This is how white-collar criminals sleep at night, according to a professor

Professor Clinton Free at the University of Sydney’s Business School has spent years as a criminal scholar, researching the nature of white-collar crimes. With over 40 published articles, Free is considered an expert of what business crime scholars call the “fraud triangle,” which encompasses the motives of these white-collar criminals. And to some degree, he’s discovered why they feel no remorse for the crimes they commit.

Freeman sites that there are many theories as to why these criminals may feel no sympathy for what they’ve done, such as “moral disengagement,” an inability to relate to ethical concerns, “cognitive dissonance,” which is the psychological concept of thoughts and attitudes contrasting with behavior, and “neutralization theory,” which can also be referred to as justification. But the main theory as to why these criminals feel no repentance is the “fraud triangle,” a grouping of three behaviors.

Greed

The first and most obvious reason that a white-collar criminal might be motivated to not only commit their crimes but see no problem in doing so is greed. In 2018, The Guardian reported that the National Australian Bank charged fees to dead pensioned customers whose accounts were still active posthumously. This also occurred in the Commonwealth Bank of Australia, which continued to charge customers fees after they died.

However, Free argues that determining greed can be difficult, and often subjective. “Because most cases of fraud ultimately result in the perpetrator garnering money,” he says in his 2016 study in the Behavioral Research in Accounting Journal, “observers often conclude that the perpetrator is greedy.” However, often because of an over-inflated sense of ethics from the observers, “many people suffer from an ‘‘extrinsic incentives bias’’ in which they over-emphasize the role of external incentives, such as money, in motivating others.”

Need

Sometimes, white-collar criminals might engage in embezzlement or bribery because they tell themselves that they needed the money – this is the second portion of the fraud triangle.

The need might extend from their own families to themselves in the form of pathology. “Gambling was a feature of offending in one-fifth of our Australian sample,” Freeman also says, in around “30% of all white-collar crime cases.”­­ In around 20% of interviewees claimed that gambling was a “significant cause” of their crimes, and the other 10% claim that it was just one “motivator.”

In Australia, gambling is legalized, but only includes certain products, such as casinos, race tracks, sports betting and lotteries. Australians gamble by far more than any other country on earth according to the data – 80% of Australians gamble and 92% of those are men. And in 2014, it was reported that Australians “gambled over $916 per person” for a point of comparison, Americans gamble $504 per capita, despite housing Las Vegas, the gambling capital of the world.

Rationalization

This is Free’s most well-researched portion of the fraud triangle, one he feels has been neglected by past inquiry. Rationalization can range from everything “such as arguing that they are helping the company” or “that others in the organization do the same things,” and Free has found that offenders themselves often use rationalization as their main resource for avoiding culpability.

Free breaks rationalization down into four different segments: entitlement, victimization, downplaying the effects, and reversibility. These rationalizations can occur at the same time or can change over the course of a criminal’s detainment.

First off, a criminal’s sense of entitlement will cause them to feel no shame about their crimes. Entitlement can come in a number of forms, and interviewees often claimed they felt underpaid, mistreated, or discarded. White-collar criminals tend to “recharacterize their fraudulent act as fair” when they feel slighted, and as a result, feel no remorse. Free says that unfairly low wages can result in employees perpetrating property theft, and general mistreatment is more likely to foster asset theft.

Often criminals often think of themselves as victims as well and attempt to rationalize their behavior by claiming that they were in fact wronged by the employer. This ties back to feeling mistreated, when an employee feels victimized, it can end up in entitlement, which all feeds into the rationalization.

It was also found that white-collar criminals would rationalize their behavior by “diminishing the impact of their offending on victims,” downplaying the effects of their crimes. Often, they would use “selective inattention,” the notion of only paying attention to certain aspects of a situation to suit your pre-existing ideas about it, and “subjective distortion of the consequences of their conduct.”

Finally, white-collar criminals claim that their crimes may not be that bad, because they’re not only temporary but reversible. This was more common for criminals with more altruistic reasons, like sick family or friends who needed care, or those who needed to pay back gambling debts.

They feel less remorse in these cases because their justification is that though the institution can recover, whereas they end up suffering the emotional or psychological strain of their crumbling personal lives.