Professor of Taxation
Te Herenga Waka Victoria University of Wellington
The undesirability of treating different “types” of people differently in the justice system is well-established. Notwithstanding this statement, research typically concurs that white-collar offenders receive preferential treatment for comparable crimes, when contrasted with blue-collar offenders.
White-collar offenders can be differentiated from other types of crime. Typically, white-collar crime is not committed by those who are from a socially deprived background; these crimes often involve a breach of trust; some rectification may be possible with financial reimbursement; and the harm may be wide-reaching. Research has established that white-collar crime often has a degree of complexity and is likely to take place over a longer time period than blue-collar crime. White-collar crimes are more likely to be structured in nature and committed by educated persons, when compared to other offences and offenders. The typical profile of a white-collar offender is older, male and European (white).
I recently wrote an article highlighting how serious financial fraud in New Zealand (NZ) was privileged (White-Collar Crime: The privileging of serious financial fraud in New Zealand, (2020) 29(4) S&LS 486). Using data from 33 cases prosecuted by the Serious Fraud Office over the five-year period from 2014-2018, I highlighted several factors that were likely to result in penalty reductions for white-collar criminals but were unlikely to result in similar penalty reductions for blue-collar criminals.
The first is restitution. In NZ, restitution is treated as a mitigating factor. Where reparation was provided, it resulted in a sentence discount. There is an element of “buying justice” in this situation. Those without the means to make reparation cannot benefit from this same penalty reduction. For many cases of serious financial crime, repaying funds stolen will return the offender to the same or a similar position as prior to the offending. Wealthier offenders who have greater resources will suffer less from making restitution and yet receive a penalty reduction for doing so. In addition, allowing a significant sentence discount where restitution is made ignores the non-financial harm suffered by vulnerable victims of many white-collar crimes. In 67% of the cases I investigated, the victims were referred to as vulnerable or having other characteristics that reflected poorly on the offender, e.g. embezzling the life savings of elderly people. I propose that instead of treating the presence of reparation as a mitigating factor, that the absence of restitution is treated as an aggravating factor.
The second factor is having a “good character”. A sentence discount is frequently provided for “good character” in New Zealand. All of the cases examined in this study referred to the good character of the offender, and a sentence discount was given to all except two of the offenders for this feature. Providing a penalty reduction for a previous good character suggests an ability to trade-off historic good deeds for current bad ones. In many cases the good character is a facilitator of the harm generated from the offending. It is anomalous that an offender should benefit from a sentence discount for a factor that enabled the offending. In the cases examined in this study, 80% involved a breach of trust and 93% were described as involving systematic offending. This shows the predatory nature of serious financial fraud.
Blue-collar offenders are unlikely to be given the same penalty reduction for having a good character, as this benefit stems from privilege and connection. I propose that instead of presenting a good character as a mitigating factor, it should be viewed as an aggravating factor where it is exploited to enable criminal behaviour.
Third, in NZ extra-curial punishments, such as reputation damage, shame or loss of future employment are considered in determining sentences. Prior studies have shown that these impacts are shorter for white-collar offenders than their blue-collar counterparts. Importantly, blue-collar offenders are not typically given consideration for their reputation damage or loss of future opportunities resulting from their offending. Therefore, from an equality perspective, there is little to justify a reduction in penalty for these factors for white-collar offenders; instead, they are best viewed as a natural corollary of the offending, in the same way they are for blue-collar workers.
Finally, the presence of remorse is a mitigating factor. Two-thirds of the cases I examined referred to the presence of remorse. However, it has long been observed that the presence of remorse is subjective and that to show remorse would be the minimum expected from any offender. In some of the cases where a sentence discount was given for an offender showing remorse, the offender pleaded not guilty, suggesting the remorse was somewhat less than genuine. For those who are familiar with the legal system, it is a rational exercise to express remorse: it costs nothing and is likely to provide benefit in the form of a reduced penalty. Again, I would argue that the absence of remorse should be treated as an aggravating factor, rather than the presence of remorse as a mitigating factor.
White-collar offenders should not receive more lenient treatment in the justice system, due to the privileged position of the offender and because this privileged position frequently facilitates the offending. There may even be an argument that offending by those who are among the most privileged in society is more serious than offending by those who are least privileged. However, at a minimum, people should be treated with equivalence: where equivalent harms result from a crime, then equivalent punishments should be the expected consequence.
Lisa Marriott, White-Collar Crime: The privileging of serious financial fraud in New Zealand, (2020) 29(4) S&LS 486
About the author
Lisa Marriott is Professor of Taxation and Associate Dean (Research) at the Wellington School of Business and Government, Te Herenga Waka Victoria University of Wellington, New Zealand. While Lisa’s primary discipline is taxation, she has an interest in crime, particularly when it pertains to taxation.