In 1939, the phrase “white-collar crime” was coined by the American sociologist Edwin Sutherland to define illegal acts perpetrated by both individuals and organizations of higher status while exercising a legitimate occupation. In general, white collar crimes are non-violent crimes that are committed primarily in a business or corporate context, where the primary motivation is financial – to obtain or avoid losing money, property or services, to secure personal financial gain or corporate advantage. Such crimes include fraud, money laundering, identity theft, bribery, Ponzi schemes, insider trading and cyber crime, among others. Say no to plagiarism. Get a tailor-made essay on "Why Violent Video Games Shouldn't Be Banned"? Get an Original Essay While nonviolent by nature, white-collar crimes can affect more individuals than traditional street crimes and can result in significant financial and emotional consequences and physical harm for victims. For example, a single scam can wipe out livelihoods and life savings, or it can cost partners or clients huge losses that can lead to the closure of a company and the loss of jobs for its employees. White collar crimes are often committed by people such as company directors, officers, employees, partners and professionals, who in most other circumstances would be considered ideal role models for society. This then raises the question: why would someone with so many options choose to risk everything they have by breaking the law? According to Donald Cressey's anti-fraud triangle, three foundations are needed for fraud to exist, and these three can be used to identify fraud. before they occur or by assisting in the reactive investigation process. A typical scammer will first have an incentive or pressure, usually financial pressure, then take advantage of an opportunity that commonly manifests as a weakness in control. Finally, the fraudster will rationalize their action by using an attitude or mindset that carrying out the act of fraud will solve an immediate problem or need. An opportunity is a situation or combination of situations that opens the door for fraud to occur. For white-collar crimes, the opportunity style focuses on situational factors in the industry, the workers' business environment, and the current state of the organization. A first opportunity presents itself through the culture, norms and expectations of the sector. For example, finance professionals are rewarded for short-term profits, so to maximize their performance-based compensation, some proceed to circumvent existing laws. In the 2017 Wells Fargo scandal, CEO Tim Sloan said they had an incentive plan in their retail banking group that led to inappropriate behavior that led to thousands of employees cheating. The Volkswagen (VW) emissions scandal is a classic example of management's disregard for ethics, which also leads the company to violate safety laws. The second opportunity presents itself through the structure and culture of the company. Increasing company size also increases the likelihood of illegal activity occurring due to gaps and complications in communication and coordination. The ABC typology explains the differences between a bad apple (an individual acting alone), a bad bushel (when there are accomplices and therefore collusion is involved) and a bad harvest (when the leadersof the organization engage in corrupt behavior). Bad harvest syndrome can even afflict an entire industry, as seen recently in the case of the LIBOR (London Interbank Offered Rate) scandal which tarnished the reputations of many large banks such as Barclays, Union Bank of Switzerland and Royal Bank of Scotland, who have adopted extremely questionable behavior. The materialistic view of business produces a culture in which the desire to obtain greater profits has the potential to drive businessmen to take actions that can be harmful to society. The arrogance of success can create and promote a culture of tolerance for breaking the law. In 2015, Hans-Dieter Potsch, chairman of Volkswagen's supervisory board, admitted that their tolerance of rule breaking led to the Volkswagen scandal. Opportunity creates an environment in which deterrence theory, rational choice theory, and general strain theory can run their course as motivation. These theories deal with deciding whether a crime will be committed depending on the situation that presents itself. The general theory of deterrence is more concerned with the prevention of the illegal act and focuses more on what happens when the decision maker believes that the risk is greater than the potential reward. While this may be more of a demotivational theory, it still falls under the motivational aspect of the fraud triangle. Deterrence of white-collar crime comes primarily from prison time, but can also include public humiliation, loss of respect, and the collapse of an entire organization, as in the case of ImClone. Rational choice theory emphasizes more the motivations that convince the decision maker to commit the crime. Crimes committed by organized crime are intentional in nature and illustrate rational choice factors such as calculating costs versus benefits. Rational choice theory makes committing a crime a decision about the utility of the circumstances. In the general theory of strain, it explains how individuals who are unable to achieve their economic goals through legal channels experience strain and may attempt to use deviant means to get what they want. reach. Some strains or stressors relevant to the explanation of white-collar crime include blocking economic goals, exposure to a variety of other economic problems, inability to achieve monetary and status goals, and other work stressors . Whether these result in white-collar crime is also influenced by other factors such as the individual's skills and resources, social support, social control, opportunities to commit the crime, and the perceived costs and benefits of white-collar crime. white collars. Economic strain can be at both an individualistic and corporate level, where crimes are committed solely for personal gain. The final stage of the fraud triangle is rationalization, which is also related to justification of the act. Justifications can come in many different forms before and after the commission of the crime. When individuals commit crimes, there is cognitive dissonance between moral standards and bad behavior. To bridge this gap, many white-collar offenders use different types of justifications that may occur prior to the act, as discussed in rational choice theory, or may be retroactive, as explained in Sykes and Matza's neutralization and drift theory, which states that white-collar criminals use techniques.