Consequences of Whitecollar Crime

WHITE-COLLAR CRIME IS massive in its impact. It takes a toll on individuals specifically and society in general. Its toll can be characterized as economic harm, physical harm, and emotional harm. In terms of economic losses, criminologists agree that billions of dollars are lost annually to white-collar crime. In the savings and loan crisis alone, experts suggest that up to $500 billion was lost to fraud. Estimates from the federal government suggest that white-collar crime costs up to 15 times as much as street crime. Not included in these estimates are the enormous ancillary economic costs that come along with the prevention, investigation, and prosecution of these offenses.

Economic costs are also experienced by individual victims. Whereas the average robbery nets[Page 196] around $900, the average bank fraud amounts to about $100,000. White-collar crime victims often lose their entire life savings. Also, whereas one robbery usually only victimizes one person, a whitecollar scheme generally victimizes hundreds or evens thousands of individuals.

Physical costs also arise. It is not uncommon to hear of financial fraud victims experiencing health problems, but it is not just these white-collar crimes that lead to physical consequences. Unsafe products, unsafe working environments, and other corporate misdeeds cause far more deaths than are caused by criminal homicides each year. Attention to unsafe working environments surfaced when concern spread about exposure to asbestos in the 1980s. Today, individuals are still suffering the consequences of unsafe exposures to asbestos and other poisons and pollutants from decades ago.

There are also serious health consequences that are experienced by environmental crime victims. Love Canal is just one example: Between 1942 and 1953, the Hooker Chemical plant dumped its chemical wastes in an abandoned canal near Buffalo, New York. The canal was covered, and Hooker sold the property to a local board of education. An elementary school was eventually built on the site. In the mid-1970s, residents became aware of the problem. Investigators soon learned that residents near the canal had experienced a number of physical problems. One year, just one of 16 children born near the canal was born without any serious ailments.

Emotional costs also come along with whitecollar crime. The most cited emotional cost has to do with the loss of trust that society experiences. Just as traditional crime victims and their contacts experience a higher fear of crime after victimization, those directly and indirectly victimized by white-collar crime experience a similar sort of fear—fear about their finances, their well-being, and so on. In a similar vein, legal scholar John Coffee has described demoralization costs that come along with white-collar crime. When individuals hear of supposedly “well-respected” individuals getting away with things at work, they become more likely to transgress as well. White-collar crime's reach generally touches everyone. Brian Payne cites a study (2002) suggesting that one in three individuals is a victim of fraud every year. Taking this a step further, one could suggest that every individual in the United States is a potentially a victim of white-collar crime every three years.