at Forbes by Nathan Vardi and Asher Hawkins, 08.27.08
In Pictures: The World's 10 Most Wanted White-Collar Fugitives
Crooks with Deep Pockets
How Upscale Criminals Elude the Law
Berger's case is one example of how difficult it can be for authorities to track down white-collar fugitives. They have advantages that more typical criminals lack, including ties to foreign countries, advanced degrees, and barrels of money that can help secure safe havens. Berger, now 35, was born in London and grew up in Salzburg, Austria. He managed hundreds of millions of dollars out of Park Avenue offices in New York before authorities charged him with misleading investors about his stockpicking prowess. Even as he reported stellar returns to his backers, Berger was hemorrhaging more than $400 million by betting against Internet stocks in the late 1990s. Using his connections and his persuasiveness, Berger was able to avoid legal authorities for years.
Berger is the second high-profile white-collar criminal to be captured in less than a year. Jacob "Kobi" Alexander, the former chief executive of onetime high-flier Comverse Technology (CMVT), was arrested last fall in Namibia. He fled the U.S. after being charged with backdating stock options at Comverse.
Even now it is unclear whether either white-collar fugitive will ever face justice in the U.S. American law-enforcement officials have requested Berger's extradition, but Austria may not comply. Frank Rabino, a criminal defense lawyer who specializes in international issues, says Berger may not be extradited if the crime to which he pleaded guilty is not punishable in Austria or if he is found to be an Austrian citizen (a point that is currently in dispute). Berger also could be prosecuted by Austrian authorities because several of the investors who lost money in his firm are based in that country.
Alexander has successfully pushed back hearings on whether he should be extradited to the U.S., even as his ties to officials in Namibia have come under scrutiny. Alexander has pledged to invest more than $14 million in Namibia, including money for a scholarship fund and a solar housing project.
"Generally [white collar-criminals] are more sophisticated," says Stephen Frye, a Los Angeles-based defense lawyer whose practice specializes in white-collar crime. "If they know what they've been doing is illegal, then, more commonly than your lower-level person, they will have a means and [will] have planned to live abroad."
- 1 Historical background
- 2 Definitional issues
- 3 Relationship to other types of crime
Blue-collar crimeThe types of crime committed are a function of what is available to the potential offender. Thus, those employed in relatively unskilled environments and living in inner-city areas have fewer "situations" to exploit (see Clarke: 1997) than those who work in "situations" where large financial transactions occur and live in areas where there is relative prosperity. Blue-collar crime tends to be more obvious and thus attracts more active police attention (e.g. for crimes such as vandalism or shoplifting, where physical property is involved). In contrast, white-collar employees can incorporate legitimate and criminal behavior, thus making themselves less obvious when committing the crime. Therefore, blue-collar crime will more often use physical force, whereas in the corporate world, the identification of a victim is less obvious and the issue of reporting is complicated by a culture of commercial confidentiality to protect shareholder value. It is estimated that a great deal of white-collar crime is undetected or, if detected, it is not reported.
Corporate crime deals with the company as a whole. The crime benefitting the investors or the individuals who are in high positions in the company or corporation. The relationship white-collar crime has with corporate crime is that they are similar because they both are involved within the business world. Their difference is that white-collar crime benefits the individual involved, and corporate crime benefits the company or the corporation.
State-corporate crimeThe negotiation of agreements between a state and a corporation will be at a relatively senior level on both sides, this is almost exclusively a white-collar "situation" which offers the opportunity for crime. White-collar crime has become a priority of law enforcement, however evidence shows that it continues to be a low priority.When senior levels of a corporation engage in criminal activity using the company this is sometimes called control fraud.
Public a victim of white collar crimeCommon misconception about corporate crime and white collar time is that its effects are mainly financial. However, they can cause harm to the general public, workers and consumers. For example false claims made by pharmaceutical companies about their products or the dumping of toxic wastes. Another good example includes the Hooker Chemical Company dumping toxic waste into the abandoned Love Canal in Niagara Falls and later selling the land after knowing of the problem but choosing not to warn health officials. It was later sold to a private housing developer in the 1950’s and in the 1970’s the families starting experiencing major health problems such as miscarriages and birth defects (O'Grady, 2011)[broken citation].
How workers/employees of a company can be victims of white collar crimeSome ways that employees of a company can become victims of white-collar crime can be that workers are being exposed to the harms and risks of being involved in a crime. Even if the workers are unaware of the crimes his or her corporation is committing, this poses a threat to their job security. Essentially, if a company is charged with a white-collar crime, such a fraud or embezzlement, and loses copious amounts of money forcing the company to declare bankruptcy, the employees are at risk of losing their jobs. Another harm making employees victims of white-collar crime can be when employers are aware of a physical harm that can affect their employees. An example of this danger can be depicted with miners in Newfoundland who were exposed to Radon gas, which the company (and the Canadian government) were aware was a danger to people’s health, yet there was nothing done to protect the employees (O'Grady, 2011)[broken citation].
Occupational CrimeIndividuals who commit crime during the course of their employment roles. The two most common forms are theft and fraud. Examples of occupational thefts are removal by employees of job-related items from the workplace. There are obviously varying degrees of theft ex. from a pencil to furnishings to a car. Most employees do steal and the expense is high. An example of fraud is insider trading. This occurs when an employee uses information not available to the public to gain personal advantage over others in the buying and selling of stock (O'Grady, 2011)[broken citation].
- 4 See also
- 5 Further reading and references
- 6 References