relates to savings in time and effort by
privileged and trusted individuals to reach a goal. Convenience is here an
attribute of an illegal action. Convenience comes at a potential cost to the
offender in terms of the likelihood of detection and future punishment. In
other words, reducing time and effort now entails a greater potential for
future cost. “Paying for convenience” is a way of phrasing this proposition.
Convenience is the perceived savings in time and effort required to find
and to facilitate the use of a solution to a problem or to exploit favorable
circumstances. Convenience directly relates to the amount of time and
effort that is required to accomplish a task. Convenience addresses the
time and effort exerted before, during, and after an activity. Convenience
represents a time and effort component related to the complete illegal
transaction process or processes (Collier and Kimes, 2012).
People differ in their temporal orientation, including perceived time
scarcity, the degree to which they value time, and their sensitivity to time-
related issues. Facing strain, greed, or other situations, an illegal activity
can represent a convenient solution to a problem that the individual or the
organization otherwise finds difficult or even impossible to solve. The
desire for convenience varies among people. “Convenience orientation”
is a term that refers to a person’s general preference for convenient solu-
tions to problems. A convenience-oriented individual is one who seeks to
accomplish a task in the shortest time with the least expenditure of human
energy (Farquhar and Rowley, 2009).
Convenience motivates the choice of action. An important element in
convenience is saving time in terms of efficiency in time savings, and
another element is avoiding more problematic, stressful, and challenging
situations. Convenience can be both an absolute construct and a relative
construct. As an absolute construct, it is attractive to commit crime as
such. As a relative construct, it is more convenient to commit crime than
to carry out alternative actions to solve a problem or gain benefits from an
opportunity. Convenience is an advantage in favor of a specific action to
the detriment of alternative actions. In white-collar crime, it seems that
convenience is mainly a relative construct. Decision-making implies a
choice between alternatives, where one alternative might be relatively
more convenient. Convenience is a matter of perception in advance of
possible criminal actions. Convenience must be viewed as a significant

variable whose understanding involves complexity in multiple meanings
(Sundström and Radon, 2015).
For example, the flexibility to choose the exact moment for making a
deal or another kind of action can also be perceived as a matter of
convenience. Convenience can also mean selecting a proper occasion,
which, in turn, is about timing. There may be more reluctance to do
something at a certain point in time than willingness to save or spend
time. Thus, when something is convenient, it could mean saving time as
well as spending time and doing it at the right moment (Sundström and
Radon, 2015).
In addition to time convenience and timing convenience, there may be
place convenience, where a potential offender finds the spatial circum-
stances convenient for crime (Sundström and Radon, 2015). In white-
collar crime, the organizational setting is typically characterized by spatial
convenience.
Three main dimensions to explain white-collar crime have emerged.
All of them link to convenience. The first dimension is concerned with
economic aspects, where convenience implies that the illegal financial
gain is a convenient option for the decision-maker to cover needs. The
second dimension is concerned with organizational aspects, where
convenience implies that the offender has convenient access to pre-
mises and convenient ability to hide illegal transactions among legal
transactions. The third dimension is concerned with behavioral aspects,
where convenience implies that the offender finds convenient
justification.
This chapter reviews the state-of-the-art relating to white-collar crime
and criminals by applying the economic, organizational, and behavioral
dimensions. By combining these dimensions, an integrated explanation of
white-collar crime emerges, which we label convenience theory. White-
collar criminals have convenient access, and financial crime saves them
time and effort to solve a problem related to making a personal or
organizational profit. Convenience is a relative concept, where the ease
of problem-solving can cause future costs for the offender. Crime is
committed if found suitable by the offender, and especially when no
alternative is in sight.
This chapter presents ideas that are grounded in the existing
literature, and these ideas represent a novel and innovative perspec-
tive: they answer questions that are not adequately explained by the
existing literature or provide different answers to “how . . . ?”,

“why . . . ?”, and “when . . . ?” questions.
This chapter presents the proposed convenience theory’s three dimen-
sions and develops a conceptual model integrating the dimensions. The
chapter attempts to organize the literature in white-collar crime and to
provoke thought in the role of convenience as a grand concept that makes
sense of what already is known of crime. It asserts that the application of
the notion of convenience is novel and will lead to a greater understanding
of white-collar crime and the causes at economical, organizational, and
personal levels.
ECONOMICAL DIMENSION OF CONVENIENCE THEORY

Motive-focused theories explain crime in terms of reasons. White-collar
crime is profit-driven crime based on favorable economic circumstances.
As argued by Naylor (2003), transfers of property occur by free-market
exchange or fraud, and these transfers involve redistribution of wealth and
distribution of income. Fraud is illegal procurement of a private asset or
means of advantage through deception or through the neglect of care for
the interests of an asset required by duty. In particular, fraud includes
heterogeneous forms such as misappropriation, balance manipulation,
insolvency, and capital investment abuse (Füss and Hecker, 2008).
Profit-driven crime occurs both because of threats and strengths.
Threats can come from loss-making business and special market structure
and forces. Economic power available only to certain corporations in
concentrated industries, but not to others, may generate criminal conduct.
The threat of losing in a bankruptcy what owners already had created can
cause executives to rescue and save the company by illegal means. An
entrepreneur, who has spent all his time building the enterprise, might be
unable to let it disappear (Piquero, 2012). The intention is to protect
economic interests of the corporation (Blickle et al., 2006). Threats can
come from a monopoly, where potential competitors have the choice of
either committing crime or joining the monopoly (Chang et al., 2005).
Financial gain is a requirement for survival in all markets (Brightman,
2009) to avoid strain (Langton and Piquero, 2007).
Profit-driven crime because of favorable circumstances includes large
contracts, subsidiaries abroad, extra personal bonus, personal promotion,
and improved reputation. Bribing government officials abroad can secure
establishment of local presence in oil and gas, while the executive can
receive personal bonus for goal achievement. Favorable circumstances can

also be found in private life, where the white-collar criminal finds favorable
circumstances to acquire a summer house and a bigger boat. Favorable
circumstances are here defined as possibilities to reach an organizational or
personal goal.
The economic model of rational self-interest considers incentives and
probability of detection (Welsh et al., 2014). Human behavior finds
motivation in the self-interested pursuit of pleasure and the avoidance of
pain. The rational choice model finds support in an empirical study by
Bucy et al. (2008), who identified a number of motives for white-collar
crime. According to their study, greed is the most common reason for
white-collar criminal acts (Hamilton and Micklethwait, 2006). Money and
other forms of financial gain is a frequent motivator documented in many
studies. Criminals pursue desired goals, weigh up likely consequences, and
make selections from various options. When favorable criminal circum-
stances are attractive as a means to fulfill one’s desires, rational actors will
choose it. Goldstraw-White (2012) defines greed as socially constructed
needs and desires that can never be completely satisfied. Because partici-
pating in crime is a rational choice, crime rates will be lower where levels of
punishment are more certain and/or more severe (Pratt and Cullen,
2005). Rational choice theorists have generally adopted the position of
standard economic theory’s notion of revealed preferences. However,
Kamerdze et al. (2014) argue that affects and individual affective states
play a role in one’s utility functions and are thus relevant for rational
choice theory because they have an impact on mediating cognitive
processes.
The Russian–American psychologist Abraham Maslow developed a hier-
archy of human needs. Needs start at the bottom with physiological need,
need for security, social need, and need for respect and self-realization.
White-collar crime is mainly concerned with the two top levels in terms of
status and success. Another well-known motivation researcher is Fredrick
Herzberg who made a distinction between hygiene factors (such as job
security and salary) and satisfiers. Satisfiers include achievement, recognition,
work itself, responsibility, promotion, and growth. According to his motiva-
tion theory, dissatisfaction can be prevented by improvements in hygiene
factors such as pay and benefits, but these improvements will not alone
provide motivation.
If the criminal considers favorable criminal circumstances convenient
in terms of current gain (profit) relative to future cost (punishment),
and the criminal would like to avoid additional time and effort to solve
the problem, then convenience theory suggests that white-collar crime
will be committed. White-collar crime is usually not offenses of pas-
sion. They are not spontaneous or emotional, but calculated risks for a
convenient solution to a challenge or problem by rational actors. As
argued by Agnew (2014: 2), “crime is often the most expedient way to
get what you want,” and “fraud is often easier, simpler, faster, more
exciting, and more certain than other means of securing one’s ends”.
While the economic model of rational self-interest considers incentives
and probability of detection (Welsh et al., 2014), Agnew’s (2014) theory
of social concern and crime suggests that crime can also be committed
when people have more considerations for others than for their own
interests.
Profit-driven crime is more likely in organizations motivated by
ambitious economic goals. The pursuit of ambitious goals tends to accept
a greater variety of means to reach goals (Jonnergård et al., 2010). One of
the means available to executives is financial crime. Goal achievement
by financial crime can imply both corporate crime and occupational
crime, since a criminal may be promoted and paid a bonus after goal
achievement.
A division of the white-collar crime concept into two categories is
often applied. The first one, occupational crime, stands for crime
committed by the self-interest of individuals toward organizations.
The second one, corporate crime, stands for crime committed by
corporate officials for the interests of the organization and by corpora-
tions themselves in their routines toward other organizations. While
occupational crime is an agency problem where the criminal abuses
agency roles for personal benefit, corporate crime is structural pro-
blem where the enterprise is to benefit. Most jurisdiction make a
similar distinction between a natural person (individual) and a juridical
person (organization), and demand criminal liability in terms of prison
versus fine.
Crime is convenient as it often is an attempt to circumvent more
difficult (legal) means of accomplishment—such as hard work, fair com-
petition, and navigation of bureaucracy and red tape. Many individuals get
tired while dealing with complexity and thus search for simple solutions.
They tend to make convenient decisions when responding to incentives.
Inconvenience is a cost that is circumvented by some individuals and some
organizations.
The desire for conventional success can lead to deviant behavior. There
is a convenience orientation that encourages individuals and groups to
take short cuts (Sundström and Radon, 2015).
ORGANIZATIONAL DIMENSION OF CONVENIENCE THEORY

Situation-focused theories explain crime in terms of opportunity structures
(Koppen et al., 2010). Piquero and Benson (2004) proposed a middle-
ground explanation of white-collar crime, which they call the punctuated
situational theory of offending. This theory assumes that white-collar
criminals start offending when they reach their thirties or forties.
External factors, such as personal or occupational crisis, and opportunities
that result from a certain occupational status are claimed to explain crime.
Situational opportunities—such as a more influential job and more impor-
tant contacts—give access to legitimate means to obtain desirable goals.
The opportunity perspective in the situation has also been stressed by
Benson and Simpson (2015). They emphasize legal access to premises and
resources, distance from victims, and manipulation within regular
transactions.
The situation is not only characterized by opportunities in the organi-
zation but also by the organizational environment. Criminogenic condi-
tions in the environment make white-collar crime even more accessible.
Alibux (2015) exemplify the environment by the attitude toward banks
that are considered too powerful to fail, which thus may protect wrong-
doings of bank executives. This is in line with institutional theory, which
suggests that opportunities are shaped by individuals, groups, other orga-
nizations, as well as society at large (Bradshaw, 2015).
Opportunity is a distinct characteristic of white-collar crime and varies
depending on the kinds of criminals involved (Michel, 2008). An oppor-
tunity is attractive as a means of responding to desires (Bucy et al., 2008).
It is the organizational dimension that provides the white-collar criminal
an opportunity to commit financial crime and conceal it in legal organiza-
tional activities. While opportunity in the economic dimension of conve-
nience theory is concerned with goals (such as sales and bonuses),
opportunity in the organizational dimension is concerned with crime
(such as corruption and embezzlement).
Aguilera and Vadera (2008: 434) describe a criminal opportunity as
“the presence of a favorable combination of circumstances that renders a
possible course of action relevant.” Opportunity arises when individuals or
groups can engage in illegal and unethical behavior and expect, with
reasonable confidence (Haines, 2014), to avoid detection and punish-
ment. Opportunity to commit crime may include macro- and micro-
level factors. Macro-level factors encompass the characteristics of the
industries in which the business finds itself embedded, such as market
structure, business sets of an industry, that is, companies whose actions
are visible to one another, and variations in the regulatory environment
(Aguilera and Vadera, 2008).
Benson and Simpson (2015) argue that many white-collar offenses
manifest the following opportunity properties: (1) the offender has legit-
imate access to the location in which the crime is committed; (2) the
offender is spatially separate from the victim, and (3) the offender’s actions
have a superficial appearance of legitimacy. Opportunity occurs in terms of
those three properties that are typically the case for executives and other
individuals in the elite. In terms of convenience, these three properties
may be attractive and convenient when considering white-collar crime to
solve a financial problem. It is convenient for the offender to conceal the
crime and give it an appearance of outward respectability (Pickett and
Pickett, 2002).
Opportunity is dependent on social capital available to the criminal.
The structure and quality of social ties in hierarchical and transactional
relationships shape opportunity structures. Social capital is the sum of
actual or potential resources accruing to the criminal by virtue of his or
her position in a hierarchy and in a network (Adler and Kwon, 2002).
The organizational dimension of white-collar crime becomes particu-
larly evident when financial crime is committed to benefit the organization
rather than the individual (Trahan, 2011). This is called corporate crime as
opposed to occupational crime for personal benefit. Hansen (2009) argues
that the problem with occupational crime is that it is committed within the
confines of positions of trust and in organizations, which prohibit surveil-
lance and accountability. Heath (2008) found that individuals who are
further up the chain of command in the firm tend to commit bigger and
more severe occupational crime. Corporate crime, sometimes labelled
organizational offending (Reed and Yeager, 1996), on the other hand, is
resulting from offenses by collectivities or aggregates of discrete indivi-
duals. If a corporate official violates the law in acting for the corporation,
we still define it as corporate crime. However, if he or she gains personal
benefit in the commission of a crime against the corporation, we regard it
as occupational crime. A corporation cannot be subject to imprisonment,
and therefore, the majority of penalties to control individual violators are

not available for corporations and corporate crime (Bookman, 2008).
An organization is a system of coordinated actions among individuals
and groups with boundaries and goals (Puranam et al., 2014). An orga-
nization can be a hierarchy, a matrix, a network, or any other kind of
relationships between people in a professional work environment. Rule-
breaking and law-breaking seems sometimes necessary to ensure organiza-
tional flexibility and reach business goals. Because rules and laws are
formulated in abstract terms, they cannot precisely prescribe behavior in
any situation. To act in novel situations sometimes demands breaking rules
and laws in order to fit it to the organizational circumstance at hand (Eberl
et al., 2015).
The organizational dimension of white-collar crime also becomes par-
ticularly evident when several persons in the business participate in crime
(Ashforth et al., 2008), and when the organization generally is dominated
by misconduct and an unethical culture (O’Connor, 2005), either it is
occupational crime or corporate crime that is occurring. When several
participants and sleeping partners are involved in crime, and the corporate
culture almost stimulates violation of the law, then we label the organiza-
tion as a rotten apple barrel or rotten apple orchard, as Punch (2003: 172)
describes them:
The metaphor of “rotten orchards” indicate that it is sometimes not the

apple, or even the barrel that is rotten but the system (or significant parts of
the system).
White-collar crime is illegal and unethical actions by agents of organiza-

tions (Vadera and Aguilera, 2015). Agency theory is a management theory
often applied to crime, where normally the agent, rather than the princi-
pal, is in danger of committing crime. Problems arise in the relationship
because of diverging preferences and conflicting values, asymmetry in
knowledge about activities, and different attitudes toward risk. Agency
theory describes the relationship between the two parties using the con-
cept of work-based interactions. The agent carries out work on behalf of
the principal in an organizational arrangement. Principal-agent theory
holds that owners (principals) have different interests from administrators
(agents), such that principals must always suspect agents of making deci-
sions that benefit themselves, to the cost of the principals. For example,
chief executive officers (CEOs) are suspects for cheating the owners
(Williams, 2008), and purchasing managers are suspects of cheating their

CEOs (Chrisman et al., 2007).
In general, agency models view corruption and other kinds of financial
crime a consequence of the principal’s inability effectively to prevent the
agent from abusing power for his or her personal gain (Li and Ouyang,
2007). However, the principal can just as well commit financial crime in
the principal–agent relationship. For example, the chief financial officer
(CFO) as an agent provides a board member with inside information, on
which the principal acts illegally.
The organizational setting may prevent some white-collar criminals
from prosecution. The company may be too big to fall, and the criminal
too powerful to jail. For example, after the 2008 financial meltdown in the
USA, people expected that the government would prosecute fraud in large
financial institutions. Pontell et al. (2014: 10) assessed the reasons why
there have been no major prosecutions to date:
From a criminological standpoint, the current financial meltdown points

to the need to unpack the concept of status when examining white-
collar and corporate offenses. The high standing of those involved in
the current scandal has acted as a significant shield to accusations of
criminal wrongdoing in at least three ways. First, the legal resources
that offenders can bring to bear on any case made against them are
significant. This would give pause to any prosecutor, regardless of the
evidence that exists. Second, their place in the organization assures that
the many below them will be held more directly responsible for the
more readily detected offenses. The downward focus on white-collar
and corporate crimes is partly a function of the visibility of the offense
and the ease with which it can be officially pursued. Third, the political
power of large financial institutions allow for effective lobbying that
both distances them from the criminal law and prevents the government
from restricting them from receiving taxpayer money when they get
into trouble.
Similarly, Valukas (2010) found no wrongdoing at Lehman Brothers,

which went bankrupt because of mismanagement decision-making.
Opportunity as a distinct characteristic of white-collar crime can be
exemplified in a gender perspective. As long as a glass ceiling exists for
most women in terms of promotion to top positions, women have less
opportunity to commit white-collar crime. Therefore, we expect to find
fewer female criminals than male criminals (Arnulf and Gottschalk, 2013).
BEHAVIORAL DIMENSION OF CONVENIENCE THEORY

Offender-focused theories explain crime in terms of personality character-
istics (Koppen et al., 2010). Self-control theory is a typical theory related
to deviant behavior (Gottfredson and Hirschi, 1990). Individuals with low
self-control have a tendency to be impulsive, self-centered, out for adven-
ture, and out for immediate pleasure. Immediate pleasure may be achieved
more conveniently by white-collar crime than by legal activities.
Most theories of white-collar crime develop along the behavioral
dimension. Researchers introduce numerous suggestions to explain
white-collar individuals such as Madoff, Rajaratman and Schilling.
Along the behavioral dimension, we find strain theory (Langton and
Piquero, 2007), deterrence theory (Comey, 2009; Holtfreter et al.,
2008), self-control theory (Gottfredson and Hirschi, 1990; Holtfreter
et al., 2010; Piquero et al., 2010), obedience theory (Baird and Zelin,
2009), fear of falling (Piquero, 2012), negative life events (Engdahl,
2014), slippery slope (Welsh et al., 2014), and the American dream of
economic success (Pratt and Cullen, 2005; Schoepfer and Piquero,
2006)—just to name a few. These theories suggest motives for com-
mitting white-collar crime, and they make crime a convenient option
according to convenience theory. It is convenient for the criminal to
be deceitful and breach trust to cause losses to others and gain for one
self (Pickett and Pickett, 2002).
In recent years, neutralization theory seems to increase in impor-
tance as a source of explanation. By applying neutralization techniques,
white-collar criminals think they are doing nothing wrong. They deny
responsibility, injury, and victim. They condemn the condemners.
They claim appeal to higher loyalties and normality of action. They
claim entitlement, and they argue the case of legal mistake. They find
their own mistakes acceptable. They argue a dilemma arose, whereby
they made a reasonable tradeoff before committing the act (Siponen
and Vance, 2010).
Benson and Simpson (2015: 145) found that white-collar criminals
seldom think of injury or victims:
Many white-collar offenses fail to match this common-sense stereotype

because the offenders do not set out intentionally to harm any specific
individual. Rather, the consequences of their illegal acts fall upon impersonal
organizations or a diffuse and unseen mass of people.
The idea of neutralization techniques (Sykes and Matza, 1957) resulted

from work on Sutherland’s (1949) differential association theory.
According to this theory, people are always aware of their moral obligation
to abide by the law, and they are aware that they have the same moral
obligation within themselves to avoid illegitimate acts. The theory postu-
lates that criminal behavior learning occurs in association with those who
find such criminal behavior favorable and in isolation from those who find
it unfavorable (Benson and Simpson, 2015). Crime is relatively convenient
when there is no guilt feeling for doing something learned from others.
Evidence of neutralization can be found in autobiographies by white-
collar criminals such as Kerik (2015), Bogen (2008), Eriksen (2010), and
Fosse (2004). Bernard B. Kerik was the former police commissioner in
New York, who served three years in prison. He seems to deny responsi-
bility, to condemn his condemners, and to suggest normality of action.
Bystrova and Gottschalk (2015) phrased the question: Why does the
ruling class punish their own? They argue that the elite decide what is right
and wrong, and they manage law enforcement. This is in line with social
conflict theory. When a member of the elite breaks the law, it is not
considered a real crime. The act is not violent, and it is committed by
one of their own.
Another important source of explanation is strain theory. Strain may
involve the removal of positively valued stimuli (Johnson and Graff,
2014). Agnew (2005) identified three categories of strain: failure to
achieve positive goals, the removal of positive stimuli, and the presentation
of negative stimuli. Strain theory posits that each type of strain ultimately
leads to deviance for slightly different reasons. All three types tend to
increase the likelihood that an individual will experience negative emo-
tions in proportion to the magnitude, duration, and closeness of the stress.
Strain characterizes a condition that individuals dislike. The theory argues
that structural strain weakens the ability of normative standards to regulate
behavior (Pratt and Cullen, 2005). Strain creates the need for a convenient
solution to the problem.
Research by Ragatz et al. (2012) is an example of work that explores
psychological traits among white-collar offenders. Their research results
suggest that white-collar offenders have lower scores on lifestyle
criminality, but higher score on some measures of psychopathology and
psychopathic traits compared to nonwhite-collar offenders. Similarly,
McKay et al. (2010) examined the psychopathology of the white-collar
criminal acting as a corporate leader. They looked at the impact of a
leader’s behavior on other employees and the organizational culture

developed during his or her tenure. Narcissistic behavior is suggested
often to be observed among white-collar offenders (Arnulf and
Gottschalk, 2013; Galvin et al., 2015; Ouimet, 2009, 2010).
Galvin et al. (2015) suggest narcissistic organizational identification
as an explanation for behaviors that exploit the organization for personal
benefit. They define narcissistic organizational identification as a form of
organizational identification that features the individual’s tendency to
see his/her identity as core to the definition of the organization. This
is in contrast to conventional conceptualizations of organizational iden-
tification, where the individual sees the organization as core to the
definition of self.
Some theorists believe that authorities can reduce crime by means of
deterrents. Crime prevention (the goal of deterrence) assumes that crim-
inals or potential criminals will think carefully before committing a crime if
the likelihood of detection and/or the fear of swift and severe punishment
are present. According to Comey (2009), deterrence works best when
punishment is swift and certain.
Scholars apply self-control theory in two different directions. First,
the theory proposes that individuals commit crime because of low
self-control. The theory contends that individuals who lack self-control
are more likely to engage in problematic behavior—such as criminal
behavior—over their life course because of its time-stable nature
(Gottfredson and Hirshi, 1990). Second, the desire to control and
the general wish to be in control of everything and everybody might
be a characteristic of some white-collar criminals, meaning that low
self-control can lead to heavy control of others. Desire for control is
the general wish to be in control over everyday life events. Desire for
control is similar to low self-control in terms of behavioral manifesta-
tions and influence on the decision-making power of individuals
(Piquero et al., 2010).
Low self-control finds support in anomie theory. Anomie refers to a
sense of normlessness, which can occur when there is a strong empha-
sis on the desirability of material success and individual achievement
(Passas, 2007; Schoepfer and Piquero, 2006). Benson and Simpson
(2015) suggest that coupled with the cultural themes of success and
endless striving are a cultural uncertainty and confusion about where
the line between acceptable and unacceptable business behavior
is developing.
Slippery slope means that a person slides over time from legal to illegal
activities. Arjoon (2008: 78) explains slippery slope in the following way:
As commonsense experience tells us, it is the small infractions that can lead
to the larger ones. An organization that overlooks the small infractions of its
employees creates a culture of acceptance that may lead to its own demise.
This phenomenon is captured by the metaphor of the slippery slope. Many
unethical acts occur without the conscience awareness of the person who
engaged in the misconduct. Specifically, unethical behavior is most likely to
follow the path of a slippery slope, defined as a gradual decline in which no
one event makes one aware that he or she is acting unethically. The majority
of unethical behaviors are unintentional and ordinary, thus affecting every-
one and providing support for unethical behavior when people uncon-
sciously lower the bar over time through small changes in their ethical
behavior.
Welsh et al. (2014) argue that many recent scandals result from a slippery
slope in which a series of small infractions gradually increase over time.
Committing small indiscretions over time may gradually lead people to
complete larger unethical acts that they otherwise would have judged to
be impermissible.
The slippery slope theory thus suggests an incremental progression
toward serious white-collar crime. The sliding individual experiences no
resistance or reaction, while at the same time starting to gain benefits. An
offender first moves and subsequently removes the borderline between
right and wrong from his or her mind.
White-collar crime tends to occur when individuals are extremely
ambitious on behalf of the organization and on behalf of themselves.
Ambitions have to be linked to opportunities in the organizational
dimension to enable financial crime. Convenience theory suggests that
the link between ambition and favorable circumstances is at its optimal
point when individuals are in their forties. Successful professionals tend
to reach the peak of their career in terms of top positions in their late
forties. Hence, it is no surprise that the average age of convicted white-
collar criminals in Norway is 44 years when they commit financial crime
and 49 years when they go to prison (Arnulf and Gottschalk, 2013;
Gottschalk, 2015; Gottschalk and Rundmo, 2014), in Germany, they
are 47 years old when they go to prison (Blickle et al., 2006), and in the
Netherlands, white-collar criminals are 42 years old when they are pro-
secuted (Onna et al., 2014).
A number of situational factors may influence the tendency toward

crime. Criminogenic tendency, for example, is dependent on the job
situation for the individual (Alibux, 2015). According to Koppen et al.
(2010), offender-focused theories largely ignore the importance of situa-
tions and opportunities in explaining criminal behavior. If the individual
feels own power base threatened, then corporate crime may revitalize the
power base. If the individual feels that he may lose his job, occupational
crime can help compensate for future financial loss. If the individual feels
badly treated, occupational crime may be an option to cause damage to his
employer. In these kinds of situations, criminal behavior might be
explained by hygiene factors as suggested by Herzberg, rather than satis-
fiers such as self-realization as suggested by both Herzberg and Maslow.
Convenience theory argues that it is a convenient option to commit
financial crime. It is a planned behavior (Ajzen, 2014). White-collar
criminals are comfortable with their own choice of illegal actions. Comfort
is the opposite of discomfort. In comfort theory, comfort is characterized
by relief, ease, and transcendence (Carrington and Catasus, 2007).
AN INTEGRATED EXPLANATION OF CONVENIENCE THEORY

The behavioral dimension of crime interacts with the organizational
dimension of crime. For example, executives with narcissistic or psycho-
pathic traits (or both in the dark triad) may search for opportunities to
commit financial crime in difficult situations, while conforming executives
will probably not value opportunities to commit financial crime as attrac-
tive options.
The behavioral dimension of crime interacts with the economic dimen-
sion of crime as well. For example, the fear of falling (Piquero, 2012) finds
causality in situations such as an acute liquidity problem, where executives
perceive financial crime as the only way out of the crises. Profit-driven
crime is thus not only an issue of making even more money. Rather, it is an
issue of survival, and it may be to rescue a sinking ship.
As suggested by Whetten (1989), a theoretical contribution starts by
identifying factors (variables, construct, and concepts) that are parts of the
explanation of the phenomenon. The phenomenon of white-collar crime
finds explanation in the concepts of economics, organization, and behavior.
This is the what-part of our theory.
Whetten (1989) then suggests the how-part, which is how these
concepts are related to each other. Figure 2.1 illustrates six integrated
ECONOMICS
Profitable crime
C E
A B
ORGANIZATION D BEHAVIOR
Concealed crime Acceptable personal deviance
F
Fig. 2.1 A conceptual model of crime occurrence based on convenience theory
relationships between the economic, organizational and behavioral

dimensions. The figure presents a model of white-collar crime occur-
rence, which is explained by convenience theory. Convenience theory
represents the theoretical glue that welds the model together:
A. Financial crime is possible to carry out and hide among legal activ-
ities in the organization. Rational economic behavior implies indi-
viduals who consider self-interest in terms of incentives and
potential costs, where detection and imprisonment are unlikely
but possible costs (Welsh et al., 2014). Economic motivation can
be found in self-centered search for satisfaction and avoidance of
pain (Chang et al., 2005; Gottfredson and Hirschi, 1990; Hirschi
and Gottfredson, 1987, 1989). Profit-driven crime in an organiza-
tional context has a superficial appearance of legitimacy (Benson
and Simpson, 2015) and is easily hidden among other financial
transactions (Füss and Hecker, 2008). Because the economic
model implies that crime is a rational choice, crime rates will drop
when likelihood of detection rises and when punishment becomes
more severe (Pratt and Cullen, 2005). Impulses may play a role in
distorting rational preferences and utility functions for white-collar
criminals (Kamerdze et al., 2014). Crime is often the easiest and
simplest way to goal achievement (Agnew, 2014).
B. Desire for profits and success makes it attractive for individuals to
commit white-collar crime. Profit-oriented offenses can be caused by
both negative and positive circumstances. The motive in situations
of threats might be to protect the interests of the company and
secure survival of the enterprise (Blickle et al., 2006) or to enable

down payments of personal debt (Brightman, 2009). The motive in
situations of positive circumstances might be expansion into more
profitable markets or satisfaction of personal greed, where greed is
desires and perceived needs that will always grow (Bucy et al., 2008;
Goldstraw-White, 2012; Hamilton and Mickethwait, 2006). The
criminal can use illegal profits to seek respect and self-realization at
the top level of Maslow’s pyramid of personal needs.
C. Profession and position in the organization enables white-collar
crime. Opportunity to commit financial crime in an organizational
context is a distinct characteristic of white-collar crime when
compared with other financial crime offenders (Bucy et al.,
2008; Michel, 2008). Executives and others in the elite have an
opportunity to involve themselves in economic crime without any
substantial risk of detection and punishment (Aguilera and
Vadera, 2008; Haines, 2014). Opportunity manifests itself by
legal access, different location, and appearance of legitimacy
(Benson and Simpson, 2015; Pickett and Pickett, 2002). In a
principal-agent perspective, there is an opportunity for the white-
collar individual as an agent to carry out the regular job at the
same time as crime is committed, because the principal is unable
to monitor what the agent is doing, what knowledge the agent
applies, and what risk the agent is willing to take (Chrisman et al.,
2007; Li and Ouyang, 2007; Williams, 2008). Deviant organiza-
tional structure and culture can make it easier to commit financial
crime and reduce the likelihood of detection and reaction
(Dion, 2008; Pontell et al., 2014; Puranam et al., 2014).
D. Conditions in the organization are such that the white-collar crim-
inal can commit financial crime without being perceived as a deviant
person or suspicious person. The position occupied by the individual
in relation to the organization makes it easier to practice and defend
deviant behavior because of ample opportunities to commit white-
collar crime (Sutherland, 1949). Social capital accumulated by the
individual in terms of actual and potential resources, which are
accessible because of profession and position, creates a larger
space for individual behavior and actions that others can hardly
observe. Many initiatives by trusted persons in the elite are
unknown and unfamiliar to others in the organization. Therefore,
white-collar criminals do not expect consequences for themselves
(Adler and Kwon, 2002). Degrees of freedom grow as individuals

climb up the career latter to the top (Heath, 2008). Degrees of
freedom are particularly many when corporate crime is committed
to benefit the enterprise (Bookman, 2008; Hansen, 2009; Reed
and Yeager, 1996; Trahan, 2011; Valukas, 2010). Degrees of free-
dom are also ample when several individuals at the top of the
organization participate and join forces in crime (Ashforth et al.,
2008), and when the organization generally is characterized by an
unethical and destructive business culture (O’Connor, 2005;
Punch, 2003).
E. Acceptance and neutralization of personal deviant behavior make it
easier for the white-collar offender to commit crime. The privileged
individual may feel entitled to carry out illegal acts, for example,
because the acts are means to reach a higher goal. The white-collar
criminal belongs to the elite that make the laws; therefore, he or she
may feel free to violate the laws (Bystrova and Gottschalk, 2015).
The offender notices no damage and no victim. The offender does
not feel sorry for banks or tax authorities. By means of neutraliza-
tion techniques, the offender reduces and eliminates any guilt feel-
ings ahead of and after criminal acts (Sutherland, 1949; Sykes and
Matza, 1957). Denial of injury and denial of victim is possible
because white-collar crime is nonpersonal and without violence
(Benson and Simpson, 2015).
F. Deviant and criminal behavior is absorbed in an organizational
context where it is not noticed. Even if unethical behavior is noticed
and suspicion develops, most internal observers will be more con-
cerned about their own job security than blowing the whistle in
situations where they are not quite sure. Criminal behavior by
privileged individuals might be caused by stress that is perceived
by others as well (Agnew, 2014; Gottfredson and Hirschi, 1990;
Johnson and Graff, 2014; Langton and Piquero, 2007; Pratt and
Cullen, 2005). A privileged person may over time slide on a slippery
slope from legal to illegal actions without really noticing or being
conscious about it (Arjoon, 2008; Welsh et al., 2014). Punishment
appears less likely and less deterrent because crime occurs in profes-
sional life in an organizational context (Benson and Simpson, 2015;
Comey, 2009; Gottfredson and Hirschi, 1990). Executives with an
excessive desire to control others in the organization may be able to
expand their own degrees of freedom by making controlled
employees more passive (Piquero et al., 2010). Organizations lack-

ing norms and common values will not notice or react to criminal
behavior (Passas, 2007; Schoepfer and Piquero, 2006).
The conceptual model shows that there is an economical level, an organi-

zational level and a behavioral level with equally strong and bidirectional
causation among the three. Figure 2.1 focuses on causation as developed
by Gottschalk (2016).
THEORIZING WHITE-COLLAR CRIME CONVENIENCE

The primary contribution of this chapter is to put forth convenience as a
theoretical explanation that underlies existing theory and research on
white-collar crime.Convenience is a complex concept with multiple mean-
ings (Sundström and Radon, 2015). While previous research on crime in
general and white-collar crime in particular has mentioned the role of
convenience, the explicit notion and role of convenience is novel,
and thus does allow the current research to make a novel theoretical
contribution. Ideas presented here are grounded in the existing literature,
while at the same time representing a novel perspective. This chapter
negotiates this arguably difficult tension—offering new theory while
grounding the underlying ideas in the existing literature.
The main theoretical contribution is concerned with the organizational
dimension of white-collar crime. White-collar crime only occurs when the
individual is in the capacity of a professional and in the position of a trusted
and privileged person in an organizational setting. Both the offender-based
and the offense-based perspective of white-collar crime stress the impor-
tance of an organization. The offender-based perspective stresses the pri-
vileged and trusted position of the criminal enjoying authority and
economic power in the organization. The offender has legal access and
resources available for crime. The offense-based perspective stresses the
variety of financial crime opportunities—from fraud via theft and manip-
ulation to corruption—that are available in an organization. In addition,
simple concealment options are available to the white-collar criminal, such
as transactions with other firms in other countries with different banks and
governments.
When Sutherland (1940) coined the term white-collar crime, he
focused on crime in relation to business. A business is traditionally inter-
preted as an enterprise or a firm. We expand business to all kinds of
organizations where people make their living. Some are employers,

but most are employees. Employers as well as employees commit white-
collar crime. The offender commits crime in a professional setting, where
the offender conceals and disguises criminal activities in organizational
work by seemingly law-abiding behavior. The criminal has power and
influence, forms relationships with other persons or professions—both
intra-organizationally as well as inter-organizationally—that protects
from developing a criminal identity, and enjoys trust from other in privi-
leged networks. Both networks and hierarchies are defined as organiza-
tions in this context. While a hierarchy is characterized by a boss and
subordinates, a network is characterized by a center and peripherals.
Politicians and bureaucrats also work in organizations.
In the organizational setting, we find that most individuals struggle for
and reach the peak of their careers when they are between 40 and 50 years
old. Their ambitions are peaking at that age, both personal ambitions and
ambitions on behalf of the business. Ambitions combined with opportu-
nities create a tendency to commit financial crime when other options for
success are less convenient.
Sutherland (1940) implicitly focused on crime in relation to business
when he applied differential association theory suggesting that a person
associating with individuals who have deviant or unlawful mores, values,
and norms learns criminal behavior. While not all offenders became white-
collar criminals after learning through interaction with other persons in
the organization, the organizational environment was perceived by offen-
ders to be suitable for financial crime.
The lack of guilt feeling and the successful application of neutraliza-
tion techniques can be explained by the organizational context. Since
crime is committed within professional activities, the offender may not
consider deviant actions as crime. This is especially the case when the
offender commits crime to benefit the organization in terms of corpo-
rate crime (Bradshaw, 2015). It is also evident when offenders claim to
be followers rather than leaders in crime. As a follower in the hierarchy
or the network, the individual may claim to obey orders, as is customary
for legal activities as well. Loyalty in the organization extends from legal
across the border to illegal activities, without really noticing where the
border line can be found.
Power and influence are characteristics of social relationships among
individuals in business, and abuse of legitimate position power can enable
white-collar crime. Executives have legitimate power over subordinates,
who are to do what they are told. In knowledge organizations (end

product is knowledge) and knowledge-intensive organizations (end pro-
duct is not knowledge), subordinates are normally told what to do, but
not necessarily told how to do it. In traditional manufacturing, subordi-
nates are normally also told how to do it. Subordinates are used to obeying
orders, and executives are used to giving orders in terms of their decisions.
If decisions are made that involve illegal acts, decisions are presented as
orders to be followed by subordinates. If subordinates notice the illegiti-
mate nature of orders from above, they will actively have to deny following
orders, and thereby risk losing their jobs.
Most business organizations are driven by goals. Strategic goals can
include market position, technological position, and alliances. Financial
goals can include turnover, profits, and return on investments. In public
administrations, goals can include response rate, efficiency, effectiveness,
and cases solved. The organization identifies means to reach goals. All
kinds of legal means are identified and put to work. If goals are not
achieved despite tremendous efforts, some organizations lower their ambi-
tions. Other organizations continue their struggle to reach goals and
become aware of illegal means. Objectives are so important that crime
becomes an option. Even before everything else has been tested, some
organizations turn their attention to crime because of convenience.
While white-collar crime is conducted in organizations, it also requires
some form of organizing. Within the organization, white-collar crime is
organized. It may be organized in terms of statement manipulations, fake
invoices, or routines that are purposely changed. Criminal activity can be
carried out in a sub-organization of the main organization.
Criminal activity can be carried out in a sub-organization of the main
organization.
In addition to Benson and Simpson’s (2015) three characteristics of
how white-collar offenses manifest themselves, one more can be added:
1. The offender has legitimate access to the location in which the crime
is committed. Location does not have to be a physical place, it can
just as well be a virtual place, such as a management information
system where the offender has access and is a regular user.
Legitimate access makes crime convenient.
2. The offender is spatially separate from the victim. This opportunity
property is present when it comes to banks and other external
victims. However, the most frequent group of victims may be
employers who suffer loss from crime conducted by people asso-

ciated with the organization (Gottschalk, 2015). For example, a
procurement executive may collaborate with a vendor to submit
fake invoices to the company, then approve payment of the invoice,
and finally share the profit with the vendor. In this case, the offender
is not spatially separate from the victim. The same lack of spatial
separation occurs in cases of embezzlement and some other forms of
financial crime. Spatial separation makes crime convenient.
3. The offender’s actions have a superficial appearance of legitimacy.
Illegal actions are organized and carried out in ways that are as
similar as possible to legal actions. The criminal dimension of actions
is concealed. Superficial appearance of legitimacy makes crime
convenient.
4. The offender has a role of power and influence over other indivi-
duals. Since most white-collar criminals are leaders rather than
followers, and there always is a leader when there is a follower in
crime, the offender tends to have legitimate rights to make decisions
and give orders that others have to obey. Objecting to orders from
superiors or blowing the whistle on superiors may cause harm to
subordinates. Power and influence are characteristics of social rela-
tionships among individuals in business, and abuse of legitimate
position power can enable white-collar crime without causing suspi-
cion or reaction. Power and influence make crime convenient. While
organizations are hierarchies and thus there are more followers than
leaders in each organization as a whole, white-collar criminals tend
to take on leading roles within their areas of responsibility.
A goal-orientation of most organizations, rather than a rule-orientation,

makes objectives more important than means to reach goals. It is left to
trusted and privileged individuals to decide how they perform their duties.
Controls are installed for goal achievements, but not for individual proce-
dures and behaviors.
In summary, there is a need to understand how people work in orga-
nizations, how they cooperate, how they make decisions, and what they
are striving for in organizations, before the organizational dimension of
convenience theory can be further explored.
Theories can provide general insights into a phenomenon such as
white-collar crime. Theories can also provide explanations for empirical
occurrences of white-collar crime. Thus, convenience theory is useful both
ahead of and after experiences have been collected and analyzed.

Convenience theory presents an integrated explanation of white-collar
crime, while at the same time enabling explanations when new white-
collar criminals emerge.
Davis (1971) argues that an interesting theory is one that denies certain
assumptions of their audience. Convenience theory denies differential
association as a significant explanation in the behavioral dimension.
Differential association suggests that criminal behavior is learned in asso-
ciation with those who define such criminal behavior favorably and in
isolation from those who define it unfavorably. Sutherland (1940, 1949,
1983), who coined the term “white-collar crime,” argues in all his works
that the main explanation for deviant behavior among white-collar crim-
inals is differential association. In line with Davis (1971), one of the
reasons convenience theory is interesting is the lack of belief in differential
association as a major factor in explaining white-collar crime, which can
also find support in the Norwegian sample (Arnulf and Gottschalk, 2013;
Gottschalk, 2015; Gottschalk and Rundmo, 2014). Convenience theory
denies the assumption that differential association is a major factor in the
explanation of white-collar criminal behavior. However, differential asso-
ciation is implicitly present since excuses for crime are typically learned in
association with others. Convenient excuses are provided in the behavioral
dimension. It is more convenient to conform with the norms advanced by
or embraced by those with one associates rather than to reject this learning
process from associates.
Convenience theory addresses an important and interesting topic of
misconduct and crime by the elite in society. Convenience theory extends
and advances our understanding in significant ways. Convenience theory
has clear implications for future research in terms of both theoretical and
empirical studies.
INTEGRATING WHITE-COLLAR CRIME THEORIES

Convenience theory integrates a number of theories as listed in Table 2.1.
This chapter has dealt with the topic of white-collar crime and consid-
ered the role of convenience in explaining its occurrence. It has put
forward convenience as a theoretical explanation that underlies existing
theories and research on white-collar crime.
It seems convenient for some trusted and privileged individuals to
commit financial crime to solve their problems and challenges. In a
Table 2.1 Theoretical contributions to convenience in crime

Theoretical Contribution Convenience in Crime
Economical Dimension
Theory of profit-driven crime (Naylor, 2003) Desire for more gain
Theory of goal orientation (Jonnergård et al., 2010) Business ends justify means
Theory of social concern (Agnew, 2014) Desire to help others
Strain theory (Langton and Piquero, 2007) Causes of strain removed
Fear of falling theory (Piquero, 2012) Prevention of disaster
American dream theory (Pratt and Cullen, 2005) Money is success
Theory of crime forces (Leonard and Weber, 1970) Usual way of doing business
Organizational Dimension
Opportunity theory (Benson and Simpson, 2015) Opportunity at work
Institutional theory (Bradshaw, 2015) Opportunity in society
Agency theory (Eisenhardt, 1985) Principal cannot control agent
Behavioral Dimension
Differential association theory (Sutherland, 1983) Learning from others
Rational choice theory (Pratt and Cullen, 2005) Benefits exceed costs
Self-control theory (Gottfredson and Hirschi, 1990) Lack of self-control
Strain theory (Langton and Piquero, 2007) Removal of strain
Deterrence theory (Comey, 2009) No risk of detection
Obedience theory (Baird and Zelin, 2009) Action according to authority
Fear of falling theory (Piquero, 2012) Avoidance of threats
Negative life events theory (Engdahl, 2014) Victim of crime
Slippery slope theory (Welsh et al., 2014) Violation of law not noticed
Neutralization theory (Sykes and Matza, 1957) Denial of wrongdoing
Social conflict theory (Petrocelli et al., 2003) Acceptable for the elite
General Perspectives
Marketing theory (Farquhar and Rowley, 2009) Savings in time and effort
Comfort theory (Carrington and Catasus, 2007) Relief and ease
professional setting, they have favorable circumstances to commit crime

(economic dimension), to conceal crime by giving it an appearance of
legitimacy (organizational dimension), and to justify the crime (behavioral
dimension). Convenience documents itself in the relatively easy opportu-
nity, the relatively easy concealment, and the relatively easy justification of
crime. Therefore, convenience seems to be a common denominator for all
three dimensions in our explanation of white-collar crime.
Although the role of convenience has been considered in previous
research, the notion of convenience in this chapter is novel in the role of
an umbrella term for a general theory of white-collar crime. Therefore, this

chapter makes a novel theoretical contribution.
One important implication of convenience theory is that organiza-
tions are often to blame for occurrences of white-collar crime in their
businesses. While they tend to present themselves as victims, enter-
prises and other organizations hit by white-collar crime have made
crime possible. The organizational dimension of convenience theory
has illustrated how lack of control, excessive degrees of freedom
enjoyed by privileged individuals, goal orientation without attention
to means, and domination in leader-follower relationships have made
white-collar crime an attractive option. Organizations that let privi-
leged and trusted professionals do what they like without transpar-
ency or control should not be surprised that they are hit by abuse in
terms of white-collar crime. When white-collar crime occurs, victims
can be found externally, such as customers, banks, and state revenue
services. Since the organization allows crime to occur, then the
organization is also an offender toward victims such as customers,
banks, and state revenue services. Rather than claiming that they are
victims of crime, organizations emerge as offenders since they allow
crime to happen.
As suggested by Byron and Thatcher (2016), building a good theory
requires a number of exercises such as (1) writing a paragraph explaining
the basic idea and why it is important, (2) creating a visual representation,
where relevant, of what the model looks like, (3) explaining the idea
verbally, (4) creating an annotated bibliography of approximately fifty
articles that explains how each article relates to the idea; (5) developing
a set of propositions; and (6) writing a draft that outlines the basic logic of
the model. As documented above, convenience theory is on its way to
becoming a relevant theory. Convenience theory can stimulate discussion
and debate on the overall significance of convenience as a perspective to
understanding the endlessly complex phenomenon of white-collar crime.
However, in theory development it is always important to be challenged to
foster discussion and debate concerning even better explanations of white-
collar crime.
The core claim is that the concept of convenience can be applied to our
understanding of the dynamics of white-collar crime in a way that
advances our insights into this phenomenon. As the term is applied here,
it could be regarded as a synthesis of dimensions of motivation, opportu-
nity, and the absence of a capable guardian to explain why white-collar
crime occurs. White-collar crime is viewed as arising not so much out of

strong motivational forces and clearly articulated justifications, but more
in a kind of default mode—why not?—or as a path of least resistance mode
of conduct for an achievement leading to white-collar crime.
The concept of convenience suggests that white-collar crime occurs
with an almost total absence of consideration of morality and ethics (or a
violation of trust) and as a careful calculation of potential costs of engage-
ment in white-collar crime (i.e., the assessment of risk). The invocation of
the notion of a slippery slope or incremental involvement in white-collar
crime seem to align with the convenience concept as a result of the why-
not question.
We have noted that ambition tends to peak for most individuals when
they are in their forties, and this is correlated with involvement in white-
collar crime This does not imply that white-collar crime is driven by
ambition. Rather, white-collar crime is a default mode that is more fre-
quently applied at higher levels of ambition (or quite specific and ambi-
tious goals). It is a path of least resistance with little or no considerations
of misconduct. Again, white-collar crime emanates out of convenience.
CHAPTER 3
Reports of Investigations
Abstract Samples of reports of investigations from the USA and

Norway are presented in this chapter. Fraud examiners write reports of
investigations after they have examined white-collar crime suspicions in
organizations. Both the US sample and the Norwegian sample of fraud
examination reports provide strong support for convenience theory. In
all cases where white-collar criminals were convicted to prison, we find
evidence of the economical dimension, the organizational dimension as
well as the behavioral dimension.
Keywords fraud examiner investigation report United States Norway
INTRODUCTION
Reports of investigations by fraud examiners are typically written at the
final stage of private investigations. Reports are handed over to clients
who pay for the work. Reports are seldom disclosed so that the public
never learn about them. Reports are often protected by the attorney–client
privilege, when investigating firms are law firms. Therefore, it is quite a
challenge to identify and obtain a sample of investigation reports to
empirically evaluate and test convenience in white-collar crime. It is not
easy to get access to private investigation reports for research.
This chapter documents findings from a sample of reports acquired in
the USA as well as a sample of reports acquired in Norway. The samples

DOI 10.1007/978-3-319-44986-9_3
are the result of nonprobability purposive sampling, and thus I cannot

confidently claim they represent all private investigations in neither the
USA nor Norway. At the same time, the method of obtaining the reports
included enough versatility in identifying the private investigation cases
where investigators wrote reports, and seeking out these reports. Methods
of identifying and obtaining reports included media coverage, digital
searchers, tips from friends and colleagues, and student searches.
Therefore, the samples can serve as tentative ways to get an approximate
idea of the variety of white-collar crime suspicions being first detected or
further investigated by private fraud examiners. However, it is important
to keep in mind that the samples represent nonprobability purposive
sampling of a small number of cases that got investigated and that were
accessible.
CHARACTERISTICS OF FRAUD EXAMINATION REPORTS

Reports of investigations vary in length. In the following samples, the US
reports range from 12 pages to 874 pages, while Norwegian reports range
from 4 pages to 555 pages. The shortest ones are typically summary
reports or reports from very limited investigations.
A typical example of an investigation report is the report of investigation
regarding procurement practices at the Office of the Chief Technology
Officer (OCTO) of the District of Columbia. The report was written by
law firm Sidley Austin LLP in Washington, DC, and submitted by the
Committee on Government Operations and the Environment at the
Council of the District of Columbia by councilmember Mary Cheh.
The report by Sidley (2010) consists of 60 pages with the following
table of contents:
I. Introduction and executive summary

II. Scope of investigation
III. Background
IV. Findings concerning the execution of Acar’s schemes
V. Findings on procurement and related vulnerabilities
VI. Recommendations
VII. Appendix
Focus in the report is on Yusuf Acar, a mid-level manager at OCTO who was
arrested in 2009 for fraud related to procurement improprieties. The report
3 REPORTS OF INVESTIGATIONS 35
documents the private investigation into Acar’s procurement fraud at OCTO

as well as recommendations for changes to the controls and procedures
designed to assist in preventing fraudulent conduct of the type committed
by Acar. The investigation did not actively seek to determine whether similar
types of fraudulent activity were still taking place at OCTO. Nor did the
investigation seek to determine the guilt or innocence of any of the partici-
pants in Acar’s scheme. Those issues were addressed by the US Attorney’s
Office for the District of Columbia.
Reports of investigations vary both in length and in quality. Some reports
are ill-structured and difficult to read. Other reports communicate messages
very well to readers. Reports contain information that readers have to
transform into knowledge by understanding sentences and chapters.
SAMPLE OF REPORTS FROM THE USA

In the spring of 2015, while teaching financial crime investigations at
Henry C. Lee College of Criminal Justice, it was possible to identify and
obtain a total of 13 fraud examination reports as listed in the table. The
listed reports are concerned with a variety of issues such as the ignition
switch failure at General Motors and the collapse of the bank Lehman
Brothers as well as the collapse of Enron and WorldCom. Table 3.1 lists
the case, the investigator, suspicion, and number of pages in the report.
SAMPLE OF REPORTS FROM NORWAY

In the spring of 2014, while teaching leadership and financial crime at BI
Norwegian School of Management in Oslo, Norway, it was possible to
identify and obtain a total of 40 fraud examination reports as listed in
Table 3.2. The listed reports are concerned with a variety of issues such as
embezzlement by the chief executive officer in a church foundation and
corruption in building maintenance in a municipality.
ANALYSIS OF REPORTS FROM THE USA

Only 5 out of 13 fraud examinations from the USA can be linked to white-
collar crime, where one or more white-collar criminals were convicted to
prison in each case. These five investigation reports are listed in Table 3.3.
The table applies convenience theory to the US sample of investigation
reports. The first case is concerned with Yusuf Acar, who was convicted to
Table 3.1 Sample of US reports of investigations by fraud examiners

# Case Investigator Suspicion Pages
1 Acar Sidley (2010) Bribery, conspiracy, 60

Manager at DC’s office Law firm money laundering,
of technology and conflict
of interest
2 Coatesville BDO (2014d) Missing income 54
School district Auditing firm statements and
superintendent and improper expenses
director
3 Enron Powers et al. (2002) Accounting fraud by 218
Energy company Committee top executives in the
collapse company
4 General Motors Valukas (2014) Failure not reported 325
Ignition switch failure Law firm and ignored by
executives to
maximize profits
5 Lehman Brothers Valukas (2010) Bad and fraudulent 229
Bank collapse Law firm decision-making by
executives caused
confidence loss
6 Motorola SEC (2002) Senior official 12
Telecommunications Securities selectively disclosed
company’s results Commission inside information
about the company’s
sales
7 Padakhep Inspector General Acts of 32
Bangladesh (2012) misappropriation and
non-government Official a fraud scheme by
organization recipients
8 Peregrine Berkeley (2013) How former CEO 160
Financial group CEO Research group conducted fraud and
caused company
failure
9 Philadelphia Pennsylvania (1974) Police corruption and 874
Police department Commission misconduct in law
enforcement
10 Sandstorm PwC (1991) Money laundering and 50
Bank of Credit and Auditing firm illegal transfers of
Commerce funds from Bank of
International India
Table 3.1 (continued)

11 Walters WilmerHale and PwC Theft of tax refunds by 126

Tax assessment (2008) Law firm cashing returned
manager in District of checks and
Columbia depositing into own
bank accounts
12 Wildenthal Breen and Guberm. Spending of university 365
Director at University (2012) Law firm funds for personal
of Texas Medical travel and
Center entertainment
13 WorldCom Wilmer and PwC CEO involved in 345
Telecommunication (2003) Auditing fraud, conspiracy and
company bankruptcy firm filing of false
documents with
regulators
prison for bribery, conspiracy, money laundering, and conflict of interest

related to procurement improprieties. He exploited his position within the
security division at the District of Columbia’s Office of the Chief
Technology Officer. In terms of convenience, Acar found it convenient
to solve his problems in the economical dimension by means of white-
collar crime. His problem or threat was that he had lost money as one of
the owners of an information technology firm. He never got paid when he
transferred his stocks to someone else. To compensate for his previous
loss, he found it convenient to recover the loss by abusing his new position
as a manager at DC’s office of technology (Sidley, 2010).
In the organizational dimension, Yusuf Acar went into a criminal
partnership with vendors. An important partner in crime was Sushil
Bansal, the president and chief executive of a local vendor, Advanced
Integrated Technology Corporation. Their fraud scheme grew more and
more, reflecting that Acar and Bansal’s growing confidence that there were
no mechanisms in place to detect their fraud. The initial scheme was a
basic kickback procedure. Bansal’s company had been awarded a contract
to provide temporary contractors to the security division. Bansal had
tendered a number of candidates, but Acar had rejected them as unqua-
lified. After failed attempts to place Bansal’s people, Farrukh Awan, a
contractor, approached Acar and proposed the following: Acar would
independently locale qualified candidates for the security division and
Table 3.2 Sample of Norwegian reports of investigations by fraud examiners

1 Adecco nursing home Wiersholm (2011) Work climate violation 23

2 Ahus hospital maps PwC (2013a) Procurement fraud 15
3 Andebu municipality BDO (2014a) Executive roles abused 23
4 Betanien foundation BDO (2014b) Embezzlement 10
committed
5 Briskeby sports Lynx (2011) Construction fund 267
abused
6 Eckbo foundation Thommessen (2009) Foundation fund abused 119
7 Fadder foundation BDO (2011) Documentation falsified 46
8 Military contracts Dalseide (2006) Procurement corruption 184
9 Furuheim foundation Hald (2006) Building fund abused 164
10 Gassnova controls BDO (2013a) Procurement abused 27
11 Hadeland broadband PwC (2014a) Embezzlement 32
committed
12 Hadeland energy PwC (2014b) Embezzlement 25
committed
13 Halden ice hall KPMG (2012) Construction funds 121
abused
14 Halden municipality Hjort (2013) Manager bribed 46
15 Hordaland police Wiersholm (2015) Whistleblower harrassed 111
16 Kraft & Kultur Ernst & Young Accounting manipulated 31
(2012)
17 Kragerø boating Deloitte (2012) Leader overpaid 109
18 Kvam Auto Wikborg (2015) Private expenses covered 93
19 Langemyhr building PwC (2008a) Municipality overbilled 27
20 Lindeberg nursing Kommunerev. Assault committed 92
(2013)
21 Lunde bankruptcy Vierdal (2012) Funds disappeared 86
22 Moskva School Ernst & Young Private expenses covered 52
(2013a)
23 NFF soccer players Lynx (2012) Sport clubs mislead 48
24 NIF sports players BDO (2014c) Sport clubs bribed 4
25 Norsk Tipping betting Deloitte (2010) Funds wrongly 61
transferred
26 Omsorgsbygg Spain PwC (2009) Funds abused 92
27 Oslo Vei bankruptcy Kvale (2013) Funds wrongly 53
transferred
28 Romerike water Distriktsrevisjon Assets privatized 555
(2007)
29 Samferdselsetaten PwC (2007) Department bribed 88
30 Skjervøy fisheries KomRev (2015) Assets abused 138

31 Stangeskovene owners Ernst & Young Stock transfer prevented 103

(2013b)
32 Stavanger Turkey PwC (2013b) Public money abused 13
33 Sykehuset hospital Haavind (2011) Executive power abused 15
34 Terra Rana funding PwC (2008b) Funds disappeared 52
35 Troms Kraft energy Norscan (2013) Funds abused 38
36 Undervisningsbygg I Kommunerev. Project manager bribed 30
(2006a)
37 Undervisningsbygg II Kommunerev. Property manager 44
(2006b) bribed
38 Verdibanken funds Wiersholm (2012) Stroh man abused 5
39 Videoforhandlere BDO (2013b) Subsidy misdirected 20
40 World Ventures Stiftelsestilsyn (2014) Pyramid scheme 17
allow Bansal to hire those individuals. Bansal would then offer the candi-
dates to Acar, and Acar would approve them. In exchange, Acar and Awan
would receive a kickback from Bansal for part of the value of each contract.
Over time, Awan’s role was phased out, while Bansal and Acar continued
the arrangement on their own (Sidley, 2010).
In the behavioral dimension, Acar explained that from his perspective,
the arrangement provided him with a bonus payment for hiring indivi-
duals he would have hired anyway, and had the additional benefit of
allowing him to do his job at OCTO more effectively by retaining more
competent contractors (Sidley, 2010).
The second case in the table is Enron, which is a world-famous case of
white-collar crime. Powers et al. (2002) wrote a report of investigation
about the Enron scandal. In the economical dimension, the threat of
corporate collapse made crime a convenient option. The crime consisted
of restating financial statements for the period from 1997 to 2001.
Furthermore, Enron employees were enriched by tens of millions of dollars
they should never have received—Andrew Fastow by at least $30 million,
and Michael Kopper by at least $10 million. Some accounting transactions
were implemented to offset losses. They allowed Enron to conceal from the
market very large losses resulting from Enron’s merchant investments by
creating an appearance that those investments were hedged—that is, that a
third party was obligated to pay Enron the amount of those losses—when in
40
Table 3.3 Convenience theory applied to the US sample of investigation reports

# Case ECONOMICAL DIMENSION ORGANIZATIONAL BEHAVIORAL DIMENSION
Threat or possibility as motive for DIMENSION Personal acceptance of criminal
crime Opportunity in trusted position to activity
commit crime
1 Acar Acar had lost money as owner of Acar perpetrated a wide-ranging Acar had a deal with vendors that
Manager at DC’s a firm. He found it fraud involving technology he expected never would be
office of technology convenient to recover his contracts by favoring certain detected. He ran operations
Sidley (2010) law loss by abusing his new vendors. As security officer, so efficiently that no real loss
firm position he could monitor all other was caused
activities
EXPLAINING WHITE-COLLAR CRIME
3 Enron It was important for top Top management manipulated Top management found they
Energy company management to show a accounting figures and could justify financial
collapse successful and profitable created fake transactions statements and found
Powers et al. company to the stock market between entities to make it themselves eligible to large
(2002) committee and their friends look as though the company payments
was profitable
9 Philadelphia Police officers were not very well Organized criminals found it Taking bribes from organized
Police department paid, so they found it useful to bribe police officers, criminals to look the other
Pennsylvania convenient to supplement since they represented law way was very common in the
(1974) their income with bribes enforcement that could create police force. Everybody did it
Commission from organized criminals obstacles for their gambling to some extent, and it had
and prostitution businesses become regular practice
# Case ECONOMICAL DIMENSION ORGANIZATIONAL BEHAVIORAL DIMENSION
Threat or possibility as motive for DIMENSION Personal acceptance of criminal
crime Opportunity in trusted position to activity
commit crime
11 Walters She wanted to help family, When tax returns were issued to People were dead anyway, so
Tax assessment friends, colleagues and people who in the meantime there were no victims. Also,
manager in District herself to a better standard of had died, she could cash the she found the tax
of Columbia living checks herself. It was her administration inefficient and
WilmerHale and responsibility to handle tax bureaucratic
3
PwC (2008) law returns in the tax

firm administration
13 WorldCom Ebbers wanted to acquire all He initiated false and His narcissistic trait was based on
Telecommunication kinds of properties based on unsubstantiated accounting previous success with
company bankruptcy substantial loans from banks entries to create a stock value WorldCom and as a private
Wilmer and PwC that could support his loans businessman
(2003) Auditing
firm
REPORTS OF INVESTIGATIONS
41
fact that third party was simply an entity in which only Enron had a
substantial economic stake. Thus, in the organizational dimension, Enron
was able to report earnings that were almost $1 billion higher than should
have been reported. In the behavioral dimension, top executives found that
they could justify deviant financial statements, and they found that they
personally deserved large payments. Executives included Kenneth Lay,
Jeffrey Skilling, Richard Causey, and Richard Buy, in addition to Fastow
and Kopper.
The Pennsylvania (1974) commission uncovered evidence of systematic,
widespread corruption at all levels of the police department. Their report
documents the police corruption problem and suggests some possible
measures for its eradication. Several police officers lost their jobs, and
some went to prison. The report of investigation documents financial
crime involving police officers ranging in rank from policeman to inspector.
Specific acts of corruption involving improper cash payments to the police
by gamblers, racketeers, bar owners, businessmen, nightclub owners, after-
hours club owners, prostitutes, and others. In the economical dimension,
police officers were not very well paid and thus supplemented their income
by corruption. Rather than confronting powerful criminals, it was more
convenient to accept bribes and not challenging crime. In the organiza-
tional dimension, police officers represented an obstacle for organized
criminals which it was wise to bribe to keep them away from doing law
enforcement work. In the behavioral dimension, everyone else did it,
ranginging in rank from policeman to inspector.
Walters is the fourth case in the table. On September 15, 2008,
Harriette Walters pleaded guilty to federal charges related to the theft of
over $48 million on District of Columbia funds. Walters was a former
long-time employee and low-level manager in the real property tax admin-
istration of the office of tax and revenue, a division of the office of the chief
financial officer in the District of Columbia. In the economic dimension,
Walters supported a number of poor family members and friends with
money from her crime. Therefore, an additional 10 individuals pleaded
guilty in connection with her scheme. In the organizational dimension,
she was handling tax refunds. She was able to process fake refunds, and
waive penalty and interest charges in exchange for gifts and cash. In
particular, she was able to cash refund checks that were returned to the
tax administration when taxpayer recipients had died. Her embezzlement
scheme also included issuance of fraudulent real property tax refund
checks. The fraudulent refund requests appeared on the surface to be
legitimate. The requisite vouchers attached what seemed to be valid

supporting documentation containing property descriptions and proof of
tax payments. But the documentation often did not relate to the proper-
ties or property owners identified for the refund. Instead, supporting
materials were frequently copied from legitimate tax refunds for unrelated
properties or were simply fabricated. In the behavioral dimension,
Harriette Walters helped other people out. She felt she was helpful to
family and friends, and also to colleagues, when they had financial pro-
blems. She argued she did good deeds. She was cynical in viewing her
employer as an inefficient government bureaucracy (Wilmer Hale and
PwC, 2008).
The fifth and final US case is WorldCom investigated by Wilmer and
PwC (2008), where CEO Bernard Ebbers had to go to jail. Other
involved top executives at WorldCom included Scott Sullivan, David
Myers, Buford Yates, and Mark Abide. In the economic dimension,
Ebbers acquired personally real estate ventures, hotels and other kinds of
property. He had purchased the largest working cattle ranch in Canada,
and approximately 540,000 acres of timberland in four southern US
states. The total scope of Ebbers’ non-WorldCom businesses was sum-
marized to include a Louisiana rice farm, a luxury yacht building company,
a lumber mill, a country club, a trucking company, a minor league hockey
team, an operating marina, and a building in downtown Chicago. To buy
all these properties, he had accumulated substantial debts with a number
of banks. Ebbers took out more and more loans from commercial banks.
Many of these loans were margin loans secured by shares of Ebbers’
WorldCom stock. Although the terms varied among various margin
loans, each required that the value of Ebbers’ stock remained greater
than or equal to some multiple of the amount of the loan.
Therefore, CEO Ebbers had to make sure that WorldCom stock prices
were high, and much higher than real accounting justified. The massive
indebtedness left Ebbers exposed to decline in the price of WorldCom
stock. Ebbers initiated more than $9 billion in false or unsupported
accounting entries in WorldCom’s financial systems in order to achieve
desired reported financial results to boost the WorldCom stock value.
Most of WorldCom’s people did not know it was occurring. In the orga-
nizational dimension, Ebbers was able to initiate and conceal the false
entries. The fraud was the consequence of how Ebbers ran the company.
He was the source of the culture, as well as much of the pressure, that gave
birth to the fraud. That the fraud continued as long as it did was due to a
lack of courage to blow the whistle on the part of others in WorldCom’s

financial and accounting departments (Wilmer and PwC, 2008).
In the behavioral dimension, Ebbers had strong narcissistic tendencies.
He had grand images of himself both as an executive and as a private
businessman. He found he deserved to spend a lot of money on himself.
Ebbers had a very expensive lifestyle. WorldCom had tremendous success
under the leadership of Ebbers in the past. When things got bad, Ebbers
presented a substantially false picture to the market, which he felt entitled
to do (Wilmer and PwC, 2008).
ANALYSIS OF REPORTS FROM NORWAY

Only 8 out of 40 fraud examinations Norway can be linked to white-collar
crime, where one or more white-collar criminals were convicted to prison
in each case. These seven investigation reports are listed in Table 3.4.
The table applies convenience theory to the Norwegian sample of
investigation reports. The first case is concerned with Are Blomhoff,
who was convicted to prison for embezzlement. He was a priest and a
trusted CEO in the Betanien church foundation. While establishing a
nursing home run by the Christian foundation in Spain, he transferred
some of the money from Norway to Spain to his private bank account in
Spain. He spent the money on his own housing project in Spain as well as
on parties with guests and prostitutes in Spain (BDO, 2014b).
In the economical dimension of convenience theory, Are Blomhoff had
a strong desire for a personal real estate in Spain as well as enjoyed sex with
paid younger women. He felt strongly attracted to spending some of the
foundations money on private parties where some of his trusted colleagues
participated. He felt a desire to establish himself in Spain with a completely
different lifestyle than at home in Norway (BDO, 2014b).
In the organizational dimension, Blomhoff was completely in charge of
all activities in Spain as well as all money transfers from Norway to Spain
related to the new nursing home. Nobody was required to approve his
transactions, and nobody were granted insight into his transactions. The
board at the Christian foundation had complete trust in him as the chief
executive and as a priest (BDO, 2014b).
In the behavioral dimension, the priest regrets what he has done. He
blames his lack of self-control when phased with opportunities for fun and
parties in the sunny and warm Spanish environment. He admits to wrong-
doing and applies no neutralization techniques. Blomhoff believes that his
completely different lifestyle in Spain as compared to his lifestyle back

home in Norway can be explained by his desire to experience new adven-
tures he never could allow himself at home (BDO, 2014b).
The second case in the table is the Furuheim foundation. Both Leif
Walle and Knut Gausi were convicted to prison sentences for embezzle-
ment. In the economical dimension, both Walle and Gausi had their own
companies that could supply construction and maintenance services. They
wanted to make more profits in their own businesses. In the organizational
dimension, as board members of the foundation, they were able to allocate
work to their own companies. In the behavioral dimension, they had
experienced learning in the construction and maintenance business that
contracts could be obtained in various ways. One way was to be in a
double position of both vendor and customer (Hald, 2006).
Hadeland Broadband was a subsidiary of Hadeland Energy. Both were
investigated by fraud examiners from PwC (2014a, 2014b). Lars Brorson
worked first in the accounting department of the mother company and
later as the chief financial officer in the daughter company. He was
completely in charge of all money transfers between mother and daughter
as well as between daughter companies. He used this opportunity for
embezzlement. His economic motive was an expensive lifestyle that was
not sufficiently supported by his regular income. His motive was also to
impress his girlfriend financially. He bought expensive bottles of cognac,
several cars, and a cabin in the mountain, in addition to a new house. In
the organizational dimension, we had complete authority to transfer
money between a number of accounts. Some of the money he transferred
to his own private account. In the behavioral dimension, Brorson blamed
lack of control and poor auditor work for his crime. He said he would
never have committed financial crime if there had been proper internal
control mechanisms and if the auditor had questioned some of his transac-
tions. But the auditor never did.
Case labeled 21 is a bankruptcy case. Johannes Lunde was extremely
ambitious, and he started up a number of companies in various business
sectors without a solid financial foundation. Lunde and his companion
Morten Arnold Berg were sentenced to prison after the collapse of the
Lunde empire. In the economical dimension, Lunde with the help of Berg
wanted to create a business empire of a conglomerate involved in produc-
tion and transportation of various goods and services. In the organiza-
tional dimension, Lunde and Berg were the only ones who had the power
and the overview to manipulate economic performance reports. When
46
Table 3.4 Convenience theory applied to the Norwegian sample of investigation reports
# Case ECONOMICAL ORGANIZATIONAL DIMENSION BEHAVIORAL
DIMENSION Opportunity in trusted position to commit DIMENSION
Threat or possibility as motive crime Personal acceptance of criminal
for crime activity
4 Betanien foundation Opportunity for private real CEO was in complete control over Lack of self-control made his
BDO (2014b) estate and parties with money transfers from Norway to desire for adventure
prostitutes Spain
9 Furuheim foundation Their own corporate As board members they were able to They had learned in the
Hald (2006) enterprises needed allocate lucrative contracts to their maintenance business
more business to own enterprises
EXPLAINING WHITE-COLLAR CRIME
become profitable
11 Hadeland broadband He wanted to impress his He was alone in charge of money He blamed lack of control
PwC (2014a) new girlfriend with a transfers between subsidiaries and poor auditing work
luxury lifestyle
12 Hadeland energy PwC He wanted to impress his He was alone in charge of money He blamed lack of control
(2014b) new girlfriend with a transfers between subsidiaries and poor auditing work
luxury lifestyle
21 Lunde bankruptcy Desire to develop a A number of acrobatic financial Lunde blamed banks for
Vierdal (2012) business empire in the transactions in the conglomerate having caused bankruptcy
shortest time possible of companies
28 Romerike water Ambition to become a hero Controlled and threatened individuals Found that he deserved
Distriktsrevisjon locally and rich abroad to comply with his instructions admiration as well as
(2007) benefits
# Case ECONOMICAL ORGANIZATIONAL DIMENSION BEHAVIORAL
DIMENSION Opportunity in trusted position to commit DIMENSION
Threat or possibility as motive crime Personal acceptance of criminal
for crime activity
36 Undervisningsbygg I Suppliers were his friend It was accepted in the organization He found that the
Kommunerev. (2006a) with whom he entered that Nettli was not competent in organization was so
into a fraudulent formalities and procedures and inefficient that it did not
3
scheme of kickbacks thus ignored them really matter

37 Undervisningsbygg II Murud was so greedy that Lack of approval control made him He blamed Undervisningsbygg
Kommunerev. (2006b) he wanted more cars, exceed his approval limit for for not having proper
larger house, and invoiced that were fake controls of employees’
bigger boat financial transactions
REPORTS OF INVESTIGATIONS
47
banks finally found out, then Lunde blamed bank executives in the beha-
vioral dimension. Lunde blamed them for having caused the collapse of his
empire. If banks had continued their support of the Lunde Group, Lunde
was convinced that his empire would transform into profitable businesses
(Vierdal, 2012).
Ivar Thorer Henriksen was the CEO of publicly owned water supply
company. He did a lot of good deeds for his local community. For
example, the company built a water fountain outside a nursing home.
For his local involvement, he was honored by the King of Norway. At the
same time, he spent money on a farm in South Africa, where he vacationed
with his family and friends. The farm was purchased with company money.
He spent company money on his son, and he got into kickback schemes
with suppliers. When subordinates questioned his decisions, he threatened
them and told them that nobody would believe them because he was a
local hero. In the economical dimension, his ambitions were both related
to become a local hero by spending company money in the community
and also to have an exciting life hunting wild animals on the farm in South
Africa. In the organizational dimension, he was an extremely powerful and
respected chief executive. He did not conceal his illegal transactions
among legal transactions. Instead, he expected those who knew would
accept his decisions. In the behavioral dimension, his narcissistic traits
were quite visible in that he looked down on others and got confirmed
by the king that he was very special indeed. He found it natural to
combine his status as a hero with some illegal benefits for himself
(Distriktsrevisjonen, 2007). Henriksen was sentenced to 8 years in prison,
his son was sentenced to 4.5 years in prison, and two more accomplices
were sentenced to 4 years and 10 months, respectively.
The final two cases in the table are concerned with two different
executives who worked for the school administration in Oslo, the capital
of Norway. One was a project manager, while the other was a property
manager. Harald Gunnar Nettli was the project manager who went into a
kickback scheme with his friends in supplier firms. In the economical
dimension, both his friends and he himself were attracted to more income
as a status symbol rather than as a need for more personal expenditures. In
the organizational dimension, Nettli did not really have executive powers.
But he was known in the organization for not being very concerned with
formalities, and there was an acceptance in the organization that he did
not follow routines and standard procedures. In the behavioral dimension,
Nettli blamed lack of control and lack of auditing for enabling him to
commit fraud in the organization. He argued that a more efficient work

environment would have prevented him from financial crime. He almost
made his employer responsible for his crime (Kommunerevisjonen,
2006a).
Frank Murud was the other white-collar criminal at Undervisningsbygg
in Oslo. He was an easy-going manager who was very well liked by all
others in the organization. He was the last who would be suspected of any
wrongdoing. Unfortunately, he had a strong desire for material goods. He
bought a house in the most expensive part of the city; he bought himself
several new cars, and be bought an expensive cabin cruiser. He told his
wife that he was extremely successful in betting. The truth was that he
made his friends send invoices to Undervisningsbygg that he approved.
Then they shared the profit. His approval limit was only the equivalent of
$30,000, but he quickly found out that nobody noticed that he exceeded
his approval limit. In the economical dimension, Murud was a typical
example of greed, where greed implies that you never can get enough.
In the organizational dimension, Murud found out that he could alone
approve invoices far exceeding his approval limit. In the behavioral dimen-
sion, he blamed lack of control, just like Nettli did. Murud argued that an
organization should be able to control financial activities of all employees.
Since Undervisningsbygg had failed at this task, Undervisningsbygg,
rather than himself, was to blame for the fraud (Kommunerevisjonen,
2006b).
CHAPTER 4
Economical Convenience
Abstract The economical dimension of convenience theory argues that a

financial motive triggers white-collar crime. A financial motive can be
greed, fear of falling, fear of bankruptcy, status desire, American dream
or other temptations, and threats. In this chapter, evidence of economical
convenience can be found in a number of white-collar crime occurrences
as presented in reports of investigations.
Keywords crime motive hierarchy of needs self-realization admiration
INTRODUCTION
The first dimension of convenience theory is concerned with the motive
for white-collar crime. Motives can be derived from both positive and
negative triggers. Examples of positive triggers include fame, respect,
status, and wealth. Examples of negative triggers include debt, bank-
ruptcy, and loss of position. In this chapter, we present two cases from
the USA concerned with status ad influence as well as prosperity and
conflict avoidance, respectively, and two cases from Norway concerned
with bankruptcy and greed, respectively.

DOI 10.1007/978-3-319-44986-9_4
US CASE OF KENNETH LAY AND JEFFREY SKILLING AT ENRON

Enron was investigated by Powers et al. (2002). Enron was an American
energy, commodities, and services company based in Houston, Texas. The
company employed 20,000 people in the areas of electricity, natural gas,
communications, and pulp and paper. In the 1990s, the company ran into
financial problems. Enron was in need of a rescue plan. One alternative for
the rescue operation was to sell off subsidiaries and close down unprofitable
business. Another alternative was to let a competing business enterprise take
over Enron to restructure it and merge it with similar activities. A third
alternative was to replace top management with new skills to change product
lines, marketing strategy, and organizational structure. A fourth alternative
was for the failing top management team to commit white-collar crime.
The top management team consisted of Kenneth Lay, Jeffrey Skilling, and
Andrew Fastow. They decided to implement alternative four. This alterna-
tive was considered the most convenient one. By committing white-collar
crime, they believed that they could rescue Enron. They thought the finan-
cial problems were temporary and would disappear after some years. They
thought they might be able to correct their crime when profits would be
flowing in again. They were convinced Enron would recover.
Alternatives one to three were less attractive to them. They had built an
empire that was associated with success, status, and influence. Ken Lay was a
close friend of the Bush family, including the president. Enron made large
campaign contributions to Bush and headed several important committees in
the republican party. In their prestigious positions, it was unacceptable to
Lay, Skilling, and Fastow to hand over the business to others. It was unac-
ceptable to reveal to the environment that Enron was performing poorly.
White-collar crime was thus a convenient option. By presenting finan-
cial results far more favorable than the real situation told them, they were
able to stay on top of a seemingly successful, expanding, and profitable
business enterprise. It was the threat of collapse and bankruptcy that made
white-collar crime a seemingly convenient way out of performance pro-
blems. If the white-collar crime had been successful, then Enron would
have recovered and probably nobody would have learned about the
offense. It would have served to protect Enron’s interests.
Some quotes from the internal investigation report by Powers et al.
(2002) illustrate convience in the economical dimension:
Enron used this strategy to avoid recognizing losses for a time. (P. 14)
4 ECONOMICAL CONVENIENCE 53
One perceived solution to this finance problem was to find outside investors
willing to enter into arrangements that would enable Enron to retain those
risks it believed it would manage effectively, and the related rewards. (P. 36)
On June 18, 1999, Fastow discussed with Lay and Skilling a proposal to
establish a partnership, subsequently named LJM Cayman. Fastow would
serve as the general partner and would seek investments by outside vendors.
(P. 68)
Fastow and Glisan developed a plan to hedge the Rhythms investment by
taking advantage of the value in the Enron shares covered by the forward
contracts. (P. 78)
In late 1999, at Skilling’s urging, a group of Enron commercial and
accounting professionals began to devise a mechanism that would allow
Enron to hedge a portion of its merchant investment portfolio. (P. 99)
It is particularly surprising that the accountants at Andersen, who should
have brought a measure of objectivity and perspective to these transactions,
did not do so. (P. 132)
The Board of Directors was denied important information that might have
led it to take action. (P. 148)
Powers et al.’s (2002) investigation report reveals that it was not only a
threat motive that made white-collar crime a convenient option. Greed
was also present, especially as it related to Fastow:
Andrew S. Fastow, Executive Vice President and Chief Financial Officer of

Enron, is the managing member of LJM1’s general partner. The general
partner of LJM1 is entitled to receive a percentage of the profits of LJM1 in
excess of the general partner’s proportion of the total capital contributed to
LJM1, depending upon the performance of the investments made by LJM1.
(P. 184)
The failure to set forth Fastow’s compensation from the LJM transactions
and the process leading to that decision raise substantial issues. (P. 187)
Unfortunately for Lay, Skilling and Fastow, their white-collar crime was
not successful. It did not solve the problem. Enron went bankrupt, and
the executives went to prison.
While the economical convenience of white-collar crime in the Enron
case is mainly characterized by the need for success and the fear of falling
(Piquero, 2012), the organizational convenience is characterized by
opportunities of advanced manipulation techniques that are available to top

executives (Benson and Simpson, 2015). The behavioral convenience can
be found in a corporate culture dominated by Lay, Skilling, and Fastow
focusing on goals that justify (illegal) means (Jonnergård et al., 2010) and
neutralization of potential guilt feelings (Stadler and Benson, 2012).
US CASE OF POLICE CORRUPTION IN PHILADELPHIA

The Pennsylvania Crime Commission published an investigation report on
police corruption and the quality of law enforcement in Philadelphia. The
report documents evidence of systematic patterns of corruption in
Philadelphia among some police officers. The commission found that police
corruption in Philadelphia was ongoing, widespread, systematic, and occur-
ring at all levels of the police department (Pennsylvania, 1974).
In an economic convenience perspective, it was convenient for police
officers to receive improper cash payments by gamblers, racketeers, bar
owners, prostitutes, illegal construction companies, and others. Since
salaries for police officers were not great, and law enforcement actions
against organized crime was a challenge, it was much more convenient to
cooperate with criminals rather than arresting them. By cooperating with
criminals, police officers made additional money that enabled a slightly
better lifestyle for their families. By cooperating with criminals, police
officers avoided threats, and dangerous situations.
While it was convenient for police officers to receive bribes, criminals at
the same time avoided inconvenience from law enforcement when provid-
ing bribes to police officers (Pennsylvania, 1974: 170):
If the police were to enforce strictly all the laws, ordinances, and regulations
governing the activities of construction companies, it would cause much
inconvenience for the companies involved. Because of pressures to get work
finished, the companies are willing to pay the police and other public
employees to avoid the situation.
Convenience among police officers occurred both in terms of receiving

bribes and in terms of planting evidence to get the wrong person arrested
to protect bribing criminals (Pennsylvania, 1974: 204):
My partner really wanted this guy busted so we went in to search, right. So

my partner conveniently comes up with the pinch.
Patrol by police officers among bribing criminals were scheduled conve-

niently for offenders (Pennsylvania, 1974: 220):
We would call them up or either stop by and see them and let them know
that they would inform us which time was most convenient.
In addition to the convenience of receiving bribes and the convenience of

avoiding confrontations with serious criminals, there was also the conve-
nience of playing along with colleagues in the police force. The occupa-
tional culture in the police was such that police officers better not
challenge the corruption culture. Interviewed police officers told investi-
gators that fraudulent behavior was the rule rather than exception
(Pennsylvania, 1974: 228):
The young officer begins to realize that one who does not participate in
corrupt activities is ostracized. One officer in New York who did not
participate in taking money described the system as follows:
To other police officers your participation (in taking money) was another
strong link in a chain of fraternity and had no reflection whatsoever on your
honesty. Conversely, your refusal meant certain ostracism and a cross-eyed
look as someone not in full possession of all his mental faculties. It cannot be
emphasized enough that taking money was such a tradition, such a habit,
and was so common all around, that the police officers I talked with did not
think of it with any more regard than the habit of smoking—you know it’s
bad for you and you shouldn’t do it, but you do it anyway.
In Philadelphia, police officers have similarly described the peer pres-
sure with which they were confronted. A member of the Philadelphia
police force testified before the Commission that after he noticed vice
activity at certain locations within his sector, he talked to an older
officer who said, “Don’t worry about it, kid; I’ll be taking care of it.
Or you walk a beat.”
Convenience theory is concerned with white-collar crime. It might be

argued that corruption among police officers is not a typical case of
white-collar crime. However, there was a system of weekly payments
based on rank in the police department: policemen received $5, sergeants
received $10, and captains and special vice investigators received $15. The
payments were usually made between the hours of 8 a.m. and 4 p.m.
Criminals made regular payments of a sizeable sum to a large number of
person in exchange for protection against gambling raids and other law
enforcement activities.
Toward the end of their internal investigation report, the Pennsylvania
(1974) crime commission summarizes their corruption investigation
experience. They argue that a corruption investigation of a police depart-
ment is one of the most difficult investigative tasks which any investigatory
agency can undertake. When another law enforcement unit is the target of
the investigation, there are additional problems for the investigators.
Police are very protective of each other, and law enforcement units are
exceedingly reluctant to investigate other law enforcement units.
NORWEGIAN CASE OF JOHANNES LUNDE AT MARINE GROUP

Lunde at Marine Group was investigated by Vierdal (2012). Johnnes
Lunde’s conglomerate of businesses went bankrupt in 2011. Suspicions
of financial crime arose quickly in the main company Marine Group.
Lunde’s conglomerate could best be described as the result of financial
acrobatics. Shortly before the Marine Group had to file for bankruptcy,
Lunde transferred to himself 189 million Norwegian kroner (NOK)
(equivalent of US$24 million) without any board approval.
Lunde had been a very ambitious business man. He was only 42 years
when the bankruptcy kept up with him. He had tried for a long time to
avoid bankruptcy because his empire of businesses had given him status
and prestige, especially in the southwest part of Norway where his firms
were located. His motivation for crime in the economical dimension of
convenience theory can be found in his ambitions to build an empire of
companies involved in transportation, shipbuilding, and other businesses.
He was a high-profile entrepreneur who had emerged as an extremely
successful businessman in his own eyes and in the eyes of others.
Johannes Lunde was sentenced to four years in prison by a court
of appeals in 2015. The chief accountant at Marine Group, Ruth
Karianne Hinna, and the chief operating officer, Morten Arnold
Berg, were also sentenced to prison.
Some quotes from the internal investigation report by Vierdal (2012)
illustrate convience in the economical dimension:
As an introduction, we want to emphasize that the business idea of the

Lunde systems to a large extent was founded on the asset play principle. It is
noted that businesses in the Lunde systems at several occasions were able to
establish agreements that lead to significant profits. Johannes Lunde and his
closest associates managed in several instances to create added values at
impressive levels. (P. 5)
Internal transactions in the Lunde systems have been of a substantial mag-
nitude. So far in our investigation, it is established that management in most
companies, preferably through top executive Johannes Lunde, have mana-
ged company assets and liabilities across business areas, and independent of
what might serve the interests of each company. (P. 7)
Johannes Lunde has been the most central figure in all companies, and the
person who initiated and implemented or told others to implement all
financial transactions in the Lunde systems. (P. 10)
The complicated structure of liabilities between companies in the Lunde
systems made several companies vulnerable to liquidity problems. (P. 28)
NORWEGIAN CASE OF FRANK MURUD AT UNDERVISNINGSBYGG

Murud was investigated by Kommunerevisjonen (2006b). Frank Murud
(born 1955) was sentenced to prison for seven years for corruption and
embezzlement. Murud was property manager at Oslo City school dis-
trict. His motive in the economical dimension of convenience theory was
greed. He just could not get enough of material wealth. His fraud
amounted to NOK 90 million (equivalent of US$12 million). He spent
the money on a noble property in the best neighborhood in Oslo, on
luxury cars and on luxury boats. He really enjoyed all his valuable things
and commodities.
After Murud had been arrested, prosecuted, and sentenced to prison,
he was not very upset about his time in jail, nor was he upset about all the
negative publicity in the media. He did not really care about his family
breaking up and his wife leaving him. All he cared about was all the
valuables taken away from him. He said he would miss his house, his
cars, and his boats. He would not miss his wife, he said.
It had been convenient for him for many years to participate in corrup-
tion and to carry out embezzlement in his position as property manager to
enable him to spend multifold of what he actually earned in his position.
He knew of no other way to satisfy his greed for more and more wealth.
He did not feel bad about it. He blamed lack of controls at his employer
for letting him carry out his fraud scheme. In the organizational
dimension, he was only allowed to approve invoices of minor amounts.

Invoices of larger amounts had always to be approved by two executives or
one executive higher up in the organization. When he asked a friend to
send an invoice of a substantial amount, he then approved the invoice, and
sent it to the accounting department, which reimbursed his friend for the
amount on the invoice. Murud argued in court that because the account-
ing department was so sloppy, they were to blame for his fraud. Therefore,
in the behavioral dimension, Murud applied a neutralization technique of
blaming others for his own crime.
Some quotes from the internal investigation report by
Kommunerevisjonen (2006b) illustrate convience in the economical
dimension:
Another reason why the fraud was not detected was that the additional
resource drain on the maintenance budget did not reduce the magnitude
of planned maintenance. (P. 31)
The chairman of the board received in 2006 a message of concern from
a person who argued that the property manager had too much money
privately to be employed in the public sector. The chairman asked
for a cheque of the property manager. No alarming findings occurred.
(P. 32)
Murud had managed a wide variety of real estate projects for the city of
Oslo at Undervisningsbygg (=Educational Contruction). He earned NOK
500,000 (US$ 70,000) in 2004, but somehow managed to afford a
NOK 10-million villa in the exclusive Holmenkollen district of the city.
He also had a holiday cabin in the mountains at Geilo, two plots and an
apartment in Geilo, an apartment in Lillehammer, and a house in
Fredrikstad. Murud had purchased property worth tens of millions of
Norwegian kroner. He was also an investor in technology company
Birdstep, owning a 5.9 percent stake through shares purchased for NOK
6.6 million. He told friends and family that he was extremely successful in
all kinds of money games and bets.
The fraud employed was reportedly a simple classic, with Murud paying
fictitious bills sent in by his accomplices. Murud then collected most of the
money for this kind of criminal billing service. Murud’s motive for crime
was greed, where greed is socially constructed needs and desires that can
never be completely satisfied.
CONVENIENCE IN THE ECONOMICAL DIMENSION

Maslow suggested that there exists a hierarchy of needs for a person. When
basic needs such as food and shelter are satisfied, then the person moves up
the pyramid to satisfy needs for safety and control over own life situation.
Further up in the pyramid, the person strives for status, recognition, and
self-respect, as illustrated in Fig. 4.1.
Hero
Success
Elite Fame
Opinion Leader
Admiration Respect
Acceptance Reputation
Status Ego Wealth
Power Influence Privileges
Goals Prosperity Challenges
Self-Realization Exploration Freedom
Self-Respect Self-Assured Self-Acceptance
Confidence Safety Community Closeness Care
Security Friendship Predictability Protection
Food Drink Clothes Sleep Varm
Fig. 4.1 Pyramid of needs for white-collar offenders adapted from Maslow
Most individuals will want to move higher up in the pyramid when

needs below are satisfied. However, there are some exceptions. An exam-
ple can be found in law firms, where partners work very long hours and
make a lot of money without reaching very high in the pyramid. Business
lawyers tend to oversatisfy basic needs by owning large houses, several
cars, boats, and shares in companies. They are not very respected and are
not considered leading experts of the law.
The opposite example seems to be that of university professors, who
quickly try to move up the pyramid when basic needs of housing are
satisfied. They struggle to publish in leading research journals to
become famous and associated with a reputation of being leaders in
their fields.
As far as money or other valuable items can help climbing higher in the
pyramid, potential offenders may find white-collar crime convenient if other
options to achieve success are more stressful and require more resources.
Whether the offender wants more at a certain level or wants to climb to
higher levels in the pyramid, financial crime can be a means to the end.
For some white-collar criminals, money is the goal of crime. For other
white-collar criminals, money is a means to a goal of acceptance, influence,
and fame. When we look at our case studies, it seems that:
• Kenneth Lay and Jeffrey Skilling were aiming for success, belonging
to the elite, fame and being business heros. They were at the top of
the needs pyramid.
• Police officers in Philadelphia were aiming for prosperity and wealth.
They were in the middle of the needs pyramid.
• Johannes Lunde in his Marine Group was aiming for acceptance,
reputation, and admiration. He was close to the top of the needs
pyramid.
• Frank Murud at Undervisningsbyggwa aiming for prosperity and
wealth, combined with adminiration and respect. He was above the
middle of the needs pyramid.
CHAPTER 5
Organizational Convenience
Abstract Evidence of organizational convenience can be found among

suspected white-collar criminals as described in reports of investigations in
both Norway and the USA. For example, Yusuf Acar at the chief technol-
ogy office in Washington, DC, had ample organizational opportunity to
hire people in return for kickbacks.
Keywords crime opportunity resource availability legitimate business

concealment
INTRODUCTION
The organizational dimension of convenience theory is concerned with
opportunities to commit white-collar crime. In a professional setting with
privileges based on trust and few or no control mechanisms, it can become
attractive to achieve financial gain in illegal ways. This chapter presents
two cases where the US cases where job positions enabled fraud. This
chapter also presents two Norwegian cases where fraud was easily possible
in areas where the offender had sole authority.
Ahrne and Brunsson (2011) argue that an organization is characterized
by membership, hierarchy, monitor, and sanctions. Organizations decide
about membership, about who will be allowed to join the organization as
employees. Membership brings a certain identity with it, an identity that
differs from that of nonmembers. Organizations include a hierarchy, a duty

DOI 10.1007/978-3-319-44986-9_5
to oblige others to comply with decisions. Hierarchy entails a form of

organized power. Organizations can issue commands and can also decide
upon rules that its members are expected to follow in their actions. An
organization has the right to monitor compliance with its commands and
rules. Organizations have the right to decide about sanctions, both positive
and negative. They can decide to change a member’s status by using
promotions, grading systems, awards, diplomas, and medals.
US CASE OF YUSUF ACAR AT THE CHIEF TECHNOLOGY OFFICE

The Acar fraud involved a series of loosely related fraudulent schemes over
the course of a three-and-a-half-year span from September 2005 to March
2009. While none of these schemes were particularly complex according
to fraud examiners Sidley (2010), they all escaped detection and would
likely have remained undiscovered but for the cooperation of an infor-
mant. Over time, these schemes grew more brazen, reflecting Acar’s
growing confidence that there were no mechanisms in place to detect
their fraud. The initial plan was a basic corruption scheme with kickbacks
from Sushil Bansal. Bansal’s company, AITC, had been awarded a contract
to provide temporary contractors in the security division. Bansal had
tendered a number of candidates, but Acar and his coworkers had rejected
them as unqualified.
After these failed attempts to place AITC contractors, Farrukh
Awan, a contractor who had been offered a full-time position at the
Office of the Chief Technology Officer (OCTO), approached Acar and
proposed the following: Acar would independently locate qualified
candidates for the security division positions and allow Bansal to hire
those individuals as AITC employees. Bansal would then offer the
contractors to OCTO, and Acar would approve them. In exchange,
Acar and Awan would each receive a kickback from Bansal for part of
the value of each contract. Acar explained to Sidley (2010) that from
his perspective, the arrangement provided him with a bonus payment
for hiring individuals he would have hired anyway, and had the addi-
tional benefit of allowing him to do his job at OCTO more effectively
by retaining more competent contractors.
Therefore, in the behavioral dimension of convenience theory, Acar
argued that there was no damage and no victim of his corruption scheme.
In the organizational dimension of convenience theory, Acar had the
5 ORGANIZATIONAL CONVENIENCE 63
opportunity to involve himself in the kickback scheme because he was in a

position at OCTO to hire people.
Over time, Awan’s role was phased out, but Bansal and Acar continued
the arrangement on their own. The next scheme they developed was a
ghost-employee fraud. Under this scheme, AITC either submitted false
timesheets to Acar that inflated the contractor’s actual hours or submitted
timesheets for fictional AITC contractors. In some circumstances, Acar
would identify contracts in the security division that had been awarded to
AITC in which work already had been completed, but the contract remained
open. Acar would approve timesheets submitted by Bansal on those con-
tracts. In exchange for the approvals of ghost employee timesheets, Bansal
would kickback a share of the billings attributable to the ghost employees.
The final form of fraud Acar and Bansal engineered involved the
purchase of software licenses. OCTO approved Acar’s request for the
purchase of 2,000 software licenses, and the contract was awarded to
AITC. Instead of the 2,000 licenses OCTO purchased, however, AITC
delivered only 500 licenses. Acar certified that OCTO received the com-
plete order, and the District paid AITC for the entire contracted amount
(Sidley, 2010).
In order to impede detection of these acts, Acar engaged in several
other improper practices. For example, while working as a district
employee and awarding government contracts, Acar owned an undi-
sclosed interest in Circle Networks, a company that contracted with the
district and which was allegedly used to launder illegal kickback payments
from Bansal to Acar. Acar’s ownership interest in Circle Networks repre-
sented a conflict of interest for a district employee, yet the district never
detected it. Similarly, Bansal created shell companies nominally controlled
by other individuals in order to create an appearance of competitive
bidding on contracts that Acar would award to AITC. Finally, Acar used
the access he had to electronic data in the security division to monitor
emails to and from OCTO leadership to determine whether his activities
were in any danger of being discovered by the Office of the Inspector
General during its audits (Sidley, 2010).
Therefore, Yusuf Acar had ample organizational opportunity to commit
convenient white-collar crime:
• He was in charge of hiring consultants to the security division

• He was in charge of buying software licenses
• He was able to monitor emails by others
OCTO had 231 full-time employees and employed 267 contractors, most
of whom were full-time. OCTO had a long-standing contractor culture
where contractors draw a salary from a third-party vendor that contracts
with the District government. Contractors played a key role in managing
numerous, simultaneous, one-time modernization projects.
Some quotes from the internal investigation report by Sidley (2010)
illustrate convience in the organizational dimension:
Acar told us that the genesis of the first kickback was a 2005 contract for
forensics engineers in the security division. Acar was going to supervise these
engineers, and he was among the OCTO employees with input on the
hiring decisions. (P. 22)
Acar would manipulate the requirements listed in the procurement requests
to direct hiring decisions towards Bansal’s candidates. (P. 23)
Acar and Bansal concocted a plan whereby bills for individuals who had finished
their work at OCTO without exhausting all the allotted hours in the purchase
order would continue to be issued for the remaining time in the contract by
using fraudulent timesheets. (P. 24)
This overbilling scheme evolved into a plan in which Acar and Bansal would
bill the remaining time in the name of individuals who had never even
worked at OCTO. (P. 24)
Acar and Bansal also collaborated to get the agency to overpay for software
purchased by the security division. (P. 25)
In 2009, Acar began monitoring incoming District emails to OCTO
employees to detect any communications from the Office of the Inspector
General. (P. 26)
OCTO’s internal controls failed to detect or prevent Acar’s various fraudu-
lent activities. (P. 27)
Many OCTO employees attribute Acar’s prolonged success to what they
describe as the isolation of the Security Division. Because the Security
Division has access to all District email and telecommunication messages,
OCTO treated the Division differently from its other programs. (P. 30)
For several years before discovery of the fraud, Acar was a key decision-
maker in the hiring of contractors for the security division, which facilitated
his kickback scheme. Moreover, on several occasions he served as acting
program manager of the department, at which time he was able to make
procurement decisions without any careful, third-party scrutiny. Further, as
the acting leader of the group, Acar was able to expand the fraud by
exercising substantial control over the division’s annual budget request.
The lack of external scrutiny prevented these decisions from receiving the
sort of oversight that might have prevented the fraud. (P. 31)
According to the investigation report by Sidley (2010), the internal controls

at OCTO played no role in detecting Acar. Some OCTO employees claimed
that reforms initiated by CTO Kundra adequately addressed the Acar fraud,
and several expressed the belief that these changes actually led to the detec-
tion of the fraudulent schemes. The fraud examiners’ review contradicts those
assessment. Many of the fraudulent transactions took place both during and
after reforms, and Acar himself said to investigators that the reforms did not
meaningfully impede his ability to accomplish his criminal activities.
Sidley’s (2010) investigation focused on identifying the organiza-
tional and institutional vulnerabilities both inside and outside of
OCTO that allowed Acar’s fraudulent activities to escape detection
over a prolonged period of time. The identified vulnerabilities fall into
two general categories. First, Acar exploited several OCTO-specific
deficiencies. Second, at least two broader issues involving procure-
ments throughout the District government allowed Acar and his co-
conspirators to engage in these schemes. Although OCTO and
responded to several of these vulnerabilities after the Acar scandal
became public, investigators argued that there were remaining institu-
tional vulnerabilities to be addressed.
US CASE OF HENRIETTE WALTERS AT THE TAX

AND REVENUE OFFICE
Henriette Walters is a case of economical convenience in terms of helping
friends, family and herself financially. She let friends participate in her frau-
dulent schemes. For example, Walters relied on a long-time relationship with
a local bank teller named Walter Jones. Walters also involved three family
members in the scheme. All three—her brother, nephew, and niece—used
different companies that did not own property in the District of Columbia.
Some quotes from the internal investigation report by Wilmer Hale and
PwC (2008) illustrate convience in the economical dimension:
Jones deposited the fraudulent payments into accounts controlled by

Walters, her family, or her friends. (P. 40)
In early March 2007, Walters created an $85,000 credit on a property

associated with Samuel Earl Pope, Walters’ friend. (P. 47)
Walters apparently provided cover stories to explain her generosity.
According to one rumor, she was from a wealthy family and had inherited
large sums of money, According to another rumor, she had a wealthy
boyfriend or a second job and was good at ‘budgeting’ her money. (P. 60)
Walters’ motive was private money spending for herself, her friends, and
family. Unfortunately, the investigation by Wilmer Hale and PwC (2008: 8)
“did not attempt to trace the stolen money or to determine how the money
was distributed or spent.”
Wilmer Hale and PwC (2008: 2) describe Walters’ scheme, which is
part of the organizational dimension of white-collar crime:
Harriette Walters was a long-time employee and starting in 2001, a low-

level manager in RPTA. As Walters explained to us, she first became
involved in a fraudulent tax refund scheme in the mid-1980s when she
learned from a co-worker how to process fake refunds, how to waive
penalty and interest charges in exchange for gifts and cash, and how to
cash refund checks that were returned to RPTA when the taxpayer reci-
pient had died. According to Walters, she eventually concluded that her
co-worker, whom she described as a substance abuser, was unreliable as a
partner in these activities. Walters then embarked on her own embezzle-
ment scheme in the late 1980s, which focused on the issuance of fraudu-
lent real property tax refund checks. From the late 1980s through late
2007, Walters stole more than $48 million from the District, which,
according to the Washington Post, is the largest known government-related
embezzlement scandal in the District’s history. Despite the long duration
and scope of Walters’scheme, it was accomplished in a relatively simple and
mundane fashion. Walters started small. Her first two fraudulent refunds in
the late 1980s were for less than $5,000 each and were issued payable to a
friend who agreed to participate in the scheme. Soon, however, Walters
discovered she could issue significantly larger refunds without incurring any
additional risk of detection. In the early 1990s, Walters began processing
fraudulent refunds to her friends and to her friends’ companies for more
than $10,000 per transaction. By the late 1990s, Walters was issuing
fraudulent refunds in excess of $100,000 each. After becoming a manager
of her unit, she increased the amount of the fraudulent refunds further still.
By 2004, she was processing fake refunds for $350,000 or more. During
the course of her scheme, Walters processed two fraudulent refunds in
excess of $500,000—one for $543,423.50 in July 1997 and another for
$541,000.74 in May 2007. These fraudulent refund requests appeared on

the surface to be legitimate. The requisite vouchers attached what
seemed, at first glance, to be valid supporting documentation containing
property descriptions and proof of tax payments. But the documentation
often did not relate to the properties or property owners identified for the
refund. Instead, the supporting materials were frequently copied from
legitimate tax refunds for unrelated properties or were simply fabricated.
Many of the refunds were issued directly to entities that did not own
property in the District. The names of these entities were sometimes
slight variations on legitimate businesses operating in the District. On
at least one occasion, it appears that Walters simply strung together letters
to create a nonsensical payee name. In still other instances, Walters
processed fraudulent refunds in the names of legitimate property owners,
but directed that payments be made “care of” companies that did not
own or bear any relationship to the referenced property. Walters also
processed refunds in care of, or to the attention of, prominent real estate
attorneys. (We saw no indication whatsoever that these attorneys were
involved in, or aware of, the scheme.) In all of these cases, Walters
arranged for the refund checks to be delivered to her rather than mailed
to the recipients. She then passed the checks to other participants in the
scheme for deposit into bank accounts that they controlled, in later years
with the help of a corrupt bank employee. To put the scale of Walters’
scheme in perspective, the average value of legitimate real property tax
refunds in the District from October 1998 through January 2008 was
about $7,300. By contrast, the average fraudulent refund processed by
Walters during that time frame was over $275,000. Between October
1998 and January 2008, 21% of real property tax refunds between
$100,001 and $200,000 were fraudulent, 45% of real property tax
refunds between $200,001 and $300,000 were fraudulent, and 68% of
real property tax refunds between $300,001 and $400,000 were fraudu-
lent. Most significantly, 81% of real property tax refunds between
$400,001 and$500,000 were fraudulent. Between 2005 and 2007,
Walters’ fraudulent refunds accounted for nearly 35% of all real property
tax refund dollars. Although some of Walters’ subordinates helped pre-
pare vouchers for the fraudulent refund requests and received gifts and/
or substantial payments from her, we could not establish that any of them
actually knew the refunds were in fact fraudulent. The subordinates we
interviewed denied knowing about Walters’ scheme, although one key
witness who initially faced criminal charges that were later dropped
refused through her attorney to talk to us. We also could not establish
that more senior managers or other employees of the District were aware
of Walters’ scheme.
While the economical convenience for Walters was consumption by

spending money far in excess of personal income for herself, friends, and
family, and the organizational convenience was tax returns and other
special transactions that she could manipulate, the behavioral dimension
is difficult to understand based on the investigation report by Wilmer Hale
and PwC (2008). She pleaded guilty to federal charges related to theft of
over $48 million of District of Columbia funds.
NORWEGIAN CASE OF ARE BLOMHOFF AT THE BETANIEN

FOUNDATION
Blomhoff at Betanien was investigated by BDO (2014b). Are Blomhoff
(born 1952) was a priest and the managing director of the Betanien
Foundation in Bergen. He was assigned the sole responsibility of establish-
ing a nursing home in Spain for elderly Norwegians. He transferred money
from Norway to Spain to build and run the nursing home. Most of the
money went into a Betanien bank account in Spain, but some of the
money went into his private bank account in Spain. Since the nursing
home project was his sole responsibility, nobody was looking into this part
of the foundation business.
In general, it seems particularly convenient for white-collar criminals
to commit financial crime in areas that are separate from the major
business. It might be a project of establishing a nursing home, or it
might be a one-time task of selling shares in a venture. By controlling
all information and actions related to a separate task, the white-collar
criminal finds it convenient to commit financial crime in an organiza-
tional setting. When the task or the project is completed, nobody will
ever look into it again.
Priest and managing director Are Blomhoff accumulated funds in
his private bank account in Spain. For some of the money, he bought
himself a Spanish summer house. For some of the money, he arranged
sex parties with prostitutes. While he lived a normal family life when in
Bergen, he lived a wild life when in Spain. In the economical dimension
of convenience theory, his embezzlement of foundation funds enabled
him to live a life which so far had only occurred in his fantasies.
Another aspect of organizational convenience in this case is the
Betanien Foundation as a religious organization. In religious organiza-
tions, people tend to trust each other. Religious persons are seldom or
never suspect of misconduct, wrongdoing, or crime. Are Blomhoff was a
respected Methodist pastor and at the same time the managing director of
the Betanien Foundation. He was convicted to prison for embezzlement
and fraud against the foundation.
Based on the Betanien case, it is relevant to phrase the following ques-
tions: Is there too much trust, too much freedom, too much individual
authority, too little skepticism, and too little control of the financial side in
religious organizations? Is trust often betrayed in terms of white-collar
crime in religious institutions (Fleckenstein and Bowes, 2000)? According
to Owens and Shores (2010), most white-collar crime incidents are exploi-
tations of trust, which can be fostered by a shared religious identity between
the victim and the perpetrator. Are social religious networks an attractive
arena for white-collar criminals (Shores, 2010)? Is the moral of not acting
illegally blinded from a chance perspective when an attractive opportunity
arises? Do shared religious beliefs lead to less acceptability of white-collar
crime (Corcoran et al., 2012)? Many questions are asked and can be put
forward concerning white-collar criminals in religious organizations.
In my sample of hundreds of convicted white-collar criminals in
Norway from 2009 to 2016, very few of them were associated with or
committed their crime linked to a religious organization. Nevertheless, the
subsample of six religious white-collar criminals is worth exploring in
terms of their characteristics and to what extent they may be different
from the majority of white-collar criminals. In addition to Blomhoff, two
were convicted in another church foundation case, one was convicted in a
bank that managed religious people’s and institutions’ money, and two
were convicted in a bishop family.
Corcoran et al. (2012) found that shared religious beliefs and the impor-
tance of God in one’s life are negatively related to the acceptability of white-
collar crime. Religious belief was found to be associated with lower accep-
tance of white-collar crime and certain types of religious contexts condition
this relationship. These effects, however, weaken in religious contexts char-
acterized by belief in an impersonal or a moral God, as do the effects of
religious social relationships and belonging to a religious organization.
Owens and Shores (2010) examined the importance of social and
spatial distance in the case of Bernard Madoff, the perpetrator of one of
the largest white-collar crime cases in US history. Their study shows that
residents of countries in which there were stronger Jewish networks were
more likely to be victimized by Madoff. Shores (2010) found that Jewish
Americans form an ethnic group sharing a common religion, religious
language, a history composed of stories of events, a homeland, and
oppression. Many Jewish Americans also share a common heritage as many

of their ancestors emigrated from central and eastern parts of Europe.
Additionally, there are many population clusters of Jewish Americans, in
particular in cities throughout the USA.
In 1990, the comptroller of the Catholic Diocese of Buffalo was
charged with the embezzlement of 8 million dollars of money belonging
to the Diocese. He was subsequently convicted and served several years
in state prison. It was a newspaper story that revealed that he had
purchased church property at less than market value and had used the
church’s tax exemption for his own purchases. It was revealed that his
wife bought 36 acres of land for half the price of what the Diocese paid
for it 25 years previously (Fleckenstein and Bowes, 2000).
Heaton (2006) phrased the question: Does religion really reduce
crime? He found no empirical evidence for the proposition that religion
has a deterrent effect on crime, although sociologists and criminologists
have long recognized the potential links between religious belief and
delinquent behavior. One theory, labeled hellfire hypothesis, posits that
religion deters criminal behavior by increasing the costs of delinquency
through the fear of punishment in the afterlife. Works that are more recent
have emphasized the role of religious bodies as reference groups against
which individuals frame behavior.
Hofmann et al. (2014) studied morality in everyday life. They repeat-
edly assessed moral or immoral acts and experiences in a large (N = 1252)
sample using ecological momentary assessment. Moral experiences were
frequent and manifold. Religious and nonreligious participants did not
differ in the likelihood or quality of committed moral and immoral acts.
A discussion of Hofmann et al.’s (2014) research results in the Norwegian
religious newspaper Vårt Land (“Our Country”) revealed that most people
who were interviewed agreed with the findings. When religious people get an
opportunity to commit crime, they will basically act the same way as non-
religious people. Some may consider whether they will be paid in heaven, or
whether they should take what they can on earth. Some may argue that it is
the will of God, and therefore they can violate the law. Some religious
individuals portray themselves as more moral than others (Arnesen, 2014).
I commented to journalist Arnesen (2014: 31) on the topic of religious
persons:
When you have the opportunity to commit economic crime, there are many
who are considering whether they should wait until they get paid in heaven,
or take their share on earth. There are surprisingly many people who do the
latter, says Gottschalk.
A characteristic of white-collar criminals in general and in religious networks

in particular is the betrayal of trust. When we are not sure, we tend to give
the other the benefit of the doubt. Fleckenstein and Bowes (2000) argue
that the immediate problem for a religious organization is the different
perceptions of trust. Relationships are rooted in ideals, values, and services.
When trust is violated, some are led to question their trust in God who these
organizations claim to serve. Such negative experiences have led many to
place their trust elsewhere, thereby abandoning their faith.
The low fraction of a religious category of offenders, only one and a half
percent of the several hundred white-collar criminals convicted to prison
in Norway, who betrayed trust based on shared religious beliefs, is an
indication either of an unwillingness among religious individuals to com-
mit immoral deeds or of less detection and reporting to the police of
misconduct and crime.
Are Blomhoff was not the only religious white-collar suspect who
caught the attention of the media in the city of Bergen in Norway in
2014 and 2015. A father and a son who were active in a church did also
receive attention. The police suspected them of white-collar crime. The
son was a pastor in a church as well as employed in the Norwegian military.
Father and son were indicted of having swindled the military of several
million Norwegian kroner. The father was accused of setting up a fake
company from which the son bought and paid for fake services to the
military (Valland, 2015).
I commented to journalist Valland (2015: 11) on the topic of religious
persons:
If someone were to notify that a religious person has done something

wrong, the person who is notified, will not believe it, says Gottschalk.
Another example of a religious person suspected of white-collar crime is

Major John Lee Cockerham. He was prosecuted for orchestrating the
largest single bribery scheme against the military since the start of the Iraq
war. According to prosecutors, the 41-year-old officer, with his wife and
sister, used an elaborate network of offshore bank accounts and safe deposit
boxes to hide nearly $10 million in bribes from companies seeking military
contracts. Major Cockerham was active in the New Friendship Baptist
Church. The congregation in the church celebrated Cockerham’s last pro-

motion with a parade. At his son’s baptism, he told fellow worshipers that
he hoped to instill in his children the values he had wrested from his
hardship. He and his seventeen siblings grew up without electricity and
running water. Crockerham was sentenced to 17 and 1/2 years in prison for
accepting bribes from Army contractors (Thompson and Schmitt, 2007).
Are Blomhoff received a medal from the King of Norway one year
before his arrest. The chairman of the Betanien foundation had at that
time heard rumors about Blomhoff, but he did not believe them. Two
whistleblowers tried to inform the board at Betanien, but nobody would
listen. When the whistleblowers threatened to go to the media with their
story, then finally their message was taken seriously.
In Drammen district court in 2015, Are Blomhoff confessed to embezzle-
ment of NOK 16 million (about US$2 million). A substantial portion of the
embezzled money was spent on parties in Spain, where he hired in prosti-
tutes. Blomhoff admitted to buying sexual services for himself, which is illegal
according to Norwegian legislation. The prosecutor in court, Johnson, knew
that the Betanien foundation had a Christian statute (Buanes, 2015):
One can hardly get further apart from the Christian statute than how
Blomhoff decided to spend embezzled money, said Johnsen.
In addition to prison for three years, the court decided on an asset recovery
of NOK 18 million from Blomhoff. Embezzlements occurred from 2005 to
2012. He did not terminate his embezzlement activities before rumors
started to spread in the organization. Blomhoff said in court that he regrets
what he has done. He was labeled “party-priest” in Norwegian media.
The Betanien foundation has 550 employees and is operating a hospital,
a kindergarden, and a college in Bergen. In 2001, the foundation estab-
lished “Fundación Betanien” that operates a nursing home in the Spanish
city Alfazdel Pi. Embezzlements occurred when Blomhoff got money
transferred to a fictive maintenance account associated with the nursing
home in Spain (Drammen tingrett, 2015).
NORWEGIAN CASE OF LARS BRORSON AT HADELAND ENERGY

Financial crime specialist Gunnar Holm Ringen at PricewaterhouseCoopers
was responsible for a private investigation of embezzlement at Hadeland and
Ringerike Broadband (PwC, 2014a) as well as Hadeland Energy (PwC,
2014b) in the spring of 2014. He is a lawyer and certified accountant and is

responsible for preventive services as a partner at PwC. Gunnar Holm Ringen
has worked as a senior public prosecutor in economic crime and as a police
inspector in Norwegian police, as well as been a judge in the district court.
Hadeland and Ringerike Broadband can be found at www.hrb.no and
Hadeland Energy can be found at www.hadeland-energi.no.
Chief financial officer at Hadeland and Romerike Bredbånd, Mr. Lars
Brorson, was in August 2014 sentenced by a Norwegian district court to
four and a half years in prison (Gjøviktingrett, 2014). He was convicted
for embezzlement of NOK 20 million (US$3 million). He agreed to the
charges and accepted the verdict without appeal. This was his third con-
viction for embezzlement.
Where were the auditors? PwC (2014a, 2014b) addressed a clear finger at
the auditor who put a stamp of approval on the accounts in Hadelandand
Ringerike Broadband. Resigned chief financial officer of the company,Lars
Brorson, sent according to investigators from PwC (2014a, 2014b) a total
of 18million to own accounts from the company’s overdraft account. Half
the amount was transferred in 2012, divided into 42 payments. Between
2011 and 2014, 66 such transactions were recorded. During the same
period the Deloitte auditor wrote that financial statements were pre-
pared in accordance with laws and regulations. Auditor Ragnar Nesdal
was one of six from Deloitte interviewed by investigator Gunnar Holm
Ringen from the auditing firm PwC (2014a, 2014b). In the interview
Nesdal felt that the company was so small that there was no requirement
for annual meetings between the board and the company’s auditors in
accordance with the Norwegian auditing act. The auditor had not
attended board meetings or general meetings. The only communication
with the board had therefore been through written auditing statements
from Deloitte.
For a long time, both reports by PwC (2014a, 2014b) were attempted
to be kept secret for the public. The local newspaper Hadeland (www.
hadeland.net) was active in getting disclosure. The newspaper argued for
transparency and wrote in its editorial on 13 July 2014:
The newspaper Hadeland has requested access to investigation reports pre-

pared after the embezzlement in Hadeland and Ringerike Broadband
(HRB) and Hadeland Energy (HE). The answer has been no by referencing
to the Norwegian freedom of information act section 24 which states that
documents can be exempted if they deal with offenses.
The request for access was sent municipalities before the police declared the
investigation closed. As anewspaper, the editor forwarded arguments that
there is a need of a new assessment based on the fact that police has
concluded the case. A Friday afternoon came a note from Council man
Arne Skogbakken that the owners have decided to accommodate the request
for access. The report was to be made available the following Monday. It is in
every way good. That documents have been exempt from public disclosure
has angered many and could have caused to undermine confidence not only
in the management and control of companies but also in the owners. After all,
we are talking about two companies that are both owned by municipalities
and counties.The representatives on the board and in the general assemblies
are thus representing all of local inhabitants and not themselves.
Where were board members? The boards of both companies were
reelected in June. It has puzzled many. Chairman of HRB has previously
stated that the report is pointing in a certain direction, but he wanted not
to expand on this. That Friday afternoon came a strong indication. Then
HRB board stated in a press release that CEO John Ottesen had resigned
in July. We would be surprised if not the report also points to board and
auditor liability.
What about the white-collar criminal? The chief financial officer in his
40s was under investigation in the spring of 2014 for embezzlement of
between NOK 17 and 18 million (approximately US$3 million) from
Hadeland and Ringerike Broadband. The man was previously convicted
of economic crime. According to chairman Kai Glemmestad, the company
has an annual turnover of NOK 75 million. The case became known to the
board of HRB in March 2014 as a result of another police investigation in
Romerike police district. The investigation was led by police officer Ena
Bisevic in Romerike police district and later transferred to police lawyer
Frode Aabak in Vestoppl and police district. According to police, the
suspected man has spent the money on house, cabin, and car.
Hadeland and Ringerike Broadband is owned by three municipal power
companies, and those who can lose money because of the crime are thus
the inhabitants of the municipalities. A second person was charged in the
case, but that person should not be related to the company. The firm
Deloitte has been auditor for the broadband company.
Since 2011, Lars Brorson has been convicted of embezzlement and tax
evasion, and he has spent about three years in prison. He has been
employed in accounting services firms such as Manpower. It turned out
that Hadeland Energy was familiar with the man’s past economic crime
when he was hired in 2009.
The case was uncovered on March 10, 2014, in connection with police
investigations of another firm for tax and accounting offenses in the neigh-
boring police district Romerike. The accused CFO did accounting for this
business, in addition to his job at the broadband company. He was also
charged for these offenses, making the total add up to NOK 20 million.
Norwegian daily newspaper Dagbladet wrote the following story about
the case under the heading “20 million in three years for cabins, cars, wine
and brandy” (Andersen, 2014: 9):
A previously convicted CFO in his 40ies has admitted embezzling 20.9

million kroner from two municipality- and county-owned energy and broad-
band companies in Hadeland over a period of three and a half years.
A sensationally large amount compared to the short time and the compa-
nies’ turnover of 48 million annually. It is obvious that both missing
employment procedures, his wide powers in the position, as well as the
board’s lack of expertise has caused the company to be out of control.
And it is strange that the largest owner reelects the chairman long after
the financial crime is known, says professor Petter Gottschalk, Norwegian
Business School to Dagbladet. He has written several books on economic
crime, teaches criminal justice, and he researches four hundred white-collar
crime cases in the last six years, where people have abused their positions to
“help themselves.”
Also, the unfolding of embezzlements in Hadeland Energy and Hadeland
and Ringerike Broadband happened by chance, as professor Gottschalk has
registered for a large part of the four hundred cases successively examined. It
was in March this year that the investigation of the embezzlement-accused
CFO started in the neighboring police district Romerike. Suspicions were
then linked to irregularities of cash flows in a company where the man had
an extra job doing accounting. The investigation in the neighboring district
led to charges of embezzlement at the main employer Hadeland and
Ringerike Broadband. The amount grew rapidly from roughly 10 million
to 18 million kroner. When Vestoppland police district concluded the case
and referred it to the public prosecutor yesterday, the sum of money he was
charged for had increased by an additional 2.9 million to 20.9 million.
The accused has acknowledged all conditions, and there is no reason to
believe that there is a greater amount astray in this matter now. We believe
we have a good overview, also over what the money has gone into. It’s all
about houses and cottages, car purchases and very high personal consump-
tion, says police lawyer FrodeAabak to the newspaper Hadeland.
Andersen (2014: 9) wrote that “20 million in three years were spent on
cabins, cars, wine and brandy.” However, it turned out that only half of
the money was spent that way, the other half was spent on luxury con-
sumption. Police seized a house, two cottages, two cars, cash, and exclu-
sive wines—and a cognac collection.
The CFO accused of and convicted for embezzlement served a total of three
years and three months in prison after being convicted of similar crime in
2002 and 2004. In addition to charges of gross embezzlement of 18.9 million
from Hadeland and Ringerike Broadband and 2.2 million from the principal
owner Hadeland Energy from 2010 to 2014, he was also charged with
accounting and tax offenses in the case handled by Romerike police district.
The man from the town of Lunnernorth of Oslo in Norway was employed
as accountant in Hadeland Energy in the autumn of 2009 and promoted to
CFO of subsidiary Hadeland and Ringerike Broadband in February 2011.
The accused’s defense lawyer Kenneth Strømme Gundersen said that his
client informed about the second punishment, but not the first, before he got
the job as CFO. The auditor had “no comments” to the accounts in
Hadeland and Ringerike Bredbånd in recent years.
CONVENIENCE IN THE ORGANIZATIONAL DIMENSION

The organizational dimension is at the core of convenience theory. It is
the organization that provides opportunity for financial crime and make
crime appear to be legitimate or make crime disappear among legitimate
activities. In certain positions in organizations, individuals have access to
resources and opportunities that make white-collar crime convenient.
There is no or little risk of detection, and carrying out criminal activities
is easily completed within other professional activities at work.
Yusuf Acar had a convenient organizational opportunity to arrange
recruitments where he could benefit financially himself in terms of kick-
backs. Henriette Walter was in charge of returned property tax refunds
that she embezzled. Are Blomhoff was alone responsible for establishing a
nursing home and embezzled some of the money transferred from
Norway to Spain. Lars Brorson was in charge of both ends of money
transfers within a group of public companies where he could conventiently

transfer some of the money to himself.
All these cases illustrate opportunity properties as suggested by Benson
and Simpson (2015): (1) the offender has legitimate access to the location,
systems and networks required to commit crime, (2) the offender has no
victim in sight, and (3) the offender’s actions are hidden in legal transac-
tions giving them an appearance of legitimacy.
While there always is a victim, victimization is not perceived my the
offender. In all our four cases, the employer was the victim. Thus, the
formulation of Benson and Simpson (2015) that the offender is spatially
separated from the victim has to be modified to mean that the employer is
not perceived as a victim.
Similarly, Benson and Simpson’s (2015) third property that the offen-
der’s actions have a superficial appearance of legitimacy has to be modified
to mean that the offender’s activities have a superficial appearance of
legitimacy, where the offender commits crime in the course of legal
activities.
Opportunity is dependent on social capital available to the criminal.
Acar was good at networking, Walter was good at performing her job,
Blomhoff was good at creating trust, and Brorson was good at taking on
tasks involving more responsibility. The structure and quality of social ties
in relationships shape opportunity structures. For example, an executive
who has hired a manager may trust the manager to a larger extent, simply
because the executive was responsible for the recruitment and is unwilling
to see shortcomings in the manager. This was the case with Lars Brorson,
who enjoyed trust far beyond what was reasonable in his position. Lack of
suspicion toward Henriette Walters can be explained by the gender per-
spective, where men are more likely than women to be suspected of
financial crime (Benson and Gottschalk, 2015).
CHAPTER 6
Behavioral Convenience
Abstract The third and final dimension of convenience theory is con-

cerned with attributes of individuals who make financial crime by white-
collar criminals convenient and not problematic for them. Important
theories include neutralization techniques and differential association.
Evidence of behavioral convenience can be found in reports of investiga-
tions in both Norway and the USA.
Keywords neutralization technique self-control personal strain

slippery slope
INTRODUCTION
Convenience may be derived from learning by differential association
(Sutherland, 1983), from benefits that exceed costs as a rational choice
(Pratt and Cullen, 2005), from lack of self-control (Gottfredson and
Hirschi, 1990), from strain (Langton and Piquero, 2007), from absence
of perceived deterrence (Comey, 2009), from obedience to authoritarian
others (Baird and Zelin, 2009), from fear of falling (Piquero, 2012), from
negative life events (Engdahl, 2014), from sliding on a slippery slope
(Welsh et al., 2014), from neutralization of potential guilt feelings
(Sykes and Matza, 1957), and from avoidance of social conflict
(Petrocelli et al., 2003). In this chapter, the remaining case of convicted

DOI 10.1007/978-3-319-44986-9_6
white-collar criminals in the USA is presented as well as the remaining

three cases of convicted white-collar criminals in Norway.
US CASE OF BERNARD EBBERS AT WORLDCOM

Ebbers at WorldCom was investigated by Wilmer and PwC (2008). Ebbers
directed significant energy to building and protecting his own personal
financial empire, with little attention to the risks these distractions and
financial obligations placed on the company that was making him one of
the highest paid executives in the country. It was when his personal financial
empire was under the greatest pressure—when he had the greatest need to
keep WorldCom’s stock price up in order to avoid margin calls that he could
not meet—that the largest part of the fraud occurred. And it was shortly
after he left that it was discovered and disclosed.
The fraudulent corporate culture began at the top. Ebbers created the
pressure that led to the fraud. He demanded the results he had promised,
and he appeared to scorn the procedures (and people) that should have
been a check on misreporting. When efforts were made to establish a
corporate code of conduct, Ebbers reportedly described it as a “colossal
waste of time.” He showed little respect for the role lawyers played with
respect to corporate governance matters within the company. While we
have heard numerous accounts of Ebbers’ demand for results—on occa-
sion emotional, insulting, and with express reference to the personal
financial harm he faced if the stock price declined—we have heard none
in which he demanded or rewarded ethical business practices.
Ebbers was autocratic in his dealings with the board, and the board
permitted it. With limited exceptions, the members of the board were
reluctant to challenge Ebbers even when they disagreed with him. They,
like most observers, were impressed with the company’s growth and
Ebbers’ reputation, although they were in some cases mystified or per-
plexed by his style. This was Ebbers’ company. Several members of the
board were sophisticated, yet the members of the board were deferential
to Ebbers and passive in their oversight until April 2002.
An example of the board’s deference is its failure to challenge Ebbers on
the extent of his substantial outside business interests (and the resulting
claim on his time and energies). Those interests included a Louisiana rice
farm, a luxury yacht building company, a lumber mill, a country club, a
trucking company, a minor league hockey team, an operating marina, and
a building in downtown Chicago. Most properly run boards of directors
6 BEHAVIORAL CONVENIENCE 81
would probably not permit a chief executive officer to pursue an array of

interests such as these, certainly not without careful examination of the
time and energy commitments they would require. Yet there seems to be
no evidence of any such challenge.
Ebbers dominated the board meetings, which followed a consistent
format. Each meeting opened with a prayer. A series of presentations—
generally done fairly quickly—followed. Typically, the chairmen of the
audit committee and compensation and stock option committee, Bobbitt
and Kellett, respectively, each reported to the board. Michael Salsbury,
general counsel, reported on legal and regulatory issues.
The fragmentation of the legal department was Ebbers’ choice. None
of the company’s senior lawyers was located in Jackson. He did not include
the company’s lawyers in his inner circle and appears to have dealt with
them only when he felt it necessary. He let them know his displeasure
with them personally when they gave advice—however justified—that he
did nutlike. In sum, Ebbers created a culture in which the legal func-
tion was less influential and less welcome than in a healthy corporate
environment.
WorldCom marketed itself as a high-growth company, and revenue
growth was clearly a critical component of WorldCom’s early success. In
the 1990s, WorldCom was often cited as atop “growth stock.” Analysts
marveled at WorldCom’s ability to “outgrow an industry that was out-
growing the overall economy,” and Ebbers repeatedly trumpeted the
company’s impressive record on revenue growth during his quarterly
conference calls with analysts. As Ebbers stated in 1998, “[WorldCom’s]
industry leading and accelerating revenue growth, combined with a
demonstrated track record of margin expansion, are cause for optimism
as we continue our relentless pursuit of increasing shareholder value.” This
growth was both critical to WorldCom’s stock market valuation, and to its
ability to use its stock as currency for compensation and expansion.
Beginning in September 2000, the compensation committee extended
to Ebbers a series of loans and guaranties that, by April 29, 2002, reached
approximately $408 million (including interest). These loans and guaran-
ties enabled Ebbers to avoid selling most of his WorldCom stock in
response to the demands of those banks from which he had borrowed
substantial sums of money. The loans from WorldCom provided Ebbers
the funds with which to conduct his personal business affairs at advanta-
geous interest rates. In making these loans and guaranties, WorldCom
assumed risks that no financial institution was willing to assume. The
company did not have a perfected security interest in any collateral for the
loans for most of the time period during which they were outstanding.
The price of WorldCom stock continued to decline during 2000, and
Ebbers continued to face margin calls from his lenders. By September 6,
2000, the day of a scheduled meeting of the compensation committee, the
stock price was down to $30.27 a share. Shortly before the meeting,
Ebbers told Stiles Kellett, the committee’s chairman, about the margin
calls he was facing, and they discussed the possibility that the company
would give him a loan. There is conflicting evidence whether it was Ebbers
who first suggested the loan. Kellett agreed to take the matter to the
committee. At the meeting that followed, the committee directed the
company to give Ebbers a $50 million loan and—as part of the retention
bonus program then being applied to many WorldCom employees—pay
him a $10 million bonus.
At some point, in-house counsel to the compensation committee dis-
covered that Ebbers was withdrawing money from the direct loans for use
in connection with his other companies’ operating expenses. When con-
fronted with this fact, Ebbers justified the use of the money for these other
businesses as necessary in order to avoid impairing the value of these assets.
Instead of objecting and demanding that Ebbers use the loans only for
their intended purpose, however, the committee accepted this rationale,
concluding it was in the company’s interest that these assets remain
unimpaired so that Ebbers could sell them, if necessary, and repay
WorldCom.
After discovering Ebbers’ other uses of the loan proceeds, the company
characterized the purpose of the loans more neutrally in its filings with the
SEC: “We have been advised that Mr.Ebbers has used, or plans to use, the
proceeds of the loans from WorldCom principally to repay certain indebt-
edness under loans secured by shares of our stock owned by him and that
the proceeds of such secured loans were used for private business
purposes.”
US CASE OF KERN WILDENTHAL AT THE UNIVERSITY OF TEXAS

This case is different from other US cases presented so far, since there was
never any prosecution or conviction of Kern Wildenthal. His case is never-
theless included here, since the internal investigation by Breen and
Guberman (2012) document misconduct that was caused by convenience.
Wildenthal had successfully created a medical center at the University of
Texas, and he felt entitled to benefit from the success in the behavioral
dimension of convenience theory.
Dr. Wildenthal had a broad mandate to spend university funds for
fundraising, promotion of reputation and recruiting, which largely left
his travel and entertainment expenses to his discretion and judgment.
Wildenthal’s spending was generally consistent with a well developed
and successful fundraising strategy, which focused on a small number of
individuals with the financial capacity to make large donations. However,
he exercised questionable judgment by mingling his business and personal
travel and entertainment expenses.
Breen and Guberman (2012) argue that as a leader of and key official at
a public institution, Wildenthal’s conduct is subject to public scrutiny and
is inevitably viewed by others at UTSW as an example of how to act.
Nevertheless, his spending at times tested the boundaries of permissible
travel and entertainment expenses under the UT System and UTSW rules.
UT System and UTSW had adequate policies, procedures, and internal
controls in place that provided a mechanism for approval, documentation,
reporting, and auditing of Wildenthal’s spending, but they were not
enforced at UTSW. His spending was not in all instances sufficiently
documented to show the predominant business purpose and benefit to
UTSW, and as a result, it was not subjected to meaningful review.
Wildenthal’s travel and entertainment expense reports frequently con-
tained inadequate information and sometimes did not even include a
signed acknowledgment by him. Such expenses were routinely approved
by UTSW’s chief business officer without any inquiry. The practices at
UTSW disregarded UT System policies in place because Wildenthal was
never questioned about the adequacy of the listed business purpose for his
travel or benefit to UTSW.
The investigation by Breen and Guberman (2012) revealed too much
dependence on the audit process by personnel at UTSW. Individuals
responsible for approving presidential expenses admitted to relying on
the audit process, rather than themselves inquiring about questionable
expenses or inadequate business purposes for expenses.
Dr. Wildenthal’s mingling of business and personal expenses forced
him to frequently make decisions as to which expenses were for business
and which were personal. He was a busy man, and it was not at all obvious
what could count as business expenses and what should account for
personal expenses. For example, he traveled to New Zealand for more
than two weeks in January 2010. The business purpose for this trip, as
listed on Dr. Wildenthal’s travel voucher form, was to “Visit the Medical
School at the University of Otago.” While on its own, such a visit may
qualify as a legitimate business purpose, but the primary purpose of this trip
does not necessarily appear to have been business. He designated more days
on this trip as vacation days than as work days, and he traveled with his
family throughout New Zealand. UTSW reimbursed him for $7,646.60,
the cost of his airfare and six nights at a hotel. While Dr. Wildenthal later
made a donation to UTSW for this exact amount, the fact remains that he
perhaps should never have submitted nor should UTSW perhaps have paid
for these travel expenses.
In another instance, he traveled to France and Spain with his wife in
September 2005. As part of his business purpose for this trip, he explained
that he toured the Barcelona Opera House to view its new construction
because UTSW was undergoing its own construction projects at the time.
This is not necessarily a legitimate business purpose. He split his time on
this trip almost equally between work days and vacation days. He was
reimbursed by UTSW for both his and his wife’s travel expenses. While he
made a donation to UTSW for some of his and his wife’s travel expenses,
the fact remains that at least some of these expenses should maybe never
have been submitted to or paid for by UTSW.
Investigators Breen and Guberman (2012) interviewed Wildenthal. He
articulated a business purpose for his trips that were within his broad spend-
ing mandate. He described the purpose of some of his trips as “borderline”
between business and personal. He explained that the opportunity to intro-
duce donors to opera singers backstage or at dinners was invaluable because it
was an experience that he could provide, but which could not be purchased.
From a theoretical perspective, neutralization techniques applied by
Wildenthal seem to include entitlement on his own behalf and lack of
injury or victim (Sykes and Matza, 1957). At the same time, reduced or
limited self-control seems to have been present when making business
travel decisions (Gottfredson and Hirschi, 1990).
NORWEGIAN CASE OF IVAR HENRIKSEN AT ROMERIKE

WATER SUPPLY
Ivar Thorer Henriksen (born in 1937) at Romerike Water Supply and
Waste was investigated by Distriktsrevisjonen (2007). He felt entitled to
abuse company funds and get into kickback schemes with suppliers
because he was successfully running the municipality’s water supply and

water waste companies. He had built up and led the water works. For his
efforts to build these plants for 35 years, he was in 2002 awarded the
King’s Medal of Merit in gold. In 2005, he was forced to resign after
Norwegian newspaper Aftenposten through a series of articles had revealed
irregularities concerning the operation of enterprises. Aftenposten
revealed that Henriksen through a company he controlled in South
Africa had acquired 9 farms and turned them into a 100,000 acre hunting
farm. Henriksen was sentenced to 8 years in prison for corruption and
misappropriation of funds.
The revelations in Aftenposten started when the newspaper wrote
about economic collusion via his son Pål Henriksen’s companies that the
father controlled. The father found it quite acceptable to spend company
money on enterprises that had nothing to do with the water works. When
asked where he got the money to buy farms in South Africa, he told
investigators that was none of their business.
Among employees at the water works, there were rumors of fraud. But
no one dared to speak out. They feared reprisals from the boss, Ivar
Thorer Henriksen, who was known for his whimsical mood and his
authoritarian leadership style. The waterworks chief used his power to
punish active union leaders with lower wages than others, while loyal
employees were rewarded with gifts and free trips. This is documented
in the investigation report.
Anyone who delivered something to the waterworks also had to give
something to Henriksen. All frequently used vendors have contributed to
private enrichment of Henriksen. Employees at the waterworks worked
privately on Henriksen houses and cottages, but they did not dare to raise
the alarm. For Ivar Henriksen was “King of Romerike” after he received
the King’s Medal of Merit.
Henriksen was nonbureaucratic until the nerve-racking for detail-
oriented councilors. He could be a hardliner with his authoritarian style.
But he was also the epitome of human charm and disarming persuasiveness.
Nobody said against him. He was the King of Romerike.
Investigators write in their report that Henriksen undoubtedly put a
great deal of effort in the water companies. He has managed to build and
operate facilities within the water sector that are solid, efficient, and
dimensioned for the future. Heriksen had both great technical insight
and was energetic and innovative in his aim of developing the companies
further. The same applies to his interest in searching for new opportunities
for utilization of energy, especially the sludge and wastewater. He put

these opportunities in a broader context that he said needed to be inter-
esting both for the region and society as a whole.
Henriksen conveyed the view to investigators that he found he had not
gained acceptance and respect as deserved for what he had contributed
through many years. He argued that nobody understood his visions of
modern water supply and waste. He said his allocation of funds, even to
himself, had to be viewed in a larger context of great plans for the future.
The investigation team received numerous independent explanations
showing that Henriksen often had an authoritarian behavior, especially
toward employees, but also toward representatives of suppliers. Toward
locals and munipalities served by his waterworks, however, he was always
friendly and helpful. For example, outside a nursing home in Romerike, he
got built a water fountain that the residents very much enjoyed. When the
police was lacking space for a landing platform for its helicopter, he got a
free space paved for it.
Henriksen’s changing mood created uncertainty and distance to
employees. Several interviewees stated that on days with bad mood, it
was best to stay away from Henriksen. Henriksen made his temperament
unleash in the presence of employees and others. A representative of a
foreign supplier was physically attracted because Henriksen was cursed at
something. A hired consultant experienced that he one day came to a
locked office door with all his belongings lying on the floor in the corridor.
The consultant assignment was abruptly and definitely ended.
On the other hand, Henriksen could be generous to those who did a
great effort and showed high degree of loyalty. These persons could, for
example, receive gifts of various kinds. Henriksen gave on one occasion a
big outboard motor as thanks for good work as an employee. In another
case, two office employees went on a spa trip to Poland as a reward for,
according to the employees, overtime work without payment and other-
wise well-completed work. The journey was recorded as a business trip and
not reported to tax authorities. Many have also been permitted to buy
used cars at a preferential rate. Henriksen decided who should be allowed
to buy and at what price. Private purchases where the employee benefited
from discounts, were common. Other employees who had problems of
one kind or another, could also find that Henriksen was generous and
willing to assist in various ways. In this manner he secured himself
undoubtedly many faithful supporter in the organization, and employee
loyalty to Henriksen grew.
In interviews with investigators, Henriksen expressed his opinion that

he has no respect for political games that often led to lack of decisions and
bureaucratic dilatoriness. His impatience and result-oriented attitude
combined with what appears to have been a lack of respect for democratic
decision-making in inter-municipal companies, led him several times to
chose to act first and then afterwards ensure that the respective boards
approve his dealings.
Henriksen often tried to and succeeded in influencing political pro-
cesses in municipalities that affected his companies. He was willing to
spend substantial resources to get his views across, to stop what he disliked
and to initiate what he liked.
NORWEGIAN CASE OF LEIF WALLE AT FURUHEIM FOUNDATION

Former deputy mayor of Øyestad admitted to misconduct and embezzle-
ment. The police seized assets for NOK 35 million. The 65-year-old Leif
Walle gave an unreserved confession during interrogation. He has pre-
viously been head of the joint council of churches in the town of Arendal,
and was once deputy mayor of Øyestad, which was merged with Arendal
in 1992. Walle was in 2012 indicted for serious financial fraud and gross
embezzlement as chairman and CEO of the Furuheim Foundation home
for seniors. Walle was sentenced to three years in prison.
A convenient perspective in the behavioral dimension was the dual role
often taken by Walle. He was on the board making decisions to grant
projects to companies that he owned. He may have been convinced that
his own companies were indeed the best to carry out construction and
maintenance projects for the foundation on the home for seniors. His dual
role also involved financial transactions from which he could profit. He felt
that he and his companies could benefit without the foundation suffering
any losses. In a case where he personally benefitted, he argued that he had
done his utmost to get others to take over the project, without success.
The investigator from Hald (2006) law firm did not believe him.
Walle profited from ambiguity and misunderstandings, for which he felt
he was not to be blamed, for example when he took over apartments in his
dual role (Hald, 2016: 28):
It also emerged that Walle had sold apartments and agreed on sales prices,
and then later discovered that the apartments were actually larger/better
than what was assumed at the time of the sales transactions.
As chairman of the board, Walle made a contract with himself as the chief
executive officer. Walle was to record his hours as the CEO and get paid
accordingly. Walle as chairman approved his own time sheet. Although he
made a nice salary as the CEO, he felt he did a lot of good work for the
foundation. He claimed to be the innovative and driving force on behalf of
the Furuheim foundation.
Walle was not only in dual roles of chairman and CEO. He was also
head of the election committee in the foundation. Walle was formally in
charge of all bank accounts owned by the foundation, and he could sign
any money transfer without a need for a co-signature. He managed bank
accounts as his own personal accounts, and he claimed he did only what
was best for the foundation.
Foundation Furuheim was created by Øyestad health association. The
foundation’s objective is to acquire and undertake construction of appro-
priate housing for seniors and rent out homes in these buildings. The
foundation also has the purpose of constructing and maintaining other
kinds of buildings, such as car ports and vacation houses, when they are to
be used by occupants in foundation houses. The foundation is to be
headed by a board of five members.
Walle was running the foundation because he found that others were
reluctant to involve them selves (Hald, 2016: 34):
We assume that some of those who have served on the board simply did not
wanted to sit there. Several board members stated that they were persuaded
or felt they had to, among others because Leif Walle had talked with them.
They did apparently not learn about their responsibilities as board members,
and they have assumed that “Leif Walle will fix all of it”. It is understandable
that one can end up in a board position without fully understand what
responsibilities you have, especially in the case of this type of organizations
with ideal purposes, but it is also obvious that when making decisions in
cases that occasionally touches values for millions of kroner, everyone ha an
independent responsibility regardless, if there are subsequent questions
about the decision made.
Leif Walle may have assumed that he carried the burden of the foundation
on his shoulders alone. He may have felt that he could not count on others
in voluntary work and formal positions in the Furuheim foundation.
From a theoretical perspective, Walle may think that he carried out
rational choices both on behalf of the foundation and on behalf of himself
(Pratt and Cullen, 2005). He may have been short on self-control

(Gottfredson and Hirschi, 1990) as he had taken on many conflicting
roles. Strain theory might also apply (Langton and Piquero, 2007), as
Walle alone was to make a number of decisions since others were reluctant
to participate. He might also have been on a slippery slope (Welsh et al.,
2014), where he did not notice that he moved from legal to illegal
activities. In terms of neutralization (Sykes and Matza, 1957), Walle
probably denies injury, and he probably claims entitlement. For some
illegal actions, he may claim dilemma tradeoff, whereby he made a reason-
able tradeoff before committing the act (Siponen and Vance, 2010).
CONVENIENCE IN THE BEHAVIORAL DIMENSION

Deviant behavior by white-collar criminals finds a number of explanations
in the research literature. Differential association with other offenders,
rational choice to commit crime, lack of self-control, removal of strain
by criminal acts, lack of deterrence, obedience and loyalty, fear of falling,
negative life events, sliding on a slippery slope, and neutralization of
misconduct are some of the explanations found in the literature.
Bernard Ebbers felt entitled to do what he did. When he became
subject to strain because of poor business performance, he carried out
manipulations based on low self-control. He neutralized his misconduct
by claiming entitlement. It seems that crime was a rational choice for
him.
Kern Wildenthal also felt entitled to do what he did. He had success-
fully found sponsors who funded university activities. Some of the funding
he felt entitled to spend on travels that were combinations of business and
pleasure travels. Again, neutralization is present in terms of entitlement.
Also, when been made aware of big private spending, it seems that he was
on a slippery slope from legal to illegal activities.
Ivar Henriksen is first and foremost a case of deterrence prevention. He
felt so powerful that whatever he did, nobody could stop him. He would
expand business activities into areas that had nothing to do with the core
water business. He was in charge of benefits, such as obsolete vehicles that
were given away to loyal and favorite employees.
Leif Walle is a slightly different kind of criminal. He may have argued
that he created synergies by combining his elective positions with his
business enterprise. He felt he was the only one who really cared for the
foundation. Differential association can be found in his case as he worked
closely with another criminal entrepreneur. It was probably a rational choice

to abuse his elective position to promote his own business enterprise.
Galvin et al. (2015) suggest narcissistic organizational identification as
an explanation for behaviors that exploit the organization. Such narcissis-
tic identification can be found in all four cases of Ebbers, Wildenthal,
Henriksen, and Walle. Narcissistic organizational identification is a form of
organizational identification that features the individual’s tendency to see
his identity as core to the definition of the organization.
CHAPTER 7
The Case of Skjervøy in Norway
Abstract This case study is concerned with a report of investigation about

white-collar crime suspicion among important individuals involved in
politics on the island of Skjervøy in the northern part of Norway.
Nobody on the island has ever been investigated, charged, prosecuted,
or convicted of financial crime in this case. However, rumors, accusations,
and critical media reports have followed key individuals on the island for
more than a decade.
The case study attempts to discuss potential misconduct and crime in
the Skjervøy case by application of the convenience theory.
Keywords case study internal investigation religious organization

crime suspicion
INTRODUCTION
In the economical dimension, powerful individuals on the island of
Skjervøy all belong to a special religious group that provides benefits to
group members and family members. In the organizational dimension,
group members are on both sides of the table—they are on the council of
the municipality providing funding to projects run by group members on
the board of companies. In the behavioral dimension, group members

DOI 10.1007/978-3-319-44986-9_7
adhere to church rules rather than legal rules, where they can confess their
sins to priests and trusted members of the church.
This case study is concerned with suspected white-collar crime. It is not
about actual white-collar crime. All persons mentioned in the case study
are innocent at the time of writing this case study.
THE ISLAND AND MUNICIPALITY OF SKJERVØY

Skjervøy is a municipality in Troms county in Norway. The administrative
center of the municipality is the village of Skjervøy on the island of
Skjervøya, where most of the three thousand inhabitants live. The main
industries are fishing and shipbuilding. The municipality of Skjervøe (later
spelled Skjervøy) was established in 1838. In 1963, the southeastern
(inland) part of the municipality was separated from the new municipality
of Kvænangen. Then in 1886, the southern part of the municipality was
separated from Skjervøy to form the new municipality of Nordreisa. The
island municipality of Skjervøy is surrounded by the Norwegian Sea to the
north, Ullsfjorden to the west, Lyngenfjorden to the southwest,
Reisafjorden to the southeast, and Kvænangen fjord to the east. The
municipality consists of several islands, the major one being Arnøya,
with the villages of Årviksand, Akkarvik, and Arnøyhamn. Most people,
however, live on the relatively small island of Skjervøya. The other islands
include Haukøya, Kågen, Laukøya, Vorterøya, and the northern part of
Uløya.
Kågen and Skjervøya are connected by the Skjervøyabridge. Kågen is
connected to the mainland by the Maursund tunnel.
The Church of Norway has one parish within the municipality of
Skjervøy. It is part of the Nord-Troms deanery in the Diocese of Nord-
Hålogaland. Many inhabitants in Skjervøy municipality are laestadians.
Laestadianism is a conservative Lutheran revival movement started in
Lapland in the middle of the nineteenth century. Named after Swedish
state church administrator and temperance movement leader Lars
LeviLaestadius, it is strongly marked by both Pietistic and Moravian
influences. The Moravian church is one of the oldest protestant denomi-
nations in the world, with its heritage dating back to Bohemian reforma-
tion in the fifteenth century. Laestadians in Norway are members of the
Church of Norway.
Laestadianism is the biggest revivalist movement in the Nordic countries. It
has members mainly in Finland, North America, Norway, Russia, and Sweden.
7 THE CASE OF SKJERVØY IN NORWAY 93
The movement shares many essential teachings including a central emphasis

on the Lutheran doctrine of justification (forgiveness and grace). They claim
to be true Christians through their lifestyle and beliefs, and they expect to be
the only ones reaching the kingdom of heaven. The church teaches that every
believer has the authority to testify that others’ sins are forgiven, sometimes
referred to as the audible declaration of the forgiveness of sins.
Roy Waage (born 1963) is a Norwegian politician for the Coastal Party.
He was mayor of Skjervøy for many years. Waage was originally a member
of the Christian Democrats, serving as a deputy representative to the
Norwegian parliament from Troms during the term 1997–2001. He
switched to the Coastal Party after it was created in the late 1999. He
was a top candidate for the party in Troms in the 2001 election, but
marginally failed to get elected. In the 2003 local elections, he was elected
member of the Troms county council and reelected mayor of Skjervøy. In
2005, he was appointed chairman of the party, a position he held until
2007. The party failed to get legislative representation in the 2005 elec-
tion, but Waage was again re-elected mayor of Skjervøy in the 2007 local
elections. Waage is a laestadian.
KOMREV INVESTIGATION IN SKJERVØY

KomRev (2015) investigated suspicions of white-collar crime in Skjervøy.
The report of investigation is 145 pages long and covers a number issues as
defined in the mandate:
1. The municipal council asks for an overview of grants, loans, and

payments from and to Skjervøy Fisheries Development.
2. The municipal council asks for a report on the statutes and any other
guidelines that applied to the management of funds in Skjervøy
Fisheries Development.
3. The municipal council asks for an explanation of whether the use of
funds and awards that have taken place in accordance with the
statutes and other guidelines for the operation.
4. The municipal council asks for a report on whether the allocation of
funds has taken place in accordance with the formal rules of deci-
sion-making in the competent forums in the company.
5. The municipal council asks that the loan/grant of NOK 3.1 million
to Årvikbruket Eiendom is investigated and explained, including
how the loan/grant was used in the company.
6. The municipal council asks that it be investigated and explained the

loan of NOK 4.5 million to Skjervøy Seafood, including whether
Skjervøy Fisheries Development was aware that the assets were
leased before the loan was disbursed.
7. The municipal council asks that it be investigated and explained the
loan of NOK 2.5 million to Industrial Park Skjervøy, including their
relationship between the loan and the former sale of Industrial Park
Skjervøy to West Contractors.
8. The municipal council asks that it be investigated and explained
what security and control that were established for the loans/grants
so they be used for the purpose they were granted.
The main theme of the report of investigation by Kom Rev (2015) is

Skjervøy municipality’s enterprise Skjervøy Fisheries Development’s allo-
cation of NOK 15 million that the municipality had been paid from
Nergård in connection with the Nergård group’s closing down its fishing
industry in Skjervøy. Skjervøy Fisheries Development was established in
2010, and according to the statutes was to fund specific initiatives and
projects in fisheries and in aquaculture. The management of Nergård
funds had been the subject of critical issues in the local community and
the council.
Investigators conclude after investigations of Skjervøy Fisheries
Development that appropriations and disbusements of loans and grants
from the company with some exceptions were made in accordance with
the company’s bylaws, formal decision-making rules, and conditions of the
award decision. Investigators also conclude that there were no established
general control procedures to ensure that payments from the company
were used for the purposes they were granted for. However, board deci-
sions for several fund allocations described conditions that could enable
donor control over the funds disbursed. Board decisions specified pur-
poses for funding, and the company’s chairman exercised de facto control
of some of the payments.
As regards the grant to Årvikbruket Eiendom and the recipient’s use
of the funds, investigators identified that Årvikbruket Eiendom used
most of the funds to make up for an invoice from Årvikbruket, which
operates the fish industry that is owned by the municipality. The
invoice concerned remodeling and improvement work at the fish fac-
tory as specified by the operating company. The maintenance work had
partly been provisioned and paid for and partly would soon be
performed. After what investigators had found out, there was no evi-
dence which of the invoiced improvements related to Nergaard funds
that were actually performed. Nevertheless, Årvikbruket Eiendom paid
the invoice. Investigators conclude that the invoice does not satisfy
requirements related to valid sales documents.
Investigators’ analysis of publicly available accounting figures for
Årvikbruket provides no guidance to the extent of maintenance work
performed. From the bottom line figures for 2008 and 2009, it is obvious
that the company itself had no funds to conduct regular maintenance work
(KomRev, 2015: 5):
Our financial analysis of the two aforementioned years as a whole shows that
without receiving revenues of 3,85 million as a result of the invoice to
Årvikbruket Eiendom, the equity at Årvikbruket would be negative at
3,944 million. On request from investigators, an engineer has considered
whether the 22 improvements funded actually had been carried out. In
numbers, most of the improvements are completed. However, the most
expensive innovations have only partly been completed.
Investigators also studied how the board at Årvikbruket Eiendom had

handled issues related to renovation work at the fishery. Work by the
board is scarcely documented. Investigators conclude that Årvikbruket
Eiendom’s reimbursement of the invoice from Årvikbruket is a violation
of Norwegian accounting laws.
The fraud examiners interviewed a number of persons as listed in
Table 7.1. Some may be considered suspects, while others may be con-
sidered witnesses. Halvar Solheim, Reidar Mæland, Rune Stifjell,
FrodeSchultz, TorgeirJohnsen, Cissel Samuelsen, Ingrid Lønhaug, and
Elin Einarsen were not laestadians. Among these people, Halvar
Solheim, Reida rMæland, Rune Stifjell, and Ingrid Lønhaug may have
benefitted financially from cooperating with the laestadians.
In addition to interviews listed in the table, investigators had shorter
conversations with former and current board members at Årvikbruket
Eiendom: Elin Merete Johannessen, Irene Toresen, KolbeinSimonsen,
Pernille Jørgensen, and Kurt Michalsen. Although bailiff Henning
Engen was interviewed by investigators on January 7, 2015, the interview
is omitted in the list of intervjuews in KomRev’s (2015) report on page
26. Henning Engen thinks the reason why he is not on the list is that the
interview was simply not planned (email from Henning Engen on January
1, 2016):
Table 7.1 Actors in the Skjervøy case and completed interviews by KomRev
(2015)
Person Roles at Skjervøy Interviewed
Roy Waage He has been mayor of Skjervøy for 16 years, deputy mayor 21.11.2014
for 8 years, chairman of Skjervøy Fisheries Development, 26.03.2015
chairman of Industrial Park Skjervøy, general assembly 29.04.2015
alone for company owned by the municipality, hand- 06.05.2015
picked board members for various companies, denied
other politicians insight into publicly owned companies
by referring to company regulations and laws.
Halvar Chief accountant for ÅrvikbruketEiendom, chairman of 26.03.2015
Solheim the board at Årvikbruket and previous accountant for
Industrial Park Skjervøy, appointed by Roy Waage as
Skjervøy municipality’s representative on the board of
North Troms Energy. In addition, board member at
Kvænangen Power Station, Arnøytind, and Arnøy- and
Laukøy-ferry. Contact person at Årvikbruket Eiendom,
Skjervøy Maritime Center and Redskapshuset.
Øyvind He has been chairman of the board at Industrial Park 16.02.2015
Isachsen Skjervøy and at ÅrvikbruketEiendom. Surveyor and
leader of Skjervøy church ward. He estimated the value
of ÅrvikbruketEiendom at a time when he was chairman
of the board, on behalf of Årvikbruket.
Håvard Board member at Årvikbruket and Årvikbruket Eiendom. Not
Albrigtsen President at Brødrene Albrigtsen. interviewed
Andor He owns 24% of Årvikbruket. Not
Albrigtsen interviewed
Ørjan Current mayor and representative of the Coastal Party on Not
Albrigtsen the municipality council. interviewed
Reidar He was councilman in the municipality. 26.03.2015
Mæland
Rune Stifjell He was chief financial officer in the municipality. Not
interviewed
Dag Roar Retired chief of police for the region. Not
Stangeland interviewed
Torgeir He has been mayor in Skjervøy municipality and 03.12.2014
Johnsen chairman of the Skjervøy Fisheries Development.
Cissel Council leader at Skjervøy kommune. 05.06.2014
Samuelsen
Ingrid Current deputy mayor and representative of the Labour 16.02.2015
Lønhaug Party on the municipality council and previous member
of the board of Skjervøy Fisheries Development.

Person Roles at Skjervøy Interviewed
Frode Shultz Consultant in the municipality administration at 16.02.2015

Skjervøy.
Helge He has been board member of Skjervøy Fisheries 17.02.2015
Andersen Development.
Elin Einarsen He has been board member of Skjervøy Fisheries 17.02.2015
Development.
Einar He has been board member at Skjervøy Fisheries 26.02.2015
Lauritzen Development.
Henning Bailiff at Troms police district, Skjervøy sheriff’s office, 07.01.2015
Engen since 2006. Retired chief financial officer submitted
only two cases from the municipality to the bailiff from
2006 to 2013. After Stifjell left, the municipality has
submitted hundreds of cases to the bailiff. In 2014,
Engen as bailiff has an increase of 30% in cases at
Skjervøy sheriff’s office.
Osvald Tax collector at Skjervøy. He revealed the scandal at Not
Isaksen Skjervøy sports club. He has raised a number of issues interviewed
with auditors about misconduct in the municipality.
I documented a number of dubious/illegal acts. I think simply Lars-André

Hanssen (chairman of KomRev) has censored my interview and will not use
the information I provided, because it may appear in retrospect what bad job
KomRev has done for years as auditors in Skjervøy municipality. This is
probably the reason why they never interviewed the tax collector at Skjervøy.
He has for years raised issues concerning illegal circumstances and crime in
the municipality without auditors acting on documented misconduct.
Kom Rev-leader Lars André Hanssen responded to these accusations to

me in an email January 4, 2015:
Henning Engen, who had no formal roles in any of the companies or

businesses under investigation, is generally referred to as “others.”
Some of the actors in the Skjervøy case were not interviewed at all by
investigators. KomRev (2015) argues that they have interviewed key
people in the municipal companies Årvikbruket Eiendom, Skjervøy
Fisheries Development, and Industrial Park. A key person is Håvard
Albrigtsen, who was member of the board of Årvikbruket at the same
time as he was involved in municipality companies. Investigators might

have interviewed him about where the money went.
When the committee for control in Skjervøy municipality received the
investigation report from KomRev (2015), they were not quite happy with
it. Although they found the report thorough and detailed, they found the
report’s assessments, conclusions, and summary vague and in many
instances difficult to understand: “The combination of a very detailed
report and unclear conclusions and summaries have made the report
difficult available.”
Table 7.2 shows the committee’s evaluation of the report of investiga-
tion in relation to the mandate. Out of eight tasks in the mandate,
KomRev (2015) has completed four tasks to their satisfaction (Yes),
while four tasks were not completed (No). This implies that investigators
have not performed the inquiry as defined in the mandate. Investigators
have only completed half of the tasks described in the mandate from the
control committee in Skjervøy municipality. Therefore, the only issue in
Table 7.2 Evaluation of investigation report in relation to investigation mandate

Mandate Report of investigation completed the task?
1 Complete overview of Yes, neat overview of many grants, receipts,

transactions disbursements, and loans.
2 Statement on statutes and Yes, orderly enumeration of criteria based
guidelines on statutes and guidelines.
3 Comparison between the No, ambiguous conclusion where not
criteria and practices determined whether the payments were in
line with board decisions.
4 Comparison between No, fuzzy conclusion that decisions on cases
rules and practices might not have happened contrary to the
rules that applied to decisions in Skjervøy Fisheries
Development, including eligibility rules.
5 NOK 3.1 million Yes, Årvikbruket Eiendom’s payment of invoice from
Årvikbruket, which does not satisfy requirements to
a valid sales document, is a violation of provisions in
the bookkeeping regulations
6 NOK 4.5 million No, no conclusion.
7 NOK 2.5 million No, no conclusion
8 Security and control of Yes, investigator concludes that there were
loans and grants established some general control procedures to
ensure that payments form the company was used for
the purposes they were granted for.
the investigation report that could be followed up by the municipality

council and reported to the police, was issue number 5 in the mandate
concerning possible abuse of 3.1 million in Årvikbruket.
Suspected white-collar crime should be investigated both in terms of
possible crime and in terms of potential criminals. Unfortunately, KomRev
(2015: 135) did not do the latter:
Investigators have found no reason to question whether some of the deci-

sions of the board of Skjervøy Fisheries Development had particular signifi-
cance for board members own benefit or anyone close to them such that
they had to be regarded as having prominent personal or financial interest in
the matter and thus were not objective.
CONVENIENCE IN THE ECONOMICAL DIMENSION

The report of investigation from KomRev (2015) must be understood in a
larger context. The investigation was implemented as an extraordinary
examination, where examiners have to reconstruct and evaluate what
happened. The following is some of the media attention that has taken
place in the Skjervøy case so that the investigation report can be under-
stood in a larger context.
In 2010, journalist Solvang (2010) revealed that Waage earned NOK 3
million on municipal land speculations, and that he withheld information.
This happened under the auspices of the Industrial Park, which is housed
in the premises of the old shipyard in Skjervøy.
A well-known suspicion on the island is that Øyvind Isaksen wrote a
fake application for funding, where he knew that the money would not be
used for renovation. He is also accused of having accepted an invoice he
knew was false. Another notable suspicion is that invoices might have been
used for the unwarranted return of VAT. Øyvind Isaksen shall knowlingly
have used incorrect information in the application to get grants from
Skjervøy Fisheries Development. Some of the money might have ended
up in the Coastal Party. Isaksenis thus was suspected of fraud in
Årvikbruket. Håvard Albrigtsen may have contributed. The same applies
to Halvar Solheim as an accountant (Solvang, 2006). Thus, the motive of
the suspected crime might have been to support their own party to win the
next election.
In addition to making money on municipal land speculations, Roy Waage

was also suspected of payments, although he knew that equipment was to be
leased, not bought. Waage was accused of providing a fictitious mortgage
certificate that had no value. The purpose might have been to deceive the
other board members of Skjervøy Fisheries Development and the municipal
council to make them believe that the company had a pledge in the equip-
ment. Many on the island accuse Waage of fraud. Waage was personally
involved in both Skjervøy Seafood and the Industrial Park.
Agnew (2014) suggests that misconduct can occur when people have
more considerations for others than their own interests. He suggests that
social concern may be present rather than simple self-interest. Most lead-
ing theories and control policies are based on the assumption that people
are self-interested. However, people can be both self-interested and
socially concerned. Social concern involves biologically based inclinations
that sometimes lead people to give more consideration to others than to
their own interests. A prominent member of a church can feel strongly for
the greater good of the community and wants to serve members as
successfully as possible. Personal inclinations include caring about others,
forming close ties to and cooperating with others, following certain moral
intuitions, and conforming. Social and religious factors shape social con-
cerns. Social concern may have direct, indirect, mediating, and condition-
ing effects on misconduct and potential crime.
In addition to Agnew’s (2014) theory of social concern, other theories
can as well shed light on the Skjervøy case in the economical dimension of
convenience. Strain theory suggests that unorthodox and simple solutions
are sought when a situation becomes complex and threatening (Langton
and Piquero, 2007). Fear of falling theory suggests that people in leading
positions are afraid of consequences from failure and therefore try to
survive in their positions by applying various means (Piquero, 2012).
The theory of goal orientation implies that when ambitious goals are set,
and individuals are strongly committed to the goals, then goal achieve-
ment is much more important than how the goals are achieved
(Jonnergård et al., 2010).
CONVENIENCE IN THE ORGANIZATIONAL DIMENSION

Roy Lennart Waage (born 1963) was the leader in the Coastal Party from
2005 and was re-elected mayor in Skjervøy municipality in 2007. The
municipality has for many years been characterized by secrecy and by
alleged scandals in connection with the protocols of the boards of compa-

nies wholly owned by the municipality. Those who demanded answers to
difficult questions should get it. But it never happened (Solvang, 2013a).
Through twelve years as mayor, Roy Waage built a powerbase in the
community. The powerbase is founded on a tight family network in the
laestadian environment on the island of Skjervøy. It was the newspaper
Nordlys with journalists Thor Harald Henriksen and Ola Solvang who
revealed that Waage had violated tax law, cheated the auditor, and lied to
the tax collector (Henriksen and Solvang, 2007).
Laestadians belong to a Lutheran church revival movement that was
started by the Swedish priest Lars Levi Laestadius in Swedish Lapland.
Alcohol abuse was one of the most important things Læstadius wanted to
change. Laestadians are known for their abstinence and their strict form of
Lutheran Christianity. In addition to Waage and others interviewed by
KomRev (2015), the head of the economic crime team in Troms police
district is also assumed to be a laestadian.
The investigation report by KomRev (2015) conclude according to
Solvang (2015a) that there was systematic misconduct in Skjervøy muni-
cipality. Solvang (2015a: 2–3) wrote that it is all about concentration of
power, secrecy, and dark shortcuts through legal borders:
The report paints a picture of local government at its worst. Here we have a
mayor who deliberately leads his colleagues in the council behind the lights
into the dark. In one of the cases, he issued a worthless mortgage state-
ment, according to Roy Waage himself, with only one purpose in mind: to
put an end to the hassle of critical opposition politicians. There was a
chairman of a municipality company who accepted a specified invoice of
NOK 4.8 million. In retrospect it was found few traces of the alleged
construction work.
A convenience aspect of white-collar crime is that the police is often

reluctant to investigate suspicions of financial crime. The police finds it
hard to figure out what is legal and what is illegal in organizational
settings. Investigators in Troms police district dismissed the Skjervøy
case twice (Solvang, 2015b: 18):
Friday this week, the control committee in Skjervøy discussed the latest version
of the investigation report concerning the use of 15 million from the municipal
fisheries fund. A previous police investigation was dropped by the financial
crime team in Troms police distric. The new inquiries have revealed that no one
is able to account for the millions that were allocated to upgrade and renew
municipally owned buildings in Årviksand on Arnøya. Fraud examiners have
also revealed that the privately owned fishing company, which was leasing the
municipal building, sent invoices for work that was not performed.
The police never checked the state of the alleged newly renovated fish
factory. When KomRev (2015) vent on inspection by an authorized
surveyor, it could be concluded that several of the alleged upgrading
measures, which were billed by 4.8 million in 2009, never was completed.
The police had in its first review in 2011 ignored this information.
In its second review in 2015, the police again ignored this information
and dismissed the case. Prosecuting police attorney Einar Sparboe Lysnes
dismissed the case in December 2015. Troms police district would not
investigate the Skjervøy case, and Lysnes gave the following reason
(Solvang, 2015d: 19):
• I would like to emphasize that Skjervøy municipality has not sub-

mitted a review to the police but requested further investigation of
any criminal activities surrounding the management of funds from
Skjervøy Fisheries Development.
• Have the police concluded that there is no offense committed in this
case?
• No. We have done an overall assessment to suggest that we should
not investigate it. The case is about circumstances that can be found
far back in time, and we have previously looked at it without finding
any criminal offenses. It would be a comprehensive job to start up a
new investigation. We have scarce resources and concluded that we
do not want to give priority to this matter. In all cases, and in
particular in matters within the category of economic crime, we
must ask ourselves the following question: How likely is it that illegal
offenses are committed? How costly will it be to find these potential
offenses, and will there be any company or individual who can be
held criminally responsible? And not least, will we be able to prove
guilt, says Einar Sparboe Lysnes.
The organizational convenience can here be found in the likely dismissal of

white-collar crime cases such as the Skjervøy case by the police (Solvang,
2015c).
Roy Waage as mayor for many years designated board members in

enterprises owned by the municipality. He worked closely with council
chairman Øyvind Isaksen in the church, who was at the same time chair-
man of the municipal company that got NOK 3.8 million municipal
money to renovate the fish factory. The money was handed over to a
private company where Isaksen had close family ties to one of the owners
(Solvang, 2015e).
Roy Waage was also involved in the sports club at Skjervøy (Solvang,
2007). When the club was short of money, he got municipal money to
fund it. Salary payments to staff personnel in the club were to report to
tax authorities. Therefore, Waage was suspected of both misappropria-
tion of public funds and tax evasion (Fjellheim, 2007; Henriksen and
Solvang, 2007).
Benson and Simpson (2015) suggest that opportunity is the most
prominent characteristic of white-collar misconduct and crime.
Opportunity arises from positions such as mayor of Skjervøy, council
member in the municipality at Skjervøy, chairman, and board member in
companies owned by the municipality of Skjervøy, leader of the church
congregation at Skjervøy, and owner of private companies doing business
with Skjervøy municipality. Opportunity theory emphasizes legal access to
premises and resources for misconduct, distance from potential victims,
and manipulation within regular and completely legal activities and
transactions.
In addition to Benson and Simpson’s (2014) opportunity theory, other
theories can as well shed light on the Skjervøy case in the organizational
dimension of convenience. Institutional theory suggests that misconduct
and crime may emerge in organizations with morale collapse as a conse-
quence of missing flow of ideology, regulation, ideas, and mutual influence
(Bradshaw, 2015). Agency theory suggests that the principal is not able to
control an agent because of lack of insight and access to activities performed
by the agent in roles such as mayor or chairman (Eisenhardt, 1985).
CONVENIENCE IN THE BEHAVIORAL DIMENSION

Laestadianism holds that when a Christian has committed a sin such as
crime, whether in thought or in deed, she or he should confess the sin to
another believer. Thus it is a common practice among laestadians in or out
of church at any time, but especially during the church service prior to the
rite of holy communion, to be confessing their sins to one another or,
occasionally, to one of the church ministers performing the sacrament. A

common declaration is, “Believe your sin(s) forgiven in Jesus’ name and
(shed) blood.”
Because a laestadian takes very seriously the proposition that grace exists
only for one whose sins have been specifically forgiven, there is scarcely
another rite in this movement that would rival the importance of the
declaration of forgiveness. This doctrine is a unique extension of the priest-
hood of the believer doctrine. The priesthood of all believers is a doctrine
that Christians share a common priesthood in that they have direct access to
God through their prayers without requiring a human mediator. The
central activities of laestadians are frequent church conventions. The
Lutheran laestadian congregation meets in the church at Skjervøy, where
everyone learns about the laws of God that are to be followed.
Laestadians moved from another island to Skjervøy in the 1950ties,
when they no more could practice their own rules, laws, and criminal
justice on the other island. They moved almost collectively from one
municipality to another, creating strong bonds of solidarity and loyalty.
It is probably more important to adhere to the laestadian faith and practice
than to Norwegian laws and regulations. Laestadians emphasize the doc-
trine of sin and forgiveness, just remorse (over sins) and charity. The
repentant sinner received absolution through requesting this from a
Christian he or she has confidence in or through confession at supper in
the church. You do not tell public authorities about misconduct or crime
by fellow leastadians. What the person did might have been the will of
God, so violating Norwegian law is then not a sin.
On the island of Skjervøy, there still exists what is perceived as a closed
network, mainly laestadians, who refuses to provide access and insight into
municipal activities and companies. They refuse general assembly’s access
to share protocols of meetings and minutes (Solvang, 2013b). They argue
that the fish factory has been renovated when everyone else can see no sign
of it. It is alleged that they lie without blinking their eyes to protect
themselves, and they steal from the community without feeling guilt.
When they are revealed and confronted, they still refuse—here there
seems to be no repentant sinners asking for forgiveness from society.
Obedience theory suggests that individuals may engage in behaviors
that conflict with their personal values and beliefs if they are subjected to
pressures to obey someone in authority. According to this theory, indivi-
duals rationalize their behavior by essentially placing full responsibility on
the authority figure rather than taking any individual responsibility for the
action themselves (Baird and Zelin, 2009). The ultimate authority for a
Christian person is God, who is interpreted by priests and other prominent
members of the laestadian religious movement. Obedience pressure comes
from the authority of interpreting the laws of God rather than the laws of
Norway. In cases of misconduct and crime, incidents are reported to
fellow members of the church who provide forgiveness for sins.
In addition to Baird and Zelin’s (2009) obedience theory, other theories
can as well shed light on the Skjervøy case in the behavioral dimension of
convenience. Slippery slope theory suggests that it is hard to tell when you
are on the wrong side of the law (Welsh et al., 2014). Neutralization theory
suggests that there is no guilt feeling because victims are hard to find (Sykes
and Matza, 1957). Self-control theory suggests that lack of self-control
more easily leads to misconduct and crime (Gottfredson and Hirschi,
1990). Differential association theory suggests that it is more convenient
to conform to the norms advanced by or embraced by those in the church
rather than to deviate in opinion from fellow associates (Sutherland, 1983).
WHITE-COLLAR CRIME IN RELIGIOUS ORGANIZATIONS

Financial crime in organizational settings where the common denomina-
tor is faith is extremely difficult to detect, investigate, and prosecute. Only
by exception are white-collar criminals caught and brought to justice. Are
Blomhoff was a respected Methodist pastor and managing director of the
Betanien Foundation in Bergen in Norway. He was convicted to prison for
embezzlement and fraud against the foundation. Based on the Betanien
case and other similar cases, it is relevant to phrase the following questions:
Is there too much trust, too much freedom, too much individual author-
ity, too little skepticism, too much loyalty, and too little control of the
financial side in religious organizations? Is trust often betrayed in terms of
white-collar crime in religious institutions (Fleckenstein and Bowes,
2000)? According to Owens and Shores (2010), most white-collar crime
incidents are exploitations of trust, which can be fostered by a shared
religious identity between the victim and the perpetrator. Are social
religious networks an attractive arena for white-collar criminals (Shores,
2010)? Is the morale of not acting illegally blinded from a chance per-
spective when an attractive opportunity arises? Do shared religious beliefs
lead to less acceptability of white-collar crime (Corcoran et al., 2012)?
Many questions are asked and can indeed be put forward concerning
white-collar criminals in religious organizations.
These issues were discussed in the presentation of the Norwegian case

of Are Blomhoff at the Betanien Foundation earlier in this book. Heaton
(2006) found no empirical evidence for the proposition that religion has a
deterrent effect on crime, although sociologists and criminologists have
long recognized the potential links between religious belief and delin-
quent behavior. Hofmann et al. (2014) found that religious and nonreli-
gious participants did not differ in the likelihood or quality of committed
moral and immoral acts. Some may argue that it is the will of God, and
therefore they can violate the law. Some religious individuals portray
themselves as more moral than others (Arnesen, 2014).
Valland (2015) reported a case of a father and son, where the son was a
pastor in a church as well as employed in the Norwegian military. Father
and son were indicted of having swindled the military of several million
Norwegian kroner. The father was accused of setting up a fake company
from which the son bought and paid for fake services to the military.
Thompson and Schmitt (2007) reported the case of Major Cockerham,
who was active in the New Friendship Baptist Church. The congregation
in the church celebrated Cockerham’s last promotion with a parade. At his
son’s baptism, he told fellow worshipers that he hoped to instill in his
children the values he had wrested from his hardship. Crockerham was
sentenced to 17 and ½ years in prison for accepting bribes from Army
contractors (Thompson and Schmitt, 2007).
In the Skjervøy case, nobody is prosecuted or convicted. Several were
suspected of misconduct and crime. The religious network and milieu feel
invincible, and so far they have been right. The police district and the
regional sheriff seems to have kept their eyes shut since 1996. There have
been a number of misconduct cases involving possible crime over the years,
which has been revealed in the media. The regional sheriff always protected
the gang. Some inhabitants on the island of Skjervøy do not hesitate to call
it mafia business, where a handful of people have enriched themselves at the
population’s expense. They have abused the trust they have in terms of their
positions. Many found it overdue to get them stopped in 2016.
What may seem remarkable in 2016 is that the economic crime team in
Troms police district do not follow leads identified by KomRev (2015).
They could have chosen to say that they now actually have some new
information on the case and start a police investigation into the matter
(Solvang, 2015c).
CHAPTER 8
Conclusion
Abstract This chapter introduces a stages-of-growth model for corporate

social responsibility (CSR). CSR should include corporate actions to con-
tribute as an active citizen in society to detect and prevent white-collar
crime. White-collar crime undermines institutions in society and creates
distrust to the elite that manages organizations in society. CSR implies
that the organization is looking for opportunities in society where the
organization can make a difference.
Keywords corporate social responsibility maturity levels stages-of-

growth model society
This book has used fraud examination reports as case studies from the
USA and Norway to develop the concept of convenience toward a theo-
retical understanding and explanation of white-collar crime. Hopefully,
this scholarly analysis has made a contribution to the much needed focus
on financial crime and to those whose research is in this sphere.
Intellectual interests have traditionally clustered within criminology, but
this subject matter is also drawing in others, including scholars of manage-
ment and organizational behavior.
Norway is a small country with five million inhabitants. Some global
companies have their headquarters in Norway. Examples include fertilizer
company Yara and telecommunication company Telenor. Both companies

DOI 10.1007/978-3-319-44986-9_8
operate in a number of countries worldwide. They are expected to respond

to the globalization challenge by acknowledging a new political role of
business that goes beyond mere compliance with legal standards and
conformity with general ethics. However, both companies have been
caught in corruption scandals. The Norwegian National Authority for
Investigation and Prosecution of Economic and Environmental Crime
(“Økokrim”) was prosecuting executives from both companies in
Norwegian courts in 2015 and in 2016. While Yara executives were
prosecuted for corruption in Libya, Telenor executives were prosecuted
for corruption in Usbekistan through the partly owned subsidiary
Vimpelcom.
The Yara and Telenor cases illustrate that Norwegian chief executives
can be held responsible for wrongdoings and misconduct even if they
personally were not involved. Chief executives are held responsible for
whatever goes on in the organization that they are heading, including
crime. Furthermore, the cases illustrate that Norwegian chief executives
have not yet understood their responsibility for CSR in general and
certainly not for political CSR. Most executives still believe that CSR is
concerned with doing good symbolic deeds in local societies by behaving
so as to create an image of philanthropists.
In this section, we suggest that the powerful concept of stages of
growth is extremely important in management research. Stages of growth
models have been used widely in both organizational research and infor-
mation technology management research. These models describe a wide
variety of phenomena. These models assume that predictable patterns
(conceptualized in terms of stages) exist. The stages are (1) sequential in
nature, (2) occur as a hierarchical progression that is not easily reversed,
and (3) involve a broad range of organizational activities and structures.
Researchers have struggled for decades to develop stages of growth
models that are both theoretically founded and empirically validated. A
number of multistage models have been proposed which assume that
predictable patterns exist in the growth of organizations, and that these
patterns unfold as discrete time periods best thought of as stages. These
models have different distinguishing characteristics. Stages can be driven
by the search for new growth opportunities or as a response to internal
crises. Some models suggest that an organization progresses through
stages, whereas others argue that there may be multiple paths through
the stages. Therefore, a stage of growth theory needs to allow for multiple
paths through stages as long as they follow a unidirectional pattern.
8 CONCLUSION 109
Maturity models can have varying number of stages, and each stage can
be labeled according to the issue at hand. Here we suggest the following
four stages of growth for CSR, as illustrated in Fig. 8.1:
1. Business stage of profit maximization for owners within the corporate

mission. At this basic maturity level, the company is only concerned
with itself and its owners. In addition, the company seeks to please
its customers so that they will continue to buy its goods and services.
The sole responsibility corporations have is that of maximizing
profits to shareholders while engaging in open and free competition,
without deception or fraud. To make decisions that serve other
interests at the expense of shareholders would constitute a breach
Level of
CSR
maturity Stage IV
Contribution Level
Activating corporate actions Corporate
to contribute as an active executives look
citizen in society for opportunities
in society where
the company
can make a
Stage III difference.
Resource Level
Mobilization of corporate The company is prepared for crisis
resources to be employed in management as well as opportunity
cases of emergency exploration and exploitation.
Opportunities may emerge where
corporate executives will implement
opportunistic behavior to gain from
Stage II opportunities in terms of
Function Level trengthening corporate reputation.
Establishing CSR function
Out of necessity and
within the company for risk
external expectations, a
assessments
CSR function is established
within the company staffed
with individuals who have a
Stage I business perspective.
Business Level
The only responsibility corporations
Maximizing profits for have is that of maximizing profits to
shareholders without any shareholders while engaging in
other obligations open and free competition, without
deception or fraud.
Development over time
Fig. 8.1 Stages of growth model for corporate social responsibility

in trust and loyalty. It would be like taking money away from owners
and resemble a kind of theft. According to this perspective, corpo-
rate executives do not have the right to behave like modern Robin
Hood types, taking money from the rich and giving it to the poor.
2. Function stage of establishing a function for corporate social responsibility
in the company. At this second maturity level, business executives have
understood that they need to address company relationships with the
outside world in a professional manner. Out of necessity and external
expectations, a CSR function is established within the company staffed
with individuals who have a business perspective. The function here is to
survey implications of business activities in the external environment;
to develop intelligence to learn about external reactions to business
practices; and to conduct risk assessments in terms of effects on corpo-
rate reputation. Corporate social responsibility can be defined here as a
process. The process implies that corporate leaders in the organization
reflect over, and discuss, relationships with stakeholders and partners.
The process also implies that corporate leaders identify their own and
the organization’s roles in relation to societal conditions and societal
utility. This kind of reflection and discussion will cause them to endow
their roles with relevant content and action.
3. Resource stage of resource mobilization for potential threats and
opportunities. At this level, we find a complete, yet passive form of
corporate social responsibility. It represents a reactive strategy where
the company has mobilized resources for cases of emergency. The
company is prepared for crisis management, as well as opportunity
exploration and exploitation. Opportunities may emerge where cor-
porate executives will implement opportunistic behavior to benefit
from opportunities in terms of strengthening corporate reputation.
CSR, at this level, is a concept that causes the company to integrate
principles of social and environmental responsibility and induces
engagement in the company’s activities, both internally and exter-
nally. Two perspectives emerge from this definition. First, CSR
implies a strong link to internal business processes; second, interac-
tions with stakeholders and the society at large also require the
involvement of stakeholders and the society at large, in terms of
their relationships to the company.
4. Contribution stage of proactive involvement in society. At this
final maturity level, corporate executives as well as all other organiza-
tional members perceive their business as part of a greater course in
8 CONCLUSION 111
society. They adopt a comprehensive and active responsibility in

both the local and the global society, and they look for opportunities
in society where the company can make a difference. At this level of
CSR, short-term loss to the company can be acceptable when
weighed against the long-term good to society. CSR at this level is
a long-term commitment to society (Mostovicz et al., 2009).
Evidence is emerging that long-term citizen commitment on the
part of the company by no means has to harm corporate profitability:
in either the short-term or the long term.
We argue that political CSR can be found at the contribution stage.

Executives understand their business as part of a greater course in
society. Since Gjensidige executives seem reluctant to act in the Hells
Angels clubhouse case, we argue that Gjensidige is not at stage 4 in the
growth model for corporate social responsibility. Although the claim
involves an insignificant amount of money, which is almost impossible
to retrieve, the claim has a greater value in that it could help both the
municipality and the police in fighting organized crime in society
(Gottschalk, 2013).
Researchers argue that corporations ought to step up to the challenge
of political CSR and take on new political responsibilities (Basu and
Palazzo, 2008; Palazzo and Scherer, 2006; Scherer et al., 2006). They
suggest the concept of corporate political responsibility or political corpo-
rate social responsibility (Scherer and Palazzo, 2011: 901):
Political CSR suggests an extended model of governance with business firms

contributing to global regulation and providing public goods.
A new theory of the firm is called for, since the old way of thinking is
outdated (Scherer and Palazzo, 2011: 901):
We suggest that, under the conditions of globalization, the strict division of

labour between private business and nation-state governance does not hold
any more.
In order to clarify what the concept of political CSR means and in which
way it is distinguished from earlier approaches of corporate responsibility,
they put up a contrast between political CSR and stakeholder theory. Both
of these approaches imply that corporations have commitments toward
society, but the scope of these commitments differs. Stakeholder theory

suggests that corporations are responsible toward those who are affected
by the results of corporate activity, whereas political CSR goes beyond this
and argues that corporations have a general commitment to work for the
good of society. These extended commitments arise from the global
nature of the challenges facing humanity (Scherer and Palazzo, 2011:
910):
In contrast to stakeholder management which deals with the idea of inter-

nalizing the demands, values, and interests of those actors that affect or are
affected by corporate decision making, we argue that political CSR can be
understood as a movement of the corporation into the political sphere in
order to respond to environmental and social challenges such as human
rights, global warming, or deforestation.
Of course, on the basis of a broad concept of the stakeholder concept, one

could argue that there is no practical difference between these two per-
spectives, since certain decisions by big business might directly or indir-
ectly affect more or less the entire global society. However, the difference
lies in the justification. Normative stakeholder theory finds moral commit-
ments in the mutual relationship between corporations and stakeholders,
whereas political CSR points to a more general corporate duty arising from
the political power of corporations.
Scherer and Palazzo’s (2011) normative standpoint regarding the poli-
tical commitments of corporations are based on a realization of the global
challenges we face, and on the more or less pragmatic point that corpora-
tions are in the best position to take on these challenges.
However, the ascription of increased political responsibility inevitably
points in the direction of a strengthening of political rights. Scherer and
Palazzo (2011) are not blind to this problem when they discuss the
democratic deficit of the growing engagement of business firms in public
policy. Their claim is that globalization is a given and not something we
can opt out from, and that this makes a new perspective on CSR necessary
and unavoidable (Scherer and Palazzo, 2011: 906):
In order to respond to the globalization phenomenon and the emerging

post-national constellation, it is necessary to acknowledge a new political
role of business that goes beyond mere compliance with legal standards and
conformity with moral rules.
8 CONCLUSION 113
In line with the idea of corporate CSR, corporations are responsible for
contributing to social security and crime prevention. Rather than present-
ing themselves as victims of financial crime, corporations need to step up
to their responsibility in terms of:
• Offenders in crime. Corporations enable white-collar crime and

participate in white-collar crime. They need to take on the responsi-
bility of offenders.
• Detectors of crime. Corporations need to introduce efficient preven-
tion mechanisms rather than window-dressing routines such as com-
pliance guidelines.
• Preventors of crime. Corporations have to apply their powers to
prevent crime in society.
Under the conditions of increasing globalization, governments tend to

lose some of their capacity to regulate and control, and private corpora-
tions must step in. A renegotiation of the social contract seems currently
to be taking place. Society does not primarily exist to enable corporations
to make money. Rather, corporations exist to produce goods and services
that benefit society. If corporations fail in their obligations to cover needs
for goods and services within a responsible framework, then society may
change the rules of the game, for example, by abolishing capitalism and
market places. Corporations are to serve society more than society serves
corporations.
Does it make sense to hold a company responsible for cleaning up a
river it has not helped pollute, sheltering the homeless it has not deprived
of property, or fighting corruption even when it has not been part such
activity? Political CSR is often discussed in abstract terms with a focus on
grand challenges such as climate change and global poverty alleviation. In
contrast to such discussion, the case of white-collar crime that we are
dealing with in this book is concrete and manageable: The company is in
a position to make a difference, but should we expect it to, even if it
probably does not pay to do so?
Swiss business ethicists Andreas Scherer and Guido Palazzo are among
those who argue that we should expect more from companies in terms of
contributing to the common good. Their concept of political CSR starts
out from the description of a situation where transnational corporations
have become global political actors with significant economic and political
power.Scherer and Palazzo (2008: 416) define globalization as:
The process of intensification of cross-area and cross-border social relations

between actors from very distant locations, and of growing transnational
interdependence of economic and social activities. Globalization processes
can be viewed as ideological transitions, where stakeholders and national
legislation as well as international norms and initiatives create new expecta-
tions towards business.
Corporate social responsibility is only one approach to reduce the number

of white-collar crime occurrences. Governance structures have to effect
opportunities in the organizational dimension of convenience theory.
Detection risk has to rise to a much higher level than today. A number
of other actions can also be implemented to fight white-collar crime.
In conclusion, this book has contributed to the empirical study of
convenience as an important explanation for white-collar crime. Future
research is possible in a number of directions. First, the causality in the
model linkeing three dimensions of convenience needs much more work.
For the current version, critics may suggest that correlation rather than
causality is the proper terms to use. The model needs to be turned on its
head where the research takes on board all convenience and inconvenience
in relation to the topic and research material. Furthermore, it might be
useful to conduct an analysis of convenience among individuals who have
not been convicted or accused of white-collar crime. Finally, a larger
sample could enable generalization to fraud examinations in general.
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INDEX
A Coatesville school district, 36

Agency model, 15 Code of conduct, 80
American dream, 16, 51 Compensation committee, 81, 82
Andrew Fastow, 39, 52 Contribution level, 109
Appearance of legitimacy, 13, 21, 22, Convenience theory, 1–4, 5–31, 35,
27, 29, 77 40, 44, 46, 51, 56, 57, 61, 62, 68,
Audit process, 83 76, 83, 114
Convenient solution, 7, 11, 17
Corporate crime, 4, 11, 13–15,
B 20, 23, 25
Behavioral convenience, 54, 79–90 Corporate culture, 14, 54, 80
Bernard Ebbers, 43, 80–82, 89 Corporate social
Big business, 112 responsibility, 107–111, 114
Board meeting, 73, 81 Corruption scandal, 108
Board of directors, 53 Crime prevention, 3, 18, 113
Business expense, 83 Criminal activity, 26, 40, 41, 46, 47
Business lawyer, 59 Criminal behavior, 5, 17, 18, 20,
Business level, 109 23–25, 28, 70
Business organization, 2, 26
Business purpose, 82, 83–84
D
Desire for control, 18
C Deviant behavior, 12, 16, 22, 23,
Case study, 92 28, 89
Chief executive, 14, 35, 37, 44, 48, Differential association, 5, 17, 25, 28,
81, 88, 108 29, 79, 89, 105

DOI 10.1007/978-3-319-44986-9
130 INDEX
E K
Economical convenience, 51–60, 65, Kenneth Lay, 42, 52–54, 59
68 Kern Wildenthal, 82–84, 89
Elite in society, 28
Empirical evidence, 1, 70, 106
Enron energy, 36, 40 L
Legal function, 81
Legal transaction, 8, 48, 77
F Legitimate access, 13, 26, 77
Fear of falling, 16, 20, 29, 54, 79, 89, Lehman Brothers, 15, 35, 36
100 Local newspaper, 73
Financial crime, 1–4, 6, 8, 11–13, 15,
19–22, 24, 25, 27, 28, 35, 42, 45,
49, 56, 59, 68, 72, 75–77, 101,
M
105, 107, 113
Maturity model, 109
Financial statement, 39, 40, 42, 73
Motorola telecommunications, 36
Fraud examination, 1, 3, 34–35, 44,
107, 114
Function level, 109
N
Negative emotion, 17
G Neutralization technique, 16, 17, 23,
General Motors, 35, 36 25, 44, 58, 84
Globalization challenge, 108
Goal orientation, 27, 29, 30, 100
O
Occupational crime, 11, 13, 14, 20
H Opinion leader, 59
Harriette Walters, 42–43, 66 Opportunity perspective, 12
Organizational convenience, 54,
61–77, 102
I Organizational opportunity, 63, 76
Illegal means, 9, 26, 54 Organizational setting, 8, 15, 24, 25,
Internal investigation, 53, 56–58, 65, 68, 101, 105
65, 82
Investigation report, 1, 2, 33–35, 40,
44, 46, 53, 54, 56–58, 64–66, 68, P
73, 85, 98, 99, 101 Padakhep Bangladesh, 36
Pennsylvania crime commission, 54
Peregrine financial group, 36
J Personal business, 81
Jeffrey Skilling, 42, 52–54, 59 Philadelphia police department, 36, 40
INDEX 131
Police district, 75, 76, 101, Self-realization, 10, 20, 22, 60

102, 106 Self-respect, 59, 59
Police officer, 40, 42, 54–56, 60, 74 Slippery slope, 16, 19, 23, 29, 31, 79,
Political role, 108 89, 105
Power and influence, 25, 27 Social concern, 11, 29, 100
Private spending, 89 Social conflict, 17, 29, 79
Privileged individual, 23, 27, 28, 30 Social security, 113
Profit-driven crime, 9, 11, 20, 21, 29 Social ties, 13, 77
Psychopathic trait, 17, 20 Stages of growth, 108, 109
Public institution, 83 Stakeholder management, 112
Stock price, 43, 80, 82
R
Rational self-interest, 10, 11 U
Religious organization, 69, 71, University of Texas, 37, 82
105–106
Report of investigation, 34, 39, 42,
93, 94, 98, 99 W
Resource level, 106 White-collar crime, 1–4, 5–16,
19–31, 33, 34, 39, 44, 51–54,
56, 59, 61, 63, 66, 69–71, 75, 76,
S 92, 93, 99, 101, 102, 105, 107,
Sandstorm bank, 36 113, 114
Self-acceptance, 59
Self-assured, 59
Self-control, 16, 18, 29, 44, 46, 79, Y
84, 89, 105 Yusuf Acar, 34, 35, 37, 62–65, 76

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Explaining White-Collar Crime

ISBN 978-3-319-44985-2 ISBN 978-3-319-44986-9 (eBook)

© The Editor(s) (if applicable) and The Author(s) 2016

Cover illustration: Détail de la Tour Eiffel © nemesis2207/Fotolia.co.uk

Printed on acid-free paper

This Palgrave Macmillan imprint is published by Springer Nature

7 The Case of Skjervøy in Norway 91

Fig. 2.1 A conceptual model of crime occurrence based on

Table 2.1 Theoretical contributions to convenience in crime 29

Abstract Convenience theory provides a set of explanations of condi-

Keywords convenience theory ﬁnancial crime fraud examination report

© The Author(s) 2016 1

However, as pointed out by a blind reviewer of the book manuscript,

pool of private investigations in the two countries. It is certainly a chal-

Abstract A number of theories from criminology, management, sociology,

Keywords economical convenience organizational convenience

© The Author(s) 2016 5

results from the conﬂuence of appropriate motivation and opportunity.

THE CONCEPT OF CONVENIENCE IN CRIME

possible criminal actions. Convenience must be viewed as a signiﬁcant

existing literature or provide different answers to “how . . . ?”,

ECONOMICAL DIMENSION OF CONVENIENCE THEORY

receive personal bonus for goal achievement. Favorable circumstances can

ORGANIZATIONAL DIMENSION OF CONVENIENCE THEORY

and therefore, the majority of penalties to control individual violators are

The metaphor of “rotten orchards” indicate that it is sometimes not the

White-collar crime is illegal and unethical actions by agents of organiza-

(Williams, 2008), and purchasing managers are suspects of cheating their

From a criminological standpoint, the current ﬁnancial meltdown points

Similarly, Valukas (2010) found no wrongdoing at Lehman Brothers,

BEHAVIORAL DIMENSION OF CONVENIENCE THEORY

Many white-collar offenses fail to match this common-sense stereotype

The idea of neutralization techniques (Sykes and Matza, 1957) resulted

leader’s behavior on other employees and the organizational culture

A number of situational factors may inﬂuence the tendency toward

AN INTEGRATED EXPLANATION OF CONVENIENCE THEORY

Fig. 2.1 A conceptual model of crime occurrence based on convenience theory

relationships between the economic, organizational and behavioral

secure survival of the enterprise (Blickle et al., 2006) or to enable

(Adler and Kwon, 2002). Degrees of freedom grow as individuals

employees more passive (Piquero et al., 2010). Organizations lack-

The conceptual model shows that there is an economical level, an organi-

THEORIZING WHITE-COLLAR CRIME CONVENIENCE

organizations where people make their living. Some are employers,

who are to do what they are told. In knowledge organizations (end

employers who suffer loss from crime conducted by people asso-

A goal-orientation of most organizations, rather than a rule-orientation,

ahead of and after experiences have been collected and analyzed.

INTEGRATING WHITE-COLLAR CRIME THEORIES

Table 2.1 Theoretical contributions to convenience in crime

professional setting, they have favorable circumstances to commit crime

an umbrella term for a general theory of white-collar crime. Therefore, this

crime occurs. White-collar crime is viewed as arising not so much out of

Abstract Samples of reports of investigations from the USA and

Keywords fraud examiner investigation report United States Norway

© The Author(s) 2016 33

are the result of nonprobability purposive sampling, and thus I cannot

CHARACTERISTICS OF FRAUD EXAMINATION REPORTS

I. Introduction and executive summary

documents the private investigation into Acar’s procurement fraud at OCTO

SAMPLE OF REPORTS FROM THE USA

SAMPLE OF REPORTS FROM NORWAY

ANALYSIS OF REPORTS FROM THE USA

Table 3.1 Sample of US reports of investigations by fraud examiners