White-Collar Crime in the Shadow Economy

Front matter

A \ oaloraver pivot

WHITE-COLLAR CRIME IN THE SHADOW ECONOMY

Lack of Detection, Investigation ie nd Conviction Compared to y

Contents

White-Collar Crime Research Theory of Crime Convenience Tip of the Crime Iceberg

Expert Elicitation for Estimation Research Challenges

Student Elicitation for Estimation Social Security Fraud vii viii © CONTENTS

Index

LIST OF FIGURES

Fraction of white-collar criminals that are brought to justice Estimation of white-collar crime based on seven approaches Tip of the iceberg for white-collar crime

Estimation of the magnitude of different forms of financial crime

40 45 46 ix

Table 3.1 Table 4.1 Table 4.2 Table 4.3 Table 4.4 Table 4.5 Table 4.6

Table 6.1

Table 7.1 Table 7.2 Table 7.3 Table 7.4 Table 7.5 Table 7.6 Table 8.1

Table 9.1

Table 10.1 Table 10.2

Table 10.3 Table 10.4

LIST OF TABLES

White-collar crime experts on the elicitation research panel Estimation based on levels of white-collar criminals Estimation based on categories of white-collar crime Estimation based on categories of white-collar crime victims Estimation based on gender of white-collar criminals Estimation based on seven approaches

Lower and upper bounds for the estimate of white-collar crime

Seven different expert estimations of the magnitude of white-collar crime

Estimation based on levels of white-collar criminals Estimation based on categories of white-collar crime Estimation based on categories of white-collar crime victims Estimation based on gender of white-collar criminals Student’s estimation based on five approaches

Distribution of iceberg elements for white-collar crime Comparison of estimates for white-collar crime and social security fraud

Shadow economy as a fraction (%) of GNP (Schneider et al. 2010)

Detection of white-collar crime

Comparison of journalist and non-journalist detected white-collar criminals

Financial crime categories by detection sources Characteristics of stimulus in detection of white-collar crime

33 4] 42 43 44 45

60 68 69 69 70 71 72

93 115

117 127 xi

Introduction

Abstract Our starting point is our database of those who annually are convicted of white-collar crime in Norway. Convicts commit financial crime amounting to 1 billion Norwegian Kroner (NOK) annually—the tip of the iceberg. Our calculations suggest that the iceberg may be more than ten times bigger than what is visible. White-collar crime competes with other kinds of financial crime for police resources. For example, white-collar crime competes with social security fraud for financial crime investigations, the latter receiving a lot more public scrutiny. We make a comparison with previous estimates of social security fraud in Norway. While social security fraud is estimated to cause economic damage totaling 10 billion NOK annually, white-collar crime probably causes total damage of 12 billion NOK.

Keywords Convenience theory ¢ Crime detection ¢ Database e Estimation ¢ Expert elicitation e Norway ¢ Social conflict theory e Social security fraud ° Tip of the iceberg e White-collar crime

The tip of the iceberg is a small, noticeable part of a problem, the total size of which is really much greater. The tip of the iceberg is only the beginning and just a small indication of a larger problem, one that is much bigger than it seems. The tip of the iceberg is a metaphor: Floating icebergs have a significant proportion of their mass below the surface of the water. We believe this is also the case for white-collar crime. The tip of the xiii xiv INTRODUCTION iceberg is the few offenders who are caught, prosecuted, and convicted. The iceberg itself includes the many offenders who are never brought to justice.

This book describes research where we attempt to estimate the iceberg size. We examine, through expert elicitation, what experts who have uncovered some forms of white-collar crime, as well as students, think and believe about the magnitude, causes of, and reactions to, this phenomenon.

The starting point for our research is a known number, namely our database of those who are convicted of white-collar crime annually. Convicts commit financial crime to the tune of well over 1 billion Norwegian Kroner (NOK) ($125,000) annually. One billion is like scratching the surfacing or observing the tip of the iceberg.

Our calculations do indeed suggest that the iceberg may be more than ten times bigger than what is visible in Norwegian courts. When only one out of 12 billion NOK is visible, it may mean that only about one in ten white-collar offenders is sentenced, and that more than 90 percent of the iceberg is below the surface of the symbolic water.

This research is important, as white-collar crime competes with other financial crimes for police resources. For example, white-collar crime competes with social security fraud in financial crime investigations, the latter receiving alot more public scrutiny. We therefore introduce a comparison with previous estimates of social security fraud in Norway, which have also been attained through expert elicitation.

Such a comparison is highly relevant, since both social security fraud and white-collar crime represent serious forms of financial crime causing harm to both organizations and victims in society. While social security fraud is committed by people who basically need financial help from the community to live decent lives, white-collar crime is committed by individuals in the upper-echelons of society who abuse their positions to enrich themselves or organizations they are associated with. Since the two types of cases, in many ways, are two extremes of the spectrum of economic criminals, where one group mainly consists of losers and the other group mainly consists of winners in society, this book explores law enforcement against these two groups by applying social conflict theory. According to social conflict theory, the elite in society have developed laws and regulations that are often not intended for themselves.

The police have limited resources to investigate economic crime and have to prioritize their resources by dropping a large portion of cases

INTRODUCTION xv

(Brooks and Button 2011). The question we ask here is: Should law enforcement primarily dismiss social security fraud cases or white-collar crime cases?

To enable prioritizing between social security fraud versus white-collar crime, criteria have to be applied. Criteria such as social concerns, political positions, ethical dilemmas, and other issues are certainly relevant. The consequences of prioritization can be found at the individual, organizational as well as national levels. In this book, we start by applying an economic criterion: What causes the largest financial loss; social security fraud or white-collar crime?

While social security fraud undermines our trust-based welfare system, it may be that white-collar crime undermines our entire trust-based social system. If the elite in society are abusing their positions for personal or organizational enrichment beyond legal boundaries, then it can create mistrust in most senior managers, whether they are in business, government or politics.

In this book, we show that while social security fraud in 2015 was estimated to cause economic damage totaling 10 billion NOK annually, white-collar crime is probably causing a total annual damage of 12 billion NOK.

This result may come as a surprise to the general public in Norway. When the leading Norwegian financial newspaper, Dagens Neringsliv, published an article some years ago about how law enforcement officials in Norway believe that only one out of four white-collar criminals is caught and brought to justice, the reaction was that this is unacceptable. Now, some years later, our experts believe that only one out of ten white-collar criminals are caught and brought to justice. Although there is some variation in procedure results, the average of 12 billion NOK seems to be a significant empirical result given a variety of approaches and a diverse group of experts.

All such estimates are subject to considerable uncertainty, and both calculations can be challenged and criticized. Subject to this uncertainty, we believe our estimate of 12 billion NOK for white-collar crime is better founded than the estimate of 10 billion NOK for social security fraud. One message from our research is that white-collar crime is just as serious—or even more serious—than social security fraud, and thus should be taken more seriously by police authorities to ensure equality before the law.

The final Chap. 10 in this book is concerned with white-collar crime detection by discussing crime signal detection.

xvi INTRODUCTION

The core of this book is concerned with the tip of the iceberg of white-collar crime (Chap. 3), the expert elicitation for estimating the magnitude of white-collar crime (Chap. 4), research challenges in estimating the unknown (Chap. 5), more research results from the expert elicitation (Chap. 6), student elicitation for estimating the magnitude of white-collar crime (Chap. 7), a comparison between the magnitude of white-collar crime and the magnitude of social security fraud (Chap. 8), and other estimations of the shadow economy in general (Chap. 9).

Chapter 1 introduces white-collar crime research, while Chap. 2 introduces the theory of convenience as an integrated explanation of the white-collar crime phenomenon. For readers who would like to learn more about white-collar crime research and the theory of convenience, we recommend other books by one of the authors: Gottschalk (2015, 2016, 2017a, b, c, 2018a, b, c).

Brooks, G., & Button, M. (2011). The Police and Fraud Investigation and the Case for a Nationalized Solution in the United Kingdom. The Police Journal, 84, 305-319.

Gottschalk, P. (2015). Fraud Examiners in White-Collar Crime Investigations. Boca Raton: CRC Press, Taylor & Francis Publishing.

Gottschalk, P. (2016). Explaining White-Collar Crime: The Concept of Convenience in Financial Crime Investigations. London: Palgrave Pivot, Palgrave Macmillan, Springer Publishing.

Gottschalk, P. (2017a). Understanding White-Collar Crime: A Convenience Perspective. Boca Raton: CRC Press, Taylor and Francis Publishing.

Gottschalk, P. (2017b). CEOs and White-Collar Crime: A Convenience Perspective. London: Palgrave Pivot, Palgrave Macmillan, Springer Publishing.

Gottschalk, P. (2017c). Organizational Opportunity and Deviant Behavior: Convenience in White-Collar Crime. Cheltenham: Edward Elgar Publishing. Gottschalk, P. (2018a). Investigating White-Collar Crime: Evaluation of Fraud

Examinations. New York: Springer Publishing.

Gottschalk, P. (2018b). Fraud Investigation: Case Studies of Crime Signal Detection. London: Routledge Publishing.

Gottschalk, P. (2018c). Whistleblowing: White-Collar Fraud Signal Detection. Cambridge: Cambridge Scholars Publishing.

Chapter 1

Abstract One of the theoretical challenges facing scholars is to develop an accepted definition of white-collar crime. The main characteristic is that it is economic crime committed by a person of respectability and high social status in the course of an occupation. While Edwin Sutherland’s concept of white-collar crime has enlightened sociologists, criminologists, and management researchers, the concept may have confused attorneys, judges and lawmakers. One reason for this confusion is that white-collar crime in Sutherland’s research is both a crime committed by a specific type of person, and it is a specific type of crime. Later research has indicated, as applied in this book, that white-collar crime is no specific type of crime, it is only a crime committed by a specific type of person.

Keywords Convenience theory ¢ Criminology ° Definition ¢ Edwin Sutherland ¢ Gender perspectives ¢ Occupational crime ¢ Offence characteristics ¢ Offender characteristics ¢ Special sensitivity hypothesis e Social status

Ever since Sutherland (1939) coined the term “white-collar crime”, there has been extensive research and debate on what to include and what to exclude from this offense category (e.g., Piquero and Benson 2004; Pontell et al. 2014; Stadler et al. 2013). In accordance with Sutherland’s original work, convenience theory emphasizes the position and trust enjoyed by the

© The Author(s) 2018 1 P. Gottschalk, L. Gunnesdal, White-Collar Crime in the Shadow Economy, https://doi.org/10.1007/978-3-319-75292-1_1 offender in an occupational setting (Shapiro 1987). Therefore, the organizational dimension is the core of convenience theory where the offender has access to resources to commit and conceal financial crime.

The typical profile of a white-collar criminal includes the following attributes (Piquero and Benson 2004; Pontell et al. 2014; Stadler et al. 2013):

e The person has high social status and considerable influence, enjoying respect and trust, and belongs to the elite in society.

e The elite have generally more knowledge, money and prestige, and occupy higher positions than other individuals in the population occupy.

e Privileges and authority held by the elite are often not visible or transparent, but known to everybody.

e Elite members are active in business, public administration, politics, congregations, and many other sectors in society.

e The elite is a minority that behaves as an authority towards others in the majority.

e The person is often wealthy and does not really need the proceeds of crime to live a good life.

e The person is typically well educated and connects to important networks of partners and friends.

e The person exploits his or her position to commit financial crime.

e The person does not look at himself or herself as a criminal, but rather as a community builder who applies personal rules for his or her own behavior.

e The person may be in a position that makes the police reluctant to initiate a crime investigation.

e The person has access to resources that enable involvement of top defense attorneys, and can behave in court in a manner that creates sympathy among the public, partly because the defendant belongs to the upper class, often a similar class to that of the judge, the prosecutor, and the attorney.

However, one of the theoretical challenges facing scholars in this growing field of research is to develop an accepted definition of white-collar crime. While the main characteristic is the foundation—economic crime committed by a person of respectability and high social status in the course of an occupation—other aspects lack precision (Kang and Thosuwanchot 2017).

EDWIN SUTHERLAND

Edwin Sutherland is one of the most cited criminologists in the history of the criminology research field. Sutherland’s work has inspired and motivated a large number of scholars in the field associated with his work. His ideas influence, challenge, and incentivize researchers. Sutherland’s research on white-collar crime is based on his own differential association theory. This learning theory of deviance focuses on how individuals learn to become criminals. Differential association theory assumes that criminal behavior is learned in interaction with other persons.

Sutherland’s (1939, 1949) concept of white-collar crime has been so influential for various reasons. First, there is Sutherland’s engagement with criminology’s neglect of the kinds of crime of the powerful and influential members of the elite in society. Next, is the extent of damage caused by white-collar crime. Sutherland emphasized the disproportionate extent of harm caused by the crime of the wealthy in comparison to the much researched and popular focus on crime by the poor, and the equally disproportionate level of social control responses. Third, there is the focus on organizational offenders, where crime occurs in the course of their occupations. A white-collar criminal is a person who, through the course of his or her occupation, utilizes respectability and high social status to perpetrate an offense. Fourth, the construction of the corporation as an offender indicates that organizations can also be held accountable for misconduct and crime. Finally, there is the ability to theorize the deviant behaviors of elite members. Many researchers have been inspired by Sutherland’s groundbreaking challenge that mainstream criminology neglects the crime of the upper class and has a dominating focus on the crime of the poor. This was a major insight that began a dramatic shift and broadening in the subject matter of criminology that continues today.

Sutherland’s long-lasting influence on criminological, sociological and, more recently, on management thinking is observable across the globe, but in particular in the United States and Europe. Sutherland exposed crime by people who were thought of as almost superior, and who apparently did not need to offend as a means of survival. Businesspeople and professionals frequently commit serious wrongdoing and harm with little fear of facing criminal justice scrutiny. It is often the case that poverty and powerlessness is the cause of one kind of crime while excessive power can be the cause of another kind of crime.

Sutherland exemplified the corporation as an offender in the case of war crime where corporations profit heavily by abusing the state of national emergency during times of war. Corporate form and characteristics as a profit-maximizing entity shape war profiteering. This is organizational crime by powerful organizations that may commit environmental crime, war profiteering, state-corporate crime, and human rights violations.

While Sutherland’s concept of white-collar crime has enlightened sociologists, criminologists, and management researchers, the concept may have confused attorneys, judges, and lawmakers. In most jurisdictions, there is no offense labeled white-collar crime. There are offenses such as corruption, embezzlement, tax evasion, fraud, and insider trading, but no white-collar crime offense. Sutherland’s contribution to the challenge of concepts such as law and crime can be considered one of the strengths of his work as he showed that laws and legal distinctions are politically and socially produced in very specific ways. For lawmakers, there is nothing intrinsic to the character of white-collar offenses that makes them somehow different from other types of offenses.

One reason for this confusion is that white-collar crime in Sutherland’s research is both a crime committed by a specific type of person and a specific type of crime. Later research has indicated, as applied in this book, that white-collar crime is no specific type of crime; it is only a crime committed by a specific type of person. However, white-collar crime may indeed, sometime in the future, emerge as a kind of crime suitable for law enforcement as Sutherland envisaged it in his offender-based approach to crime, focusing on characteristics of the individual offender to determine the categorization of the type of crime.

Sutherland’s broader engagement with criminological and sociological theory in general, such as his theory of differential association and social learning, has been and still is influential. One aspect of the theory of differential association—social disorganization—has had a significant influence on later researchers.

It must be noted that Sutherland’s key constructs and definitions have divided criminology. Nelken (2012) suggests there is ambiguity about the nature of white-collar compared to ordinary crime. Croall (1989: 157) phrased the question “Who is the white-collar criminal?”:

White-collar crime is traditionally associated with high status and respectable offenders: the ‘crimes of the powerful’ and corporate crime. However, examination of one group of white-collar offences reveals that offenders were typically small businesses, employees, and those more properly described as ‘criminal businesses’. While this could be attributed to the ‘immunity’ of the corporate offender from prosecution, it can be argued that such patterns of offending reflect not only enforcement policies but also wider structural and market factors. Thus, analyses of economic and white-collar crime may concentrate overmuch on the corporate offender, and make over simplistic distinctions between ‘corporate’ and other varieties of white-collar offending.

Levi (2002) emphasized a wide socio-economic spectrum of fraud offending when discussing shaming and incapacitating business fraudsters.

OFFENSE CHARACTERISTICS

White-collar crime is illegal acts that violate responsibility or public trust for personal or organizational gain. It is one or a series of acts committed by non-physical means and by concealment to obtain money or property, or to obtain business or personal advantage (Leasure and Zhang 2017).

White-collar crime is a unique area of criminology due to its atypical association with societal influence compared to other types of criminal offenses. White-collar crime is defined in its relationship to status, opportunity, and access. This is the offender-based perspective. In contrast, offense-based approaches to white-collar crime emphasize the actions and nature of the illegal act as the defining agent. In their comparison of the two approaches, Benson and Simpson (2015) discuss how offender-based definitions emphasize societal characteristics such as high social status, power, and respectability of the actor. Because status is not included in the definition of offense-based approaches and status is free to vary independently from the definition in most legislation, an offense-based approach allows measures of status to become external explanatory variables.

Benson and Simpson (2015) approach white-collar crime utilizing the opportunity perspective. They stress the idea that individuals with more opportunities to offend, with access to resources to offend, and that hold organizational positions of power are more likely to commit white-collar crime. Opportunities for crime are shaped and distributed according to the nature of economic and productive activities of various business and government sectors within society.

Benson and Simpson (2015) do not limit their opportunity perspective to activities in organizations. However, they emphasize that opportunities are normally greater in an organizational context. Convenience theory, however, assumes that crime committed in an organizational context be called white-collar crime. This is in line with Sutherland’s (1939, 1949) original work, where he emphasized profession and position as key characteristics of offenders.

White-collar crime research is a growing field with a number of scholars. Green (2007) discussed lying, cheating, and stealing, while Naylor (2003) developed a general theory of profit-driven crime. Some of the accumulated research will be presented in the theory of convenience. Crime-as-choice theory, as suggested by Shover et al. (2012) for white-collar crime, has links to convenience theory.

OFFENDER CHARACTERISTICS

The white-collar offender is a person of respectability and high social status who commits financial crime in the course of his or her occupation (Leasure and Zhang 2017). In the offender-based perspective, white-collar criminals tend to possess many characteristics that are consistent with expectations of high status in society. White-collar offenders display both attained status and ascribed status. Attained status refers to status that is accrued over time and with some degree of effort, such as education and income. Ascribed status refers to status that does not require any specific action or merit, but rather is based on more physically observable characteristics, such as race, age, and gender.

The main offender characteristics remain privilege and upper class. Early perception studies suggest that the public think that white-collar crime is not as serious as other forms of crime. Most people think that street criminals should receive harsher punishments. One explanation for this view is self-interest (Dearden 2017: 311):

Closely tied to rational choice, self-interest suggests that people have views that selfishly affect themselves. Significant scholarly research has been devoted to self-interest-based views. In laboratory conditions, people often favor redistribution taxes when they would benefit from such a tax. This self-interest extends into non-experimental settings as well. For example, smokers often view increasing smoking taxes less favorably than non-smokers do.

In this line of thinking, people may be more concerned about burglary and physical violence that may hurt them. They may be less concerned about white-collar crime that does not affect them directly. Maybe those who are financially concerned about their own economic well-being will be more concerned about white-collar crime (Dearden 2017).

White-collar perpetrators have social power associated with different occupational activities across the society. Power and authority in the hands of individuals enable white-collar crime, with power essentially deriving from the positions individuals legitimately occupy.

GENDER PERSPECTIVES

Research has suggested a relationship between gender and tax compliance, with men being more likely to commit tax offenses than women. Research on tax evasion has both an offender-based perspective and an offense-based perspective. Wealthy individuals have more opportunities to avoid tax compliance and to benefit more from it. In addition, circumventing tax compliance can be organized in a professional setting, where the business enterprise manipulates accounting for the purpose of tax evasion. Status affects the ability of individuals successfully to avoid detection or sanctions for non-compliance, and the opportunity to commit a variety of tax offenses is status based. Tax compliance can be the result of interaction between authority and expectations, where both authority and expectations are based on individual status.

The offense-based approach to defining white-collar crime is also fitting when examining tax offenses. The actions of being non-compliant dictate that the offense itself is considered a crime.

A special kind of tax offense is bank deposits in tax havens. As documented by Andersen et al. (2017: 2), banks help politicians and others transform petroleum rents and other assets into hidden wealth using bank deposits in tax havens:

Political elites abuse public office to extract rents. Even moderate levels of political rents may have socially undesirable effects, through the adverse selection of political candidates and by distorting political incentives. In countries without strong democratic governance, political rents can be substantial and the economic and political consequences severe.

When white-collar offenders are brought to justice, Supernor (2017: 148) found that “a lot more women were given community service than men” because “women are considered homemakers for families, and the court systems do not want to punish a woman in a way that would take her away from her family”.

OCCUPATIONAL AND BUSINESS CRIME

A distinction in white-collar offenses can be made between occupational crime and business crime. Occupational crime is committed by persons in an organizational setting for purely personal gain and to the detriment of the organization. Business crime is committed by or on behalf of the organization for profit or enhancement (Kang and Thosuwanchot 2017). Of course, in business crime organizations cannot commit illegal acts independently of human agents.

Occupational crime is typically committed under conditions of low levels of socialization and weak accountability. Employees may be unfamiliar with organizational goals or simply ignore organizational goals, while at the same time exerting efforts toward personal goals due to weak restraints by the accountability system. The presence of occupational crime may be symptomatic of larger failures in an organization’s system since an organization without committed and accountable employees suggests a higher likelihood of failing in the end. Occupational crime tends to be committed by privileged individuals who feel no attachment to the organization, and who do so purely for personal gain (Kang and Thosuwanchot 2017).

Business crime, on the other hand, is typically committed under conditions of high levels of socialization and strong accountability. Employees not only identify with the organization but also its goals. The pursuit of organizational goals over individual goals does not imply the absence of crime. Rather, achievement of organizational goals becomes so important that if it cannot be done in legal ways, dedicated employees do it in illegal ways (Kang and Thosuwanchot 2017).

Both occupational and business crime is committed within the organizational context. Corporate crime is committed for business advantage and examples include cartels and corruption. Illegal price fixing and market sharing occur in cartels to enable participants in cartels to achieve more profits. Bribes are offered to potential customers, allies, and public officials to enable contracts and licenses (Leasure and Zhang 2017).

CONVICTED WHITE-COLLAR CRIMINALS

It is often argued that convicted white-collar criminals have a hard time in prison. They have to leave all their privileges and opportunities behind to join a community dominated by street crime inmates. This argument is formulated using the special sensitivity hypothesis, which suggests a relatively tougher everyday life for white-collar crime inmates compared to street crime inmates. However, empirical studies of white-collar inmates do not support the special sensitivity hypothesis. Rather, empirical studies support the special resilience hypothesis, which suggests that white-collar offenders are able to adapt to prison life more successfully than other inmates. In this section, we argue that the theory of convenience can provide support for the special resilience hypothesis.

If a white-collar criminal should end up in jail, defense attorneys work hard to make prison life as easy as possible for the client. Attorneys argue that it is much worse for a member of the elite to end up in prison than for other people. After a short while, the white-collar offender typically gets most of his freedom back in an imprisonment setting to avoid too much damage. However, research indicates that it is easier for a white-collar criminal than for a street criminal to spend time in prison. White-collar offenders tend to find new friends more conveniently, and they are able to sleep all night, while most other inmates may have trouble sleeping and making friends in prison (Dhami 2007; Stadler et al. 2013).

Evidence of neutralization by denial of responsibility can be found in autobiographies by white-collar criminals such as Bogen (2008), Eriksen (2010), Fosse and Magnusson (2004), and Kerik (2005). Bernard B. Kerik was the former New York police commissioner who served three years in prison. He seems to deny responsibility, to condemn his condemners, and to suggest normality of action. Evidence of neutralization can also be found in autobiographies by those who were accused of misconduct, but never prosecuted or convicted. An example is ex-Lehmann Chief Financial Officer Erin Callan who presents herself as a victim rather than an offender (Montella 2016).

In this chapter, we argue that there is lack of evidence for the special sensitivity hypothesis for white-collar inmates. The autobiography by Kerik (2005) is used in our case study of lack of evidence. Rather, there is support for the special resilience hypothesis that we discuss in terms of convenience theory in the next chapter.

SPECIAL SENSITIVITY HYPOTHESIS

The idea that white-collar criminals are especially sensitive to imprisonment is based on the premise that they are of higher status than street criminals. They belong to the elite in society, and their fall from grace is much greater, since the higher people fly, the further they fall. White-collar offenders have a greater investment in the prevailing social order and have more to lose. Some argue that a belief is commonly held by those in the criminal justice system that white-collar offenders are ill equipped to adjust to the rigors of prison life. According to the special sensitivity hypothesis, the claim is made that white-collar offenders experience the pains of imprisonment to a greater degree than traditional street offenders.

Upon incarceration, they lose their direct influence and authority over people in business and private life, they lose their direct access to resources that enable them to do almost whatever they like, and they lose their selfidentity characterized by position, trust, and profession. They enter a world that is foreign to them. They leave a hierarchy in society where they held positions at the top, and join a hierarchy in prison where they are far away from the top. Those with physical prowess and criminal connections, such as members of global biker gangs, rule prison life. White-collar offenders discover that they find few of their equals, similar to those they have socialized with for most of their lives. The majority in most prisons is populated by poor and minority group members. In North European prisons, for example, the majority consists of refugees and immigrants who ended up on the wrong side of the law.