Home Law Enforcement How to Identify a Fraudster: Beware of the White-Collar Criminal, Turned Red-Collar Criminal

How to Identify a Fraudster: Beware of the White-Collar Criminal, Turned Red-Collar Criminal

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By Kim Miller, MSCJ, CFE, faculty member at American Military University

The term “white-collar crime” is derived from the assumption that business executives, wearing white shirts and ties, commit crimes. This term also theoretically distinguishes these types of crimes and criminals from those who commit physical crimes, which are supposedly more likely to be committed by “blue-collar criminals” (Miller, 2014).

The term “red-collar crime” focuses on white-collar criminals who resort to murder in order to avoid being caught. The connation of “red” is derived from the temper of the white-collar criminal (i.e. “seeing red”) and is also associated with the color of blood.

White Collar CrimeWhen investigating cases of fraud, it is important not to be deceived by appearance. Many fraudsters are working professionals, dressed in a suit and tie with fancy wingtip shoes (Miller, 2014).

Why Do People Commit Fraud?
Many times, people are driven to commit fraud because of a perceived need for a bigger house, a newer car, fancier jewelry. Such triggers propel people to commit fraud because he/she wants to have “the best.” After such fraud occurs, it is not unusual for people to resort to murder in order to avoid being caught (Miller, 2014).

White-collar criminals sometimes resort to violence in order to silence the people who detect their fraud. White-collar criminals neutralize and compartmentalize their murderous thoughts to rationalize their behaviors (Perri & Brody, 2011). According to the Occupational Safety and Health Administration (OSHA), homicide is the fourth cause of injury in the workplace in the United States. Professionals have been murdered because they have discovered fraud committed by a fellow employee (Perri & Brody, 2011).

For example, one common rationalization to commit fraud is because the fraudster believes he/she is due that money because the company does not compensate him/her enough. Another example is income tax evasion, where the offender believes he/she pays more than his/her fair share of taxes (Albrecht, et al. 2012). This rationalization is also used when deciding to commit fraud-related homicide to silence the fraud investigator (Perri & Lichtenwald, 2008).

The pressures that define the rational choice theory of committing red-collar crime are:

  • Greed
  • Retaliation
  • A compulsion to prove superiority

The white-collar criminal is often prone to chameleon syndrome: A belief that he/she has the ability to adapt to a given environment. He/she tries to blend in with society, but such grandiosity and impulsiveness often thwarts this from occurring in a positive manner (Perri & Lichenwald, 2008).

Signs of a Fraudster
It is important to denote the suspect’s style. If he/she acts friendly, yet clenches his/her fists, this could be a sign of a person ready to snap. The fraud investigator should look into the person’s past and determine if there is anything that stands out. For example, are there reports of manipulation, either of family members or within an organization? This is often a sign of fraudulent behavior.

Does the person show signs of irresponsibility or a lack of duty to friends or family? If the suspect acts grandiose and has a self-inflated ego, this can also be a warning sign of negative behavior (Perri & Lichenwald, 2008).

The key to detecting the possibility of violence is to be aware that white-collar criminals are capable of committing murder, even though they are not historically and/or categorically viewed as violent offenders.

About the Author: Kim Miller has a bachelor and master degree in criminal justice. She is a Certified Fraud Examiner and a Certified Paralegal, specializing in criminal law. As a Certified Fraud Examiner, Kim provides specific investigative lead information; researches records and uses computerized databases to conduct investigations based on specific requests for information or in response to identifiable events. As a CFE, Kim analyzes all information found, determines and extracts that which is pertinent to the case and evaluates investigative significance of information and determines subsequent trails to follow. Kim is also a criminal justice adjunct online professor and course leader at American Military University. She is also in the process of obtaining a Ph.D. in public safety/criminal justice.

References

Albrecht, S. Albrecht, C., Albrecht, C., Zimbelman, M. (2012). Fraud examination. United States: South Western.

Miller, K. (2014). Capella University.

Perri, F., JD, M.B.A., C.P.A., & Lichtenwald, T. G., PhD. (2008). The arrogant chameleons: Exposing fraud-detection homicide. Forensic Examiner, 17(1), 26-33. Retrieved from search.proquest.com.library.capella.edu/docview

Perri, F. S., & Brody, R. G. (2011). The sallie rohrbach story: Lessons for auditors and fraud examiners. Journal of Financial Crime, 18(1), 93-104.    doi:http://dx.doi.org/10.1108/13590791111098825

 

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