White-collar crimes theory includes organizational deviance and overuse of power; however, individual-based violations tend to occur in financial operations. The case of a fraudulent obtain of $2 million from the Paycheck Protection Program loans established to help small businesses survive the COVID-19 pandemic has been analyzed in the research. Based on the theoretical explanation, literature review, and hypotheses statement, the study revealed that the behavioral aspect of offenders’ motivation must be included in investigations. The preventative strategies for fraudulent white-collar crimes have been offered and require action from the legislators and financial surveillance enforcement.
Criminological theory is a considerable segment of any investigation that provides workable tools and influences decision-making for criminologists and police. It is necessary to confirm a violation type before applying the theoretical method, and the white-collar crime has been selected for this assignment. One such example occurred in Little Rock, Arkansas, where a woman fraudulently obtained nearly $2 million in Paycheck Protection Program (PPP) loans established to help small businesses survive the COVID-19 pandemic (UCR, 2020). Ganell Tubbs submitted a PPP application representing the companies with the wrong information to receive the money spent on personal needs instead of the wages and compensation (UCR, 2020). This research aims to identify how the white-collar crime theory could help prevent the case described above.
White-collar crimes include various financial, management, and lobbying speculations, therefore the investigation might be complicated. The theory of such violations addresses the illegal yet non-violent activities frequently committed by individuals and organizations significant for business or governmental industries (Lilly et al., 2019). The dependent variables are the crimes, such as embezzlement, money laundering, corporate or individual frauds, while the independent ones are the perpetrator’s motives and types of businesses where the crime occurred (Lilly et al., 2019). The frameworks of the white-collar crime theory include organizations’ culture, ethics, strains, and deviance among the businessmen.
White-collar crime theory, its application, and limitations continue being studied by the scholars of criminology, sociology, law, and human actions’ sciences. Indeed, Craig explored the situational behavior theory in white-collar crimes and the triggers that influence individuals to commit violations (Craig, 2019). In the article “Extending situational action theory to white-collar crime” published in the Deviant Behavior journal, Craig claimed that “low self-control will only predict offending among those with low morals” (p. 172). The scenario-based research revealed that the theory is applicable for white-collar crimes, yet it is only used for street crime descriptions. The results apply to the COVID-19 pandemic situation, and the supportive measures like PPP, as the appeared opportunity to receive money easily, affect a criminal’s behavior.
Another study narrowed the white-collar crime theories to the individual level for identifying the differences in offending. Severson et al. published the “Explaining white‐collar crime: Individual‐level theories” in 2019. The article committed that rational choice theory, social learning theory (SLT), a general theory of crime, general strain theory, and subcultural theory can be applied to explain white-collar crimes (Severson et al., 2019). In a woman’s fraudulent obtain of the PPP money case, the rational choice theory is applicable, as the calculative approach convinced the offender to commit a crime.
On the contrary, Chan and Gibbs explored integrated theories of White‐Collar and Corporate Crime and published an article about it in 2019. The researchers described the crime as a complex process with multiple causes and consequences. Thus, the theories like the individual-based one might not provide sufficient explanation (Chan & Gibbs, 2019). In their “Integrated theories of white-collar and corporate crime” article, Chan and Gibbs noted that cross‐level integrated theories are prevalent and favor the rational choice and opportunity paradigms (Chan & Gibbs, 2019). The study includes a detailed explanation of the crime type’s dependent and independent variables, thus is suitable for the research.
Pusch and Holtfreter have recently conducted a meta-analysis of individual and organizational predictors of white-collar crime. Their study, “Individual and organizational predictors of white-collar crime: A meta-analysis,” revealed that the independent variables affect personal decisions to commit a crime at the same rate as the broad corporate structures. Pusch and Holtfreter (2021) claim that “deterrence and positive personal traits showed the largest significant bivariate and multivariate effect sizes, respectively” (p. 20). The results can be applied to the analyzed case as the white-collar crime theory tends to emphasize deviant actions based on the organizational culture rather than an individual.
The offense committed by a woman in Little Rock can be studied through the behavioral aspect of the white-collar crime theory. Indeed, the literature review revealed that the individual’s deviant actions are the independent variables and are needed to be revised separately (Severson et al., 2019). The hypothesis to test based on criminal behavior is that for white-collar crime, the rational choice towards instant benefits determines an individual’s course of action.
Moreover, the study of the given crime can be furthered by researching the political and economic aspects of the PPP under which the offender made fraudulent operations. Once the program’s main statements and outcomes are retrieved, the white-collar crime can be explained via the triggers that forced a woman to obtain the money illegally. Consequently, the situational behavior theory might be integrated to study moral and self-control traits (Craig, 2019). The hypothesis based on that study expansion approach is that the defects of economic support programs trigger individuals to take advantage by committing a white-collar crime.
The hypotheses generated based on the given case details and literature review can be tested by collecting information about similar white-collar crimes and conducting statistical analysis for tendencies and distinctions. Besides, the alternate hypotheses may be generated and tested for both aspects to prove if they are right or not (Lilly et al., 2019). As the significant part of the research is theoretical, the appropriate method to study it is secondary data analysis. Making a scope of the previous white-collar crimes based on criminals’ gender, location, type of violation, and personal descriptions would help discover analogies (Lilly et al., 2019). Similarly, conducting experiments with observations or specific changes in the actions’ evaluation would provide sufficient evidence to make conclusions. Consequently, rational choice usage and behavioral triggers can be found with the retrieved tendencies, confirming the hypotheses.
The research and hypothesis testings are useful for changing the social and legislative policies to prevent white-collar crimes such as fraud. Based on the analysis of the theories applied to the violations, their variables and consequences, surveillance enforcement, and the sentences’ rigidity increase may be helpful prevention strategies (Lilly et al., 2019). They are giving the police and tax regulators more rights to check the companies’ financials and force the business owners to report how the supportive money spent is crucial. Moreover, strict punishments would affect the rational choice of the criminals by making fraudulent operations less appealing.
While white-collar crime theory prevalent in studying illegal activities based on organizational culture, the individual approach is crucial. Indeed, the example of stealing $2 million through fraudulent operations by a woman from Little Rocks reveals the importance of addressing the rational choice and behavioral triggers of criminals. The literature review described the predictors of crimes, individual and integrated theories for explaining white-collar offenses. Based on the example of a fraudulent crime, the methodologies to conduct secondary data analysis and experiments were selected. Moreover, the preventative strategies for white-collar crimes are the enforced surveillance for the expenses and stricter punishment policies.
Chan, F., & Gibbs, C. (2019). Integrated theories of white‐collar and corporate crime. The Handbook of White‐Collar Crime, 191-207. Web.
Craig, J. M. (2019). Extending situational action theory to white-collar crime. Deviant Behavior, 40(2), 171-186. Web.
Lilly, J. R., Cullen, F. T., & Ball, R. A. (2019). Criminological theory: Context and consequences, (7th Ed). New York, The United States: Sage Publisher.
Pusch, N., & Holtfreter, K. (2021). Individual and organizational predictors of white-collar crime: A meta-analysis. Journal of White Collar and Corporate Crime, 2(1), 5-23. Web.
Severson, R. E., Kodatt, Z. H., & Burruss, G. W. (2019). Explaining white‐collar crime: Individual-level theories. The Handbook of White‐Collar Crime, 159-174. Web.
The Uniform Crime Reporting Program (UCR). (2020). Little Rock woman pleads guilty to COVID relief fraud. Web.