CRS Re;~ortfor Congress
White-Collar Crime: A Conceptual
and Statistical Overview
Specialist in American National Government
Analyst in American National Government
February 2, 1994
Congressional Research Service The Library of Congress
WHITE-COLLAR CRIME: A CONCEPTUAL
AND STATISTICAL OVERVIEW
White-collar crime is often defined as criminal activity perpetrated by those
of higher socioeconomic status usually uiithin a business setting. Other
definitions emphasize the nature of the offense rather than the status of the
offender. White-collar crime has reached historic levels in the United States.
The role of the Federal government continues to expand as such crime is
perpetrated on an interstate or international basis.
The Violent Crime Control and Enforcement Act of 1993 (H.R. 3355,
formerly S. 1607), passed by the Senate on November 19, contains a number of
white-collar crime provisions, including consumer protection, financial
institution fraud and savings and loan prosecution, computer crime, and public
corruption. In addition, this bill amends statutes related to white-collar crime
to provide for improved enforcement against those who obstruct a Federal
auditor or engage in a continuing financial crime enterprise; creates a new
Federal health care fraud offense for any scheme to defraud a health care plan;
establishes penalties for violations of various Federal fraud laws when they
involve telemarketing swindles, especially those victimizing people over 55 years
of age; and establishes bankruptcy fraud as a new Federal offense. Legislation
containing white-collar crime provisions has been introduced in the House as
well. According to press reports, the House leadership has indicated that anticrime legislation, probably including such provisions, is likely to be passed
during the second session of the 103rd Congress.
First defined as "a crime committed by a person of respectability and high
social status in the course of his occupation," white-collar crime is an old
category of criminal offenses that continues to provoke debate about its exact
meaning. Critics of this definition have argued that "white-collar crime" may
include activities that are not against the law, so they cannot be called crimes;
that it fails to include some white-collar crimes that may not be connected to the
offender's occupation; and that it does not distinguish between crimes
committed by employees within a corporation and those committed by officers
for the corporation.
Statistics on the costs of such crime are difficult to obtain and lack
uniformity. One of the latest recent estimates made in a 1982 study by Peat,
Marwick, & Mitchell, suggested a minimum total of $200 billion.
Criminologists find it difficult to compile data that reveal the extent of
white-collar crime nationally. For example, although law enforcement officials
prosecute a growing number of white-collar crimes, they maintain that many
such crimes have few witnesses and demand highly specialized expertise to
discover. As a result, these crimes are likely to go undetected and uncounted.
Also, many cases of white-collar crime may never appear in statistical
compilations because violations are often handled by regulatory agencies.
WHITE-COLLAR CRIME: A CONCEPTUAL
AND STATISTICAL OVERVIEW
White-collar crime, generally defined as criminal activity perpetrated by
those of higher socioeconomicstatus often within a business setting, has reached
historic levels in the United States.' White-collar offenses may include crime
against consumers, businesses, financial institutions, and the government.
Modern society has created new opportunities for white-collar criminals:
telemarketing swindles, computer fraud, and environmental offenses.
Though State governments exercise their police powers to prosecute whitecollar crime within their jurisdictions, the role of the Federal government
continues to expand as such crime is perpetrated on an interstate or
international basis. This report provides a brief discussion of various concepts
of white-collar crime, and how it may be distinguished from street crime. Also,
it offers a statistical overview of the costs and extent of white-collar crime in the
United States. It does not provide statistics on drug-related or organized crime,
sometimes considered subcategories of white-collar crime.' It presents recent
Federal legislative initiatives to address the problem.
In 1939, the sociologist Edwin H. Sutherland introduced the concept of
white-collar crime and defined it as "a crime committed by a person of
respectability and high social status in the course of his oc~upation."~
enforcement oEcials and criminologists saw the concept of white-collar offenses
as a new way to categorize this form of crime, and to differentiate it from the
more traditional categories of violent and property crime. Though law
enforcement officials point out that the offense of white-collar crime existed
before Sutherland coined the term, many would agree with Sutherland that this
Sutherland, Edwin H. White Collar Crime. New York, Holt, Rinehart and Winston, Inc.,
1961. pp. 6-10.
Law enforcement officials generally agree that organized crime groups have placed their
illegal profits in legitimate businesses, and more recently, drug kingpins have done likewise. This
report focuses more on criminal elements originatingwithin legitimate business rather than those
which use such business to further already existing illegal enterprises.
Sutherland, Edwin H. Ibid, p. 9; Schlegel, Kip and Weisburd, David, eds. Introduction.
White Collar Crime Reconsidered. Boston, 1992. p. 3.
form of criminal activity is both extremely harmful and deserving of stringent
efforts to combat it.4
Sutherland's definition has been challenged by later sociologists and
criminologists. One critic argued that Sutherland's definition may include
activities that are not against the law, so they cannot be called crimes. Others
objected that white-collar crime, such as fraudulently claiming social security
benefits or purchasing on credit without intending to pay, may not be connected
to the offender's occupation. Still others questioned Sutherland's inclusion of
only those offenders with social status, or objected to his lack of a distinction
between crime committed by individual employees within a corporation and that
committed by officers for the corporation.
In 1989, the former director of the FBI defined white-collar crime as
The FBI categorizes white-collar crimes as those illegal acts
which are characterized by deceit, concealment, or violation
of trust and which are not dependent upon the application
or threat of physical force or violence. These acts are
committed by individuals and organizations to obtain money,
property, or services; to avoid the payment or loss of money
or services; or to secure personal or business a d ~ a n t a g e . ~
According to the Bureau of Justice Statistics, white-collar crime may include
business-related offenses, abuse of political office, crime involving high
technology, and some forms of organized crime-in short, those areas "where an
individual's job, power, or personal influence provide the access and opportunity
to abuse lawful procedures for unlawful gain."7
According to the testimony of D. Lowell Jensen, Deputy Attorney General, U.S. Department
of Justice: "the concept of the categorization [of white-collar crime] was new [when Sutherland
introduced it], but the offenses were not. . . . Such crime is an insidious form of criminality, it is
so serious and pervasive a threat to the Nation's well-being that it requires a high degree of
attention a t the Federal level." U.S. Congress. Senate. Committee on the Judiciary. White
Collar Crime. Hearings, 99th Cong. 2d. sess., Feb 27, 1986. Washington, U.S. Govt. Print. Off.
1987. p. 25-26.
Some criminologists and sociologists have suggested more specific terms, such as corporate
crime, occupational crime, "crime in the suites" (as opposed to "crime in the streets"), and elite
deviance. Within the FBI, units concerned with white collar crime are often called fraud sections.
Coleman, James William. The Criminal Elite. New York, St. Martin's Press, 1989. pp. 2-4;
Green, Gary S. Occupational Crime. Chicago, Nelson-Hall, 1990. pp. 8-10.
U.S. Department of Justice. Federal Bureau of Investigation. White-CollarCrime:A Report
to the Public. Message from William S. Sessions, Director of the FBI. Washington, D.C. 1989.
U.S. Department of Justice. Bureau of Justice Statistics. Report to the Nation on Crime and
Justice. 2nd ed. March 1988, NCJ-105506. Washington, 1988. p. 9.
DISTINGUISHING WHITE-COLLAR CRIME FROM STREET CRIME
Traditionally, criminologists have argued that white-collar crime affects
more people than street crime, that it ultimately surpasses street crime in its
cost to victims and society, and that it relies more on deceit and concealment
than the use of force and violence found with street crime.'
Certainly, the first two assertions have continued to find general
acceptance. In fact, the editor of the Corporate Crime Reporter has argued:
. . . most criminologists who have studied the area conclude
that all corporate crime and violence combined costs society
far more than all street crime combined. The FBI reports,
for example, that the total loss from street robbery in the
United States in 1989 was $405 million. But one price fixing
conspiracy earlier this year by a number of oil companies
cost the nation's consumers $432 million. And there are
many price-fixing conspiracies every year.
On the other hand, the third distinction may not be any longer valid.
Increasingly, criminologists tend to portray white-collar crime as much more
violent and life threatening than heretofore described. For example, the refusal
of one major manufacturer of radial tires to recall a defective product led a
House Committee to state that these tires "had caused thousands of accidents,
hundreds of injuries, and thirty-four known fatalities." In another case, a major
drug manufacturer pleaded guilty in 1985 to failure to report perhaps 11,000
deaths associated with one of its products. lo
Also, Travis Hirschi and Michael Gottfredson, both on the faculty a t the
University of Arizona, maintained that "the distinction between crime in the
street and crime in the suite is a n offense rather than a n offender distinction,
[such] that offenders in both cases are likely to share similar characteristics." l 1
Using the FBI's Uniform Crime Report statistics for fraud and embezzlement,
they found that white-collar criminals are no different demographically (age,
race, and 'sex) than street criminals. Thus, they see white-collar crimes as
Bequai, August. White-Collar Crime: A 20th-Century Crisis. Lexington, Massachusetts, D.C.
Heath and Company, 1978. p. 3.
Washington Post. Letter to the Editor. November 18, 1991. p. A20.
lo Pepinsky, Hal and Paul Jesilow. Myths That Cause Crime. Washington, D.C., Seven Locks
Press, 1992. p. 54; Simon, David R. and D. Stanley Eitzen. Elite Deviance, 4th ed. Boston, Allyn
and Bacon, 1993. pp. 124-26. The editor of the Covorate Crime Reporter stated that: "Thousands
of Americans die on the job every year. Increasingly, employers are being prosecuted by State and
local officials for occupational homicide or manslaughter." Washington Post, November 18, 1991.
Hirschi, Travis and Michael Gottfredson. Causes of White-Collar Crime. Criminology, vol.
25, November 1987. pp.970-71.
events that take place in a business setting, but not necessarily related to the
characteristics of those employed in those settings. l2
Although criminologists continue to debate the validity or accuracy of
distinguishing white-collar crime from street crime, law enforcement officials
have established and maintained separate units to investigate and prosecute the
former. For example, the FBI has established the White-collar Crime Program
and many States have Economic Crime Units (ECUs). l3
Statistics on the costs and extent of white-collar crime lack uniformity.
Costs include financial loss, injury to health (including death), and a decline in
public confidence in social institutions. Data highlighting the extent of the
problem include statistics on arrests, convictions, and financial penalties.
Overall costs of white-collar crime are difficult to obtain and interpret. A
national Chamber of Commerce study in 1974 placed the total a t $40 billion a
year, and another study by Peat, Marwick, & Mitchell in 1982 suggested a
minimum of $200 billion a year.14 More recent estimates of the cost of selected
white-collar crimes to the Nation include:
telephone fraud: up to $15 billion;16
tax fraud by legitimate businesses: up to $50 billion per year
in IRS losses;16
l2 Ibid., p. 961-68. David Weisburd and others have found that a substantial proportion of
white collar criminals had prior criminal records, contrary to the stereotype that they tend to be
one-time offenders. These authors join Hirschi and Gottfredson in questioning the validity of
distinguishing white collar criminals and street offenders. See, Weisburd, David, Ellen F. Chayet
and Elin J. Waring. White-Collar Crime and Criminal Careers: Some Preliminary Findings.
Crime and Delinquency, vol. 36, July 1990. pp. 343-47, 352. Hereafter cited as Weisburd, WhiteCollar Crime.
l3 White-Collar Crime: A Report to the Public, p. 3. William G. Bailey, ed. The Encyclopedia
of Police Science. New York, Garland Publishing, 1989. p. 669-70.
l4 U.S. Congress. Senate. Committee on the Judiciary. White Collar Crime. Hearings, 99th
Cong., 2d Seas. February 27, 1986. Washington, U.S. Govt. Print. Off., 1987. p. 23. Hereafter
referred to as Senate Judiciary, White Collar Crime.
l6 Credit Card Industry, National Consumers League Set Up Hotline to Combat Phone Fraud.
Covomte Crime Reporter, v. 6, January 27, 1992. p. 7.
l6 U.S. Department of Justice. Bureau of Justice Statistics. Drugs, Crime, and the Justice
System: A National Report. December 1992, NCJ-133652. Washington, Gov. Print. Off., 1992.
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seems likely that illegal activities of some kind are involved in many
of these deaths. 23
Also, Coleman reports that the National Product Safety Commission
estimates 30,000 deaths and 20 million serious injuries due to unsafe consumer
products. He acknowledges that the number of these deaths and injuries due
to violation of safety laws or fraudulent claims by manufacturers is unknown,
but he contends that illegal activities caused the majority of them. 24
Finally, Coleman identifies illegal environmental pollution as white-collar
crime for which the estimation of human costs is particularly difficult. He
maintains that many environmental hazards are due to legal and illegal
contamination of the environment. Legal contaminants, he argues, may be
released because of insufficient governmental regulati~n.~' In addition, a
study by the Environmental Protection Agency in May 1993 provided statistics
showing that environmentally toxic chemicals had been disposed in
predominantly minority areas in Louisiana. The Clinton Administration has
agreed to investigate these practices as a violation of the civil rights of the
Criminologists and sociologists also note that white-collar crime has
secondary costs that ultimately may be more significant than financial costs, but
are virtually unquantifiable:
(a) diminished faith in a free economy and in business leaders, (b) loss
of confidence in political institutions, processes, and leaders, and (c)
erosion of public morality.27
They maintain that failure to prosecute white-collar criminals may lead not only
to a loss in public confidence, but also a decline in the willingness of many to
respect legal and social rules.
Extent of the Problem
Criminologists have found it as difficult to compile data showing the extent
of white-collar crime nationally as it is to show the costs of such crime. For
Coleman, James William. The Criminal Elite. New York, 1985. pp. 7-8.
24 bid., p. 8. According to a Coalition for Consumer Health and Safety report released in
1990, "consumer products have been linked to the deaths of more than 600,000 Americans each
year and the injuries and illnesses of tens of millions of others. . . ."Consumer Products Implicated
in More Than 600,000 Deaths Annually. Corporate Crime Reporter, v. 4, July 16, 1990. p. 1.
Coleman, Criminal Elite, p. 8.
26 Cushman, John H., J r . U.S. to Weigh Blacks' Complaints About Pollution. New York
Times, November 19, 1993. p. A16.
27 Moore, Elizabeth and Michael Mills. The Neglected Victims and Unexarnined Costs of
White-Collar Crime. Crime and Delinquency, v. 36, July 1990. p. 414.
example, although law enforcement officials prosecute a growing number of
white-collar crimes, they maintain that many such crimes leave few witnesses
and demand highly specialized expertise to discover. As a result, such crime is
likely to go undetected and uncounted.
Many criminologists assert that available statistics may underestimate the
extent of the problem. First, regulatory agencies and various Federal Offices of
Inspector General (OIGs) must work with the Department of Justice in
prosecuting alleged white-collar criminal violations. These agencies or OIGs
may resolve the matter before it is turned over to prosecutors for criminal
indictment, or prosecutors may decide to use civil actions instead of bringing
criminal charges. D. Lowell Jensen, former Deputy Attorney General, stated in
A related consideration, one that also tends to be overlooked in
discussions of white-collar crime, is the general availability of noncriminal enforcement methods instead of the criminal justice process.
Many white-collar cases arise out of activities subject to Federal
regulation and consequently, to regulatory sanctions. Most such
conduct is also subject to civil sanctions, such as damage awards, civil
fines or penalties, or injunction^.^^
Such dispositions would not appear in crime statistics enumerating white-collar
Second, the FBI's Uniform Crime Reports do not provide complete statistics
on white-collar crime, nor does it have a separate category containing all such
offenses. For example, the category of "ecology law violations" is placed with
other selected offenses under the general heading of "All Other Offenses,
Category B (Crimes Against Persons, Property, and Society)." 29 Third, some
criminologists assert that the nature of white-collar offenses, often of longer
duration and affecting a greater number of victims, may lead to an
underreporting bias.30 The arrest of a real estate agent who perpetrates a land
fraud scheme over a period of many years may not be comparable to the arrest
of a street criminal charged with a single violent crime.
Though comprehensive statistics on white-collar offenses are not available
from the UCR, the FBI collects and publishes data for three subcategories:
fraud, embezzlement, and forgerylcounterfeiting. Total arrests for fraud
increased from 221,685 in 1983 to 276,521 in 1992, a 24.7 percent change.
Likewise, embezzlement arrests rose from 6,932 in 1983 to 10,522 in 1992, a
Senate Judiciary, White Collar Crime, p. 29.
29 U.S. Department of Justice. Federal Bureau of Investigation. Uniform Crime Reporting:
National Incident-BasedReporting System. Volume 1: Data Collection Guidelines. Washington,
July 1, 1988, pp. 39, 47.
Weisburd, White-Collar Crime, p. 349.
51.8 percent change. Forgeries and counterfeiting arrests grew from 64,817 in
1983 to 80,083 in 1992, a 23.6 percent change.31
The white-collar crime unit of the Department of Justice's Criminal
Division includes Public Integrity and Fraud sections. Public Integrity cases
opened, for which DOJ had lead prosecution responsibility, rose from 29 in 1991
to 48 in 1992. Convictions for Public Integrity cases litigated increased from 32
in 1991 to 56 in 1992. Fraud cases opened, for which DOJ had lead prosecution
responsibility, grew from 52 in 1991 to 94 in 1992. Convictions in Fraud cases
litigated rose from 72 in 1991 to 100 in 1992. Court ordered fines, restitution,
forfeitures, and settlements in these cases totalled $933 million in 1992,up from
$228 million in 1991.32
The range of offenses that may be categorized as white-collar crime is
It includes crime against consumers, businesses, financial
institutions, and the government. Recent Federal legislation continues to focus
on traditional crime in these areas, as well as newer categories of white-collar
offenses, including telemarketing swindles and computer fraud.
The 102nd Congress reached conference agreement on an omnibus anticrime package, the Violent Crime Control and Law Enforcement Act of 1991
(H.R. 3371), that failed to pass in the Senate. This bill would have enacted
several new provisions related to white-collar offenses, including consumer
protection, financial institution fraud and savings and loan prosecution, and
In Title 22 of H.R. 3371, consumer protection provisions would have added
new penalties for white-collar offenses in the insurance business and for credit
card and mail fraud. For example, penalized activities in the insurance business
would have included false statements to State insurance regulators,
embezzlement by insurance company officers or employees, fraudulent record
keeping entries by anyone in the business, and obstruction of justice with
respect to insurance regulation. Also, the Attorney General would have been
empowered to impose a civil penalty for such violations. In addition, the bill
called for new provisions against trafficking in stolen credit cards, and the
fraudulent use of credit cards and would have expanded the existing mail fraud
provision to include private mail or commercial interstate carriers.
31 U.S. Department of Justice. Federal Bureau of Investigation. Crime in the United States
1992: Uniform Crime Reports. Washington, D.C. October 3, 1993. p. 221. These statistics were
obtained from 8,054 reporting agencies and do not include those agencies not reporting to UCR.
32 U.S. Congress. House. Committee on Appropriations. Subcommittee on the Departments
of Commerce, Justice, and State, the Judiciary, and Related Agencies. Hearings on the
Departments of Commerce, Justice, and State, the Judiciary, and Related Agencies Appropriations
for 1994, 103d Cong., 1st Sess., Washington, U.S. Govt. Print. Off., 1993, pp. 547-60.
In Title 23 of the bill, financial institution fraud provisions would have
included new restrictions on employment of certain white-collar offenders by
federally insured banks and credit unions, with additional penalties for violation
of this restriction. Title 24 contained language urging the Attorney General to
establish a task force for the aggressive prosecution of criminal cases involving
savings and loan institutions. Computer crime provisions (Title 27) provided
penalties for knowingly or recklessly using a computer transmission to cause
damage or loss of access to a computer used in interstate commerce.
During the first session of the 103rd Congress, several anti-crime bills have
been introduced in both the Senate and the House. The Violent Crime Control
and Enforcement Act of 1993 (H.R. 3355, formerly S. 1607), passed by the
Senate on November 19, contains a number of white-collar crime provisions. It
includes the same provisions found in H.R. 3371 of the 102nd Congress:
consumer protection (Title 21), financial institution fraud and savings and loan
prosecution (Titles 22 and 23), and computer crime (Title 26); and the same
provisions related to public corruption (Title 44) found in S. 1356 and H.R. 2872
of the 103rd Congress.
In addition, H.R. 3355 as passed by the Senate, amends statutes related to
white-collar crime to provide for improved enforcement against those who
obstruct a Federal auditor or engage in a continuing financial crime enterprise
(Title 29); creates a new Federal health care fraud offense for any scheme to
defraud a health care plan (Title 38); establishes penalties for violations of
various Federal fraud laws when they involve telemarketing swindles, especially
those victimizing people over 55 years of age (Title 39); and establishes
bankruptcy fraud as a new Federal offense (Title 51).
Several anti-crime bills including white-collar crime provisions have been
introduced in the House as well. The Violent Crime Control and Law
Enforcement Act of 1993 (H.R. 3131) contains several provisions related to
white-collar crime, including consumer protection, financial institutions fraud,
and computer crime. The Crime Control Act of 1993 (H.R. 2872) penalizes
several activities involving public corruption, such as those in which the mails
or facilities in interstate commerce are used, or a bribe is offered or accepted by
a Federal or State official, employee or juror in connection with illicit drug
activities. According to press reports, the House leadership has indicated that
anti-crime legislation, probably including such provisions, is likely to be passed
during the second session of the 103rd C ~ n g r e s s . ~ ~
33 Cooper, Kenneth J. and Merida, Kevin. House Democrats Say Fate in Midterm Races is
Tied to Clinton Agenda. Washington Post, January 29, 1994. p. A10; Kondracke, Morton M.
Clinton is Backing Senate Crime Bill, But Will the House? Roll Call, January 31, 1994. p. 6.