• Since its inception, the phrase "white-collar crime" has been linked with the well-educated and affluent.

It
was first used by criminologist Edwin Sutherland in 1939 who defined it as "a crime done in the course of his
occupation by a person of respectability and high social status “.

• White-collar crime is a nonviolent crime of deceit or concealment to obtain or avoid losing money or to gain
a personal or business advantage.

• Prior to Sutherland’s introduction of the concept of white-collar crime, the upper classes of society were
thought to be largely incapable of engaging in such criminal activity. Such a belief was so deeply entrenched
in society that when Sutherland first published a book on the subject, some of America’s largest companies
successfully sued to get the book heavily censored.

• We may use the "Fraud Triangle," a conceptual model, to help us comprehend the behavior of a white-collar
criminal. This concept is often used to understand the logic behind an individual's choice to commit fraud. A
person will commit fraud if they have pressure (incentive or motive), opportunity (absence of controls) and
rationalization (justification for wrongdoing).

• Pressure: a situation or incident that builds up stress and thus raises the need to commit fraud. a company
that has strict parameters in place deters an individual working in it from committing a crime whereas a
company where unethical and unlawful business practices are par, it can take a form of learned behavior.
This pressure could be a result of :

1. Bonuses based on a financial metric

to assess the performance of an employee one looks at the revenues and net income might create pressure
for employees to meet targets, which, in turn, may cause them to commit fraud to achieve the objective.

Dissatisfied from the pay or overlooked for promotion

2. Personal incentives

earn more money, the need to pay personal bills, greed, addiction, etc.

• Opportunity: it is the scenario or simply a condition or combination of circumstances that leads to the
occurrence of fraud.

1. Weak internal controls

processes and procedures that ensure the integrity of accounting and financial information. Weak internal controls
such as poor separation of duties, lack of supervision, and poor documentation of processes give rise to
opportunities for fraud.
2. Poor tone at the top
i.e. If the upper management and the board of directors’ commitment to being ethical, showing integrity, and being
honest – a poor tone at the top results in a company that is more susceptible to fraud.
3. Inadequate accounting policies
Accounting policies refer to how items on the financial statements are recorded. Poor (inadequate) accounting
policies may provide an opportunity for employees to manipulate numbers.

• Rationalization: White-collar criminals may be able to justify their actions as being for the benefit of the
corporation. They could Use the rallying cry, "Everyone does it." Another kind of reasoning is to portray
unethical activities as victimless crimes.
1. “They treated me wrong”
An individual may be spiteful towards their manager or employer and believe that committing fraud is a way
of getting payback.
2. “Upper management is doing it as well”
A poor tone at the top may cause an individual to follow in the footsteps of those higher in the corporate
hierarchy.
3. “There is no other solution”
An individual may believe that they might lose everything (for example, losing a job) unless they commit
fraud.
• The concept of the "Fraud Diamond" has been introduced to expand on the "Fraud Triangle," by Wolfe &
Hermanson which added a fourth model component: capability.
• It stated that personal qualities or internal traits and abilities have a significant influence in understanding
fraudulent behaviour. And it is the confluence of personality and circumstances that help explain why people
become white collar criminals. It includes ability to manipulate others, knowledge about corporate
governance or about technology, intellectual capacity
Pentagon
• Arrogance or lack of conscience is an attitude of superiority and entitlement or greed on the part of a person
who believes that corporate policies and procedures simply do not personally apply.

Causes of white-collar crime:

• Greed factor: Greed when paired with favorable conditions it is a social aspect connected to white collar
crime. Never ending demands of an individual make him look for short-cuts to maintain their level of
satisfaction. As a result, a greedy behavior, when paired with favorable conditions, has the potential to
motivate people to engage in immoral behavior.

• . Narcissistic disposition: narcissists believe that everyone around them is beneath them and less intelligent
than they are, they are persuaded to believe that no one will catch them if they commit a crime. They are
only concerned with what is beneficial for them, what will profit them, or what will help them advance in
their career They are always seeking for uncritical adoration and positive reinforcement from others.
However, their inflated sense of self frequently conceals unexpressed sentiments of inadequacy and
inferiority. they even have sentiments of entitlement.

• Corporate psychopathy: White collar criminals have an aspect of psychopathy or antisocial behavior. In
corporate psychopathy there is a lack of empathy, guilt, and regret When people exploit others for their
extremely personal purposes. On the face they appear normal but are always on the lookout for
opportunities to fulfil their deep-seated craving for power, prestige, and money. They are experts in swiftly
assessing circumstances and manipulating people to participate with their schemes.