Saturday, July 16, 2005

How Do You Count White Collar Crimes?

An op-ed in the New York Times by Stacy Horn (here) laments the lack of statistics on white collar crimes, specifically that there's no way to track the number of crimes that occur without looking just at the number of charges filed or persons convicted.  Unlike murders or property crimes, for which there are numerous statistics regarding incidence, location, recidivism, and the likelihood of the crime being solved, there really are none for white collar crime.  Horn argues that there should be a greater emphasis on gathering such statistics to understand the extent (or lack thereof?) of white collar crimes. 

The problem, of course, is that "white collar crime" is not a simply defined offense, and covers a wide range of conduct that may be sanctioned criminally or be subject to civil penalties.  More importantly, it is often difficult to determine whether such a crime has even taken place, so there is no way to track "clearance rates" for white collar crimes.  While it is often easy to determine that a murder or larceny has taken place, is the person walking out of the bank with a check for $100,000 a good customer or a someone who defrauded the bank -- actually, they're often both.  If that person is running out of the bank with a bag full of money and leaps into a waiting car that screeches away, you know a crime has taken place.  For white collar crimes, you can't know it when you see it, unlike pornography (and maybe not even there, too).

Christine Hurt on the Conglomerate Blog has an excellent post (here) dissecting Horn's article, and among the points she makes is the following:

[H]ow does one compile statistics on a crime that we only know is committed if an investigation uncovers it?  This conundrum is similar to attempting to compile statistics on unreported crime.  We know a murder has been committed because we either have a body or a missing person.  How do we know that white collar crime has been committed?  Unfortunately, there are those who point the finger every time the stock price goes down or a financial forecast is not met.  So, do we compile crime statistics by watching the stock ticker?  Should we have corporate coroners who can examine every stock downturn to ensure that the stock is on a "natural" decline?

It sure sounds like a proposal for lawyer and accountant full employment.  (ph)

http://lawprofessors.typepad.com/whitecollarcrime_blog/2005/07/how_do_you_coun.html

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