Adolescent Precursors of White-Collar Crime
Abstract and Keywords
Delinquency in adolescence is a known precursor to adult criminality. Nonetheless, the delinquencies of adolescents are generally considered irrelevant to adult white-collar crime. This chapter reviews reasons for why adolescence might matter to explanations of white-collar offending. It begins by defining white-collar delinquency as an act of fraud committed by a middle- or upper-class adolescent in his or her educational, familial, or workplace setting. Class, age, and gender are significant determinants of white-collar delinquencies. The chapter concludes with several cases of white-collar delinquency and survey data on its incidence.
Adult white-collar criminals developed their techniques of deception early in their lives. They may have learned as adolescents how to achieve their objectives by ignoring the stated rules. As students in school, they may have been rewarded with excellent grades, despite having cheated on an exam or plagiarized a school paper. In their familial settings, they may have experienced the sneaky thrill of conning their parents into believing they were studying at a friend’s house when they were actually partying. When hanging out at the local mall, they may have figured out how to slip that attractive wallet or bracelet into their pocket without having to pay for it. Whether as students, family members, or consumers of all that a good middle-class life has to provide, adolescence is that period of time when the techniques, rationalizations, and definitions in favor of violating legal and administrative rules are most likely to be learned.
There is a structure to adolescence that is both transitional and formative (Steinberg 2002). The transitional reflects the fact that adolescents are on their way to adulthood; they are not yet fully responsible adults. An adolescent’s childlike modern-day dependency is often coupled with desires for status in one social setting after another. Expectations to succeed in each of these settings can be formative, particularly if success is generated through the clever concealment of the truth. The habits of youth can transcend adolescence. Most adolescents know this about their delinquencies. They often are warned or just realize that their offenses in adolescence are no longer worth pursuing.
Although the vast majority of adolescents desist from their offending, we know that a small segment of adolescents become life-course or chronic offenders. A familiar conclusion from the criminological literature is that the best predictor of persistent criminal behavior is the frequency and seriousness of offending in adolescence (Moffitt 1993). As repeatedly documented, chronic adult offenders usually began their criminal careers as adolescent delinquents (Farrington 1994; Farrington et al. 2006). Although the frequent and serious delinquents are the subject of contemporary criminological (p. 218) research (Loeber and Farrington 2012), they are strangely absent from the literature on white-collar crime.
So why has the criminological literature been relatively slow to recognize the importance of adolescence in its explanations of white-collar crime? One reason is that definitions of white-collar crime preclude adolescence. Several definitions draw on Edwin Sutherland’s (1949) conception of white-collar crime as an act committed by adults who are in high-status occupational positions. Adolescents as students or dependent family members are generally of low status. They are assumed to be relatively powerless in avoiding the kinds of punishment that white-collar criminals could potentially face (Sutherland 1949, p. 247). Last but not least are the consequences of adolescent cheating, conning, or lying. In contrast to adult white-collar criminals, the cost of an adolescent lying to his or her parents or cheating on a school exam is directed to the family or the school. This sort of conning is seen as not hurting society. Instead, it is seen as administrative—an infraction that is far removed from the problem of crime.
Yet acts of deception and the abuse of trust also characterize adult white-collar criminality. Although adolescents are not in positions of high occupational status, they may be in the fortunate position of residing in upper-middle-class families. Their parents may have the money, authority, and connections to insulate them from punishment. The harm perpetuated by their offending could be even more significant in producing the justifications for repeated acts of fraud in adulthood.
This essay illustrates how adolescence can be considered a precursor to adult white-collar crime. Edwin Sutherland’s (1949) focus on adult occupational status and adult group associations in the commission of white-collar crime should not be viewed as entirely negating the importance of adolescence (Geis 2010). His theory of learned offending by means of association with others explained adolescent as well as adult crime. A theory of differential association is typically referenced to explain the group context of adolescent delinquency (Warr 2002). But group definitions of a situation relate to social class (Singer 2010). The expectations for success among middle- and upper-class parents produce a set of social definitions that can be quite different from those of less affluent parents. For instance, upper-middle-class parents expect their children to attend a highly ranked college so that the offspring can reproduce their own high-paying careers (Nelson 2010). But there is a leap between the pressure to succeed legitimately and the pressure to succeed by any means necessary. Why some infamous white-collar criminals like Bernard Madoff felt pressure to succeed by any means necessary can only be speculated upon based on anecdotal evidence (Arvedlund 2009).
In section I, the type of offending that is the most comparable to adult white-collar criminality is defined as white-collar delinquency. This term stems from the writings of its proponents (Hagan and Kay 1990; Friedrichs 2007; Pontell and Rosoff 2009). The term has been drawn upon to refer to general and specific types of fraudulent behaviors, such as the illegal copying of copyrighted materials. It has also been drawn (p. 219) upon to refer to sensational kinds of cybercrime by adolescents. Both the more general and specific uses of the term white-collar delinquency have emphasized the affluence of middle-class youths and their capacities to cheat or deceive.
Section II identifies conditions of adolescence that might be conducive to white-collar delinquencies. Adolescence is a time of extended dependency and emerging independence. The route toward status during this transitional period of time is quite difficult for a segment of youth, who generally account for the small proportion of high-offending delinquents. They lack the law-conforming social bonds that would minimize their rate of delinquency. Moreover, the self in adolescence is increasingly emphasized in modern-day society. Today, adolescents have considerable opportunity to be on their own in their suburban developments and on their own computers.
Section III explores how the social class of an adolescent’s parents might influence white-collar delinquency. The middle and upper classes have the luxury of more time and resources to be expended on longer stays in school. There appears to be more of a negotiated order among today’s middle- and upper-class parents. Success is measured by performance and is celebrated through honor-student status or acceptance into a good college.
Section IV considers how white-collar delinquency relates to social status. Good grades might not be good enough. For a segment of youths, the competitive search for status can be a never-ending pursuit. The pressure to succeed for a segment of adolescents might be so great that an A-minus may not satisfy their self-serving desires. In contrast to boys, girls have been observed to be more relational, more nurturing in their pursuits, and less competitive (Hagan and Kay 1990; Steffensmeier, Schwartz, and Roche 2013).
The essay concludes in section V with stories and survey data on white-collar delinquency. The survey data reveal that gender, age, and social class are significant predictors of white-collar delinquencies. The main conclusions are as follows:
• Acts of copying software and other copyrighted materials, cheating in school, and other acts of fraud by affluent youth are acts of white-collar delinquency.
• Class matters in adolescence as well as adulthood. Aspects of middle- and upper-class lifestyles are identified as emphasizing autonomy, self-efficacy, and self-actualization. An emphasis on the self to the exclusion of others places middle-class adolescents at risk of chronic white-collar offending.
• White-collar acts of delinquency are related to gender, age, and social class.
• When adolescents are identified for their white-collar delinquencies, the penalties are generally not severe.
• Minimizing the adolescent precursors to adult white-collar crime requires recognizing the reasons for white-collar delinquency.
• The complex transitional and formative qualities of adolescence should be examined as they relate to white-collar delinquencies.
I. White-Collar Delinquency
Criminological discussion of white-collar acts of delinquency is surprisingly sparse. The term white-collar delinquency is not nearly as popular as the term white-collar crime. Sutherland (1949) was focused on adult white-collar crime, and for that reason he incorporated an age-dependent definition of white-collar criminals. Of course, adolescents are not in a position of high occupational status. Yet the major theories of crime are also the theories of delinquency. The learning of definitions, values, and norms that are conducive to delinquency are the same as those that are conducive to criminality. For this reason, except for factors that are age graded (e.g., marriage), the predictors of offending in adolescence are usually no different than those of crime in adulthood, as numerous cohort studies continue to illustrate (e.g., Loeber and Farrington 2012).
The term white-collar delinquency is both a legal and social construction. It derives from the legal concept of delinquency, which emerged in the early part of the 19th century with the creation of reformatories. The juvenile court at the end of the 19th century completed the process of recognizing that the offenses of the young should be legally distinguished from those of adults. The founders of the juvenile court were less concerned with offense categories. They tended to negate the criminal law’s classification of offenses, preferring to focus on the reasons for an adolescent’s troubling behaviors. But this early tendency to lump all types of adolescent offending together made little practical sense. Offense categories are indicative of the reasons for adolescent offending, and for considering the most appropriate type of response. Generally, the response to an adolescent’s addiction to illicit substances should be different than from occasional acts of petty theft. These offense distinctions are not new; they are part of public knowledge about offenders and have become critical to the delinquency literature. Most recently they have incorporated the notion of white-collar delinquency.
A Google search of white-collar delinquency reveals less than a hundred references, including duplicate entries of the articles produced by Hagan and Kay (1990) and Pontell and Rosoff (2009). The 1990 article by Hagan and Kay appears to be the first use of the words white-collar delinquency. They use it to refer to offenses that involve the illicit copying of software and other copyrighted materials. Friedrichs’s (2007, pp. 203–4) textbook on white-collar crime refers to the Hagan and Kay’s article and notes its significance in relating to delinquency. In the context of delinquency, Friedrichs refers to Gottfredson and Hirschi’s (1990) general theory of criminality and delinquency, which suggests that the determinants of delinquency are no different than that of white-collar crime.
But there would seem to be little need for a separate category of delinquency if the dimensions of offending by adolescents are invariant across offense categories. Although Gottfredson and Hirschi’s (1990) general theory of crime acknowledges offense variation, the perspective tends to see such differences as situational rather than motivational. The reasons for a particular type of offense remain the same; that (p. 221) is, all acts of delinquency and crime are a function of an individual’s capacities to control short-term desires and to avoid offending for a quick and easy gain. Neglected in the case of adult as well as adolescent offending is the fact that white-collar criminality can require considerable forethought, planning, and sophistication in the choice of deceptive practices (Geis 2008). The point here is that not everyone can cheat and get away with it. Those who are able to get away with their offenses as adolescents can be expected to try to get away with their offending as adults.
By referring to a segment of delinquents as white-collar delinquents, all adolescent delinquencies are not to be considered equally. Matza (1964) distinguished between the chronic, committed delinquent and the occasional delinquent based on a theory of adolescence and delinquency. He argued that an adolescent subculture of delinquency exists alongside a delinquent subculture, indicating varying degrees of commitment to law-violating behaviors. Hagan (1991) examined the self-reported delinquency of adolescents and was able to identify a segment of affluent youths who were embedded in a subculture of delinquency that he further identified as a party subculture. These affluent youths were largely from the middle and upper class and were socially bonded with one another through their acts of drinking. Their partying did not impede their adult occupational and educational status. In contrast, the adolescents who became embedded in a delinquent subculture were less able to obtain the kind of adult educational and occupational status of their more affluent peers.
The more specialized vision of delinquency is contained in Pontell and Rosoff’s (2009) use of the term white-collar delinquency. They relate sensational acts of cybercrime leading to costly acts of fraud perpetrated against corporations and individual victims. The capacity to create computer viruses and perform acts of online fraud requires computer skills and forethought as to how best to perpetrate a particular kind of con. The ability to con another requires ingenuity and the capacity to deceive in a way that exhibits a high degree of self-control (Goffman 1990; Friedrichs and Schwartz 2008). White-collar acts of delinquency, like white-collar acts of adult crime, can require technical skills if they are to be committed successfully over a lengthy period of time.
Hagan and Kay’s (1990) definition and discussion of white-collar delinquency refers to a wide array of offenses, including offense types that could be considered as bordering on the trivial, such as an act of copying copyrighted materials. Pontell and Rosoff’s (2009) definition of white-collar delinquency is more restrictive: they confine their analysis to sensational and egregious acts of crime. But they locate these serious acts of crime within the middle class—a class that has the intelligence, computers, and technical skills to produce considerable amounts of financial loss. White-collar delinquency reflects the class of the youth and the seriousness of the offending. This more restrictive use of the term would deny less sensational offenses that affluent youths commit, such as their acts of cheating in school.
The appropriateness of using an inclusive or exclusive definition of white-collar delinquency depends on the research question to be addressed. The more general use of the term is specific to adolescents. According to state law, the offenses of adolescents (p. 222) are acts of delinquency, not acts of crime. The status of delinquent as opposed to criminal varies by age, usually somewhere between sixteen and eighteen. The term is specific not only to adolescence but also to a range of possible infractions, including status-offense behaviors such as truancy and disobeying a parent. For serious acts of crime, there is the criminal court, particularly for older adolescents. Indeed, the acts that Pontell and Rosoff (2009) refer to as serious acts of white-collar crime are committed by older adolescents who may not be eligible for juvenile justice. In contrast, the more inclusionary use of the term white-collar delinquency, as initially conceived by Hagan and Kay (1990), would fit a range of deceitful as well as manipulative behaviors. Moreover, the inclusion of offenses that are more typically committed by middle-class and upper-class youths would fit Sutherland’s classic definition, whereby “the white-collar criminal is defined as a person with high socioeconomic status who violates the laws designed to regulate its occupational activities” (Benson and Simpson 2009, p. 5). Sutherland’s examples would fit the delinquency category more generally because they are violations of regulatory or civil law rather than criminal law. Similarly, the white-collar delinquent facing juvenile court is technically subject to a civil or administrative court rather than a criminal court.
The term white-collar delinquency is grounded in adolescence, as a transitional and formative period of time (Scott and Steinberg 2008). Adolescents are neither dependent children nor independent adults. Their main or only occupation is that of a student. In middle-class households, adolescents are expected to attend college. But upper-middle-class parents are not interested in just any college for their adolescents; they desire a good college that can enable their children to compete for the most desirable occupational pursuits (Nelson 2010).
The transitional period is critical to loosening whatever parental social bonds and social control might have existed in childhood. The teenage years are a critical turning point of tremendous physical, social, and biological change (Steinberg 2002; Coleman 2010). Essentially, many adolescents are lost between their earlier childhood and future adulthood. This is not the case for all adolescents, but it is the case for a significant proportion, who become involved in drugs and other illegal behaviors.
More generally, the adolescent literature refers to a significant amount of risk taking. These are negative risks, such as unprotected sex or experimenting with drugs. The consequences of this sort of risky behavior are often felt early in life. Frequent drug use and risky sexual activity often produce negative consequences, such as poor school performance or unwanted pregnancy. Many adolescents learn by their mistakes. But suppose the risky behavior pays off? Suppose an adolescent who is really good at cheating in school has learned that his ability to con others is enjoyable—a sneaky thrill worth repeating in future endeavors? (p. 223)
Another factor to consider is peer support for delinquency (Warr 2002). Peer-group affiliations act to provide status to adolescents through status-generating groups (Danesi 1994; Milner 2004). They are intended to provide adolescents with the strength in numbers that they lack in their powerless position as adolescents. They revolve not just around one delinquent or non-delinquent group, but through a web of group-identifying affiliations, such as particular styles of dress, music preferences, athletic abilities, or school status. Today there is more of a choice of group affiliations, thanks to the Internet. Along with this choice, peer-group associations should be more individualized.
Contemporary middle-class adolescents have more to choose from among their Facebook friends, Internet sites, and places to hang out. Individual identities as opposed to group identities can facilitate a focus on the self, as in self-esteem, self-actualization, or self-efficacy (Maslow 1970; Taylor 1989; Bandura 1997; Dweck 1999; Jang and Thornberry 1999). Each of these terms has its own meaning and has been advocated by sophisticated theorists of human development. Becoming an adolescent today means recognition of self. According to survey data compiled by Duane Alwin (2004), middle-class parents today are more inclined to encourage their adolescents’ sense of self. In earlier generations, parents were more likely to value obedience over autonomy. For good reason parents expect their children to think for themselves as they compete in their educational and occupational pursuits.
So expectations of individual achievement begin early in adolescence. The shift that Alwin identifies emphasizes an individual self. Undoubtedly, it includes inculcating middle-class values of honesty and the need to achieve by the stated rules. In an educational setting such as a high school, this means honesty in doing homework assignments and taking exams. But there can be a gap between how well adolescents can meet their objectives when playing by the stated rules. Adolescents know that their grade-point average and test scores are important; their parents expect them to perform well so they can attend the right colleges and subsequently attain high occupational status.
III. Social Class
The pressure to succeed by any means necessary may be facilitated by the efforts of middle-class and upper-class parents. They believe that their children are too good to fail on their own. As previously mentioned, Margaret Nelson’s (2010) study of parenting insightfully shows how upper-middle-class parents are especially protective of their children. She relates how the more affluent and more educated parents will go to greater personal lengths to secure their children’s future. She compared parents with graduate degrees with those who had a bachelor’s degree or less and found that graduate-degree parents expressed more protective beliefs about their adolescent and young adult children. Graduate-degree parents expressed greater concern about their children growing up too quickly. They tried to extend the period of time their child would remain in (p. 224) school, often insisting that they attend graduate school. The more professionally oriented parents were not only more involved in their children’s activities; they were also assisting and guiding them in their competitive educational and occupational pursuits.
Middle- and upper-class adolescents are also in a more desirable position to compete for educational and occupational status. They have more of the resources that would enable them to pursue college and secure good jobs. These resources include not only material assets but also the kind of social capital that is known to increase the likelihood of being in a position of authority. The assumption here is that parental authority and power provide the sense of personal entitlement that enables white-collar delinquency. Others have drawn on the term social capital to indicate not only the economics of class but also the cultural capital of class that produces subtle distinctions that can advantage the affluent. For instance, Hagan’s (1989) power-control theory suggests that the authority parents derive from their positions of work is reproduced among their adolescents. Critical to Hagan’s power-control theory is the interplay between class and gender. More specifically, boys raised by parents in employer or management positions should be the most free to be delinquent.
Indeed, Hagan found support for his thesis in a series of articles beginning in 1985. Hagan et al. showed that delinquency rates peaked for adolescents in the employer class, which would be comparable to those in the middle and upper classes (Hagan, Gillis, and Simpson 1985). There is other support for the delinquency of affluent adolescents and their ability to avoid arrest, prosecution, and labeling as delinquents (Cicourel 1968; Chambliss 1973). Observational and ethnographic studies show that class enables middle- and upper-class youths to avoid punishment. Cicourel (1968) observed the formal and informal proceedings of juvenile court decision making in two communities. Officials in the more affluent suburban community felt more compelled to give adolescents another chance. He observed, moreover, that affluent parents would confront officials more about their adolescent’s behavior, and as a consequence they would save their children from being adjudicated as delinquent.
Another example of how affluent youths avoid official delinquent labels is Chambliss’s (1973) study of two groups of adolescents: one middle-class group named the Saints and the lower-class group of youths named the Roughnecks. Chambliss made the point that class matters in predicting an arrest. Although the Saints were engaged in just as much offending as the Roughnecks, they could repeatedly avoid arrest, unlike the Roughnecks. The difference Chambliss attributed to the kind of neighborhood in which the Saints lived and to their types of offenses. In contrast to the Saints, whose offenses were deemed less serious, the Roughnecks’ offenses were viewed by the police as more serious because they more often involved acts of fighting. The police were more inclined to arrest the Roughnecks to prevent further acts of violence. Chambliss further attributed the ability of the Saints to avoid any official arrest to their ability to convince the police that they were remorseful and good kids. The middle- and upper-class Saints knew the art of impression management.
There are other criminological distinctions to note. Serious and frequent delinquency is a phenomenon of disadvantage. The more chronic delinquents are more (p. 225) troubled adolescents (Moffitt 1993). One major disadvantage is familial and neighborhood impoverishment. Sampson (2011) most convincingly stated that neighborhoods and the social capital that endures in advantaged neighborhoods make a difference in controlling crime. The critical elements to social capital are the trust and empathetic identification that neighbors have with one another so they can assist with all sorts of troubles, including reporting on each other’s kids when they are misbehaving. Social capital assumes community and a network of neighbors who know one another and are willing to trust others to come to their assistance unselfishly.
But there are signs that there is less community or a sense that “we are in this world together” among middle- and upper-class families. Shover and Hochstetler (2006) suggested in their analysis of why adults choose to commit white-collar crime that middle-class youths acquire a manner of thinking and acting that reflects their privileged status. They explained that middle- and upper-class youths can become “ready recruits to white-collar crime [and] the ease with which the products of privilege turn to crime suggests there may be qualities and pathologies in their generative worlds” (Shover and Hochstetler 2006, p. 55). But what is it about these worlds? Shover and Hochstetler speculated about the possible influence of living in larger homes where children have their own room. In other words, the affluent have more time to be on their own; they are less likely to have to negotiate densely populated spaces. In contrast, lower-class youths reside in more densely populated settings, often in inner cities where they must take into account the constant presence of others.
Another dimension to Shover and Hochstetler’s analysis is middle- and upper-class competitiveness. Most recently, the competitive stance of affluent parents was noted by Margaret Nelson (2010). As discussed above, parents with graduate degrees not only were highly protective of their children but also instilled a strong competitive orientation, insisting that their children extend their education as long as possible and attend the best possible schools (Nelson 2010). She observed less pressure among the less educated parents in her sample.
Middle- and upper-class parents are also likely to employ the “best” kind of parenting style, as advocated in the parenting literature. The importance of self-esteem is repeatedly advocated, and as it has been popularized so too have the more sophisticated versions been reduced to an ethos that repeatedly emphasizes a sense of self, as in self-efficacy and self-actualization. The authoritative parenting study is the preferred style—the one most recommended by experts in adolescent development (Baumrind 1991). This kind of parenting style places “a high value on the development of autonomy and self-direction” (Steinberg 2002, p. 141). Unlike authoritarian parents, who are dogmatic about the rules, “authoritative parents deal with their child in a rational, issue-oriented manner, frequently engaging in discussion and explanation with their children over matters of discipline” (p. 141). Children raised by parents who practice an authoritative style of parenting tend to perform better than those raised by authoritarian parents (Steinberg et al. 1992; Hay 2001).
There has been little critical analysis of an authoritative style of parenting. An unintended consequence of this type of modern-day parenting is to increase ambiguity (p. 226) about the stated rules (Smelser 1998; Haines and Beaton-Wells 2012), which is located more in middle- and upper-class households. Duane Alwin (2004) found this to be the case and has drawn on the term parental modernity to indicate how autonomy trumps obedience. Based on several generations of survey data, he found that parents increasingly value their adolescents’ ability to think for themselves. This kind of autonomy of self is emphasized over obedience to a group and is located more among the middle and upper class (Popenoe 1988; Alwin 2005).
So a competitive and autonomous self appears more likely to emerge in middle- and upper-class households. Distinguished early 20th-century sociologists like Simmel (1995) identified this sort of competitive streak in a blasé attitude that would develop among what Veblen (1899) referred to as the leisure class. For instance, Baumgartner (1988) found a preference among white-collar/professional-class suburbanites for what she terms moral minimalism. In contrast to blue-collar/working-class families, she found that the more affluent tended to have “an aversion to confrontation and conflict and a preference for spare, even weak strategies of social control.” They tended “to tolerate or do nothing at all about behavior they find disturbing.” Moreover, the more affluent suburbanite neighborhood approached disputes in a “conciliatory fashion” (pp. 10–11). Baumgartner further concluded her analysis by stating that the suburban life of the more affluent revolves around a culture of avoidance. A tolerance for deviance among the middle and upper class when it comes to their own youths makes sense, given that most adolescents mature out of their delinquent behaviors. Yet for a segment of adolescents, there is a risk in ignoring their white-collar acts of delinquency. These acts are rationalized based on the notion that they are trivial and of little consequence.
IV. Status-Generating Desires
Not everyone is equally capable of obtaining recognition in a status-oriented society by following the stated rules. Bending the rules in pursuit of status may be more common today than in premodern times (Thomas 1923). In earlier times, a person’s status was often dictated by birth; it was ascribed based on familial or tribal affiliations. Modern-day societies are meritocracies. They look to promote and assign status based on achievement scores, money earned, or occupational prestige. Adolescents are not in a position to earn vast amounts of money or to take prestigious jobs. Instead, they only have their achievement scores through their school pursuits and money that they might be able to earn through their allowances and part-time work. Today’s teenagers cannot depend on their place of birth alone as an indication of their status; familial connections matter less. Instead, middle-class and upper-class adolescents are expected to perform well in one achievement test after another. Status must be earned and displayed through achieved grades, clothes, fame, and admiration by others.
In a modern-day society, the school is the most important source for legitimating status. Based on their performance on various standardized tests, the school is a place (p. 227) where students are placed in honor tracks and non-honor tracks. One way to confront this need for status is for adolescents to generate their own alternative status-generating groups. Milner (2004) related how status-generating groups provide alternative venues in which adolescents can perceive themselves as cool. Earlier, Cohen (1955) highlighted, in his theory of lower-class delinquent boys, the importance of lower-class status frustration with middle-class values as first confronted in school. While Cohen’s classic analysis dealt primarily with a single lower-class delinquent culture, Milner’s 2004 analysis looked at a variety of adolescent groups across the class culture. Yet Cohen also mentioned middle-class boys who suffer from status frustration by not being able to identify and understand the professional pursuits of their parents. The important point is that adolescents in a modern or postmodern society can draw on more than one culture in pursuit of status.
Although the group context of delinquency is indisputable, the reasons for it are less than clear. Based on research that has distinguished various kinds of delinquent groups, the associations leading to status are different for impoverished and affluent youths. Impoverished inner-city youths tend to associate more in organized gangs; status is derived through their neighborhood turf and ethnic and racial identities. For middle- and upper-class youths, who live largely in affluent suburbs, peer-group associations are loose. They are less attached to their suburban subdivisions, particularly since they are all too willing to relocate as their parents have for educational and occupational pursuits.
Over a half-century ago, David Riesman (1950) described the American middle class as increasingly outer directed. They were less likely to be inner directed in their values and beliefs than those of an earlier era. He argued that middle-class Americans were more conscious of what others think of them—for example, by buying the most popular consumer items. This need for status based on what others think did not disappear in the 21st century. Adolescents have their designer jeans, smartphones, and other must-have consumer items. Whether this is more so the case for youth who are raised in affluent versus impoverished circumstances is an empirical question. What certainly remains the same are the transitional aspects of adolescence and the search for status.
V. Stories and Data on White-Collar Delinquency
A. Adolescence and Bernie Madoff
Implicit in the sensational story of this century’s largest Ponzi scheme is the untold story of white-collar delinquency. In December 2008, 70-year-old Bernard Madoff pleaded guilty in federal criminal court to operating an investment firm that persuaded hundreds of highly intelligent investors to believe that he could be trusted with millions (p. 228) of their dollars (Lewis 2012). That part of Madoff’s story is already well known and confirmed. Madoff had produced fraudulent monthly financial statements over several decades. If not for the financial downturn of 2008, he might have been able to continue his con even longer. His life could have ended without him ever having faced the legal consequences of his acts of fraud.
Less known is Madoff’s biography and when his habit of defrauding people actually began. He was raised in a solidly upwardly mobile middle-class family. He was reported to have lied early on in his adulthood, pretending to have graduated from law school when he actually did not. Clearly, he was a master at deception. Few have the innate skill to fool so many successful and well-educated individuals. Madoff mastered the fine art of impression management (Goffman 1990; Lewis 2012).
It is not possible to know when exactly Madoff started to develop his con-artist skills. In her book Too Good to Be True: The Rise and Fall of Bernie Madoff, Erin Arvedlund (2009) speculated that Madoff might have started his habit of deceiving others in high school. Arvedlund interviewed several of Madoff’s high-school friends and acquaintances. She quoted one of them as stating that he “showed pride of appearance, willingness to deceive, [and] no fear of the eventual consequences when there was a good chance of success.” The same high-school friend stated that Madoff faked a book-report presentation. Madoff might have learned to get away with his misdeeds because “nobody could really get mad at Bernie. He had a put-upon Charlie Brown persona that carried him through” (p. 18). But plenty of adolescents cheat, so Madoff could not be considered unique for his ability to fake a book report. Moreover, there is little that is unique about an adolescent who shows pride in his appearance.
Just as revealing is when Madoff, on the day of his sentencing, gave a reason to the judge and those present for his grand act of fraud. He stated that he could never accept the loss of status that would come from having failed to succeed. He stated:
Although I may not have intended any harm, I did a great deal of harm. I believed when I started this problem, this crime, that it would be something I would be able to work my way out of, but that became impossible. As hard as I tried, the deeper I dug myself into a hole. I made a terrible mistake, but it wasn’t the kind of mistake that I had made time and time again, which is a trading mistake. In my business, when you make a trading error, you’re expected to make a trading error, it’s accepted. My error was much more serious. I made an error of judgment. I refused to accept the fact, could not accept the fact, that for once in my life I failed. I couldn’t admit that failure and that was a tragic mistake.
(New York Times 2009, p. B4, emphasis added)
Many white-collar criminals were sheltered from failure. Otherwise, they could not be in their positions of trust, if they had a record of having been caught and punished for their offenses. Madoff was able to escape detection early. It is not possible to know exactly when he could have been sanctioned to the point that it would have prevented his serious acts of crime. The fact that he had defrauded investors for at least (p. 229) several decades suggests that his fraudulent behavior did not just suddenly happen in adulthood.
B. Adolescent Cheating in New Hampshire
Hanover, New Hampshire, is the home of Dartmouth College, and the town where the sons of upper-middle-class parents were caught stealing and cheating on their final exams. Many of them were graduating honor students on their way to prestigious Ivy League schools. On a weekend night, the students broke into their high-school office, copied the answers, and distributed them to a large cadre of students. The end-of-the-semester exams for this group of juniors and seniors might have determined their ultimate acceptance into many of the same prestigious colleges that their parents had attended. The local town prosecutor wanted to prosecute the older adolescents in criminal court for breaking and entering, but their parents objected, thereby creating a major uproar that received national media attention (Schweitzer 2007).
The parents of the charged youths included professors at Dartmouth College, a journalist, and a hospital president. They claimed that a criminal court charge—even if it did not involve incarceration—was too harsh a penalty. In media reports, the parents of the youths argued that a criminal court conviction might prevent their children from attending the school of their choice. They argued that any penalty should be administered by the school, and there should be confidentiality of the youth’s conviction. This is an example of where persons of high occupational status can avoid prosecution when committing their white-collar crimes. According to one student quoted in a National Public Radio story, “kids know they won’t get in trouble for things like sharing homework or finding out what’s on a test from kids who’ve already taken it … Some teachers don’t classify that as cheating.” One parent commented that “Hanover [High School] is a place where the college you go to is more of a status symbol than the car you drive, and parents put big-time pressure on kids” (Seabrook 2007, transcript).
Hanover is not alone. This past year, the front page of The New York Times was filled with stories of adolescents cheating in elite schools. At Harvard, 125 students were caught cheating on a take-home exam. At an elite public high school in New York City (Stuyvesant High), cheating became systematic, involving a network of youths who would photograph the exams using their phones and then text them to their fellow students who were about to take the same test (Kolker 2012). The New York Times also reported systematic cheating on college aptitude exams among students in an affluent Long Island, New York, school district (Anderson 2011).
C. Survey Data on White-Collar Delinquency
Estimates of cheating in school are the most thoroughly studied indicators of white-collar delinquency. National estimates of cheating vary considerably. Based on their (p. 230) survey data, Davis, Drinan, and Gallant (2009, p. 45) reported that 85 percent of high-school students cheat. This figure includes exam cheating, plagiarism, and copying homework. The percentage of youths cheating on exams is 62 percent, they report. Even more striking, Singer’s (2014) analysis of white-collar delinquency in an affluent suburb of Buffalo, New York, found that 81 percent of youths admitted to having cheated in school or copied copyrighted materials without permission at least once in their lives. However, when the survey questions were limited to within the past year, the incidence of white-collar delinquency decreased to 26 percent. Boys report more white-collar delinquency than do girls. Boys are particularly higher in reporting that they copied copyrighted materials: 43 percent versus 37 percent. The incidence of white-collar delinquency appears to peak between 16 and 17, which would also be the peak period for delinquency in general.
In Singer’s (2014) Buffalo suburb study, the vast majority of adolescents who stated they cheated said they did so only a few times. Only 12 percent of adolescents said they cheated five or more times. A further analysis of the frequency of white-collar delinquency suggests that the students who report higher grades cheated more. This is contrary to what we would expect if low grades were taken as an indication of the need to cheat. The best predictor of white-collar delinquency is school attachment: adolescents who are most dedicated to the stated goals of the school are the least likely to cheat.
The relationship between the incidence of having ever committed white-collar acts of delinquency and several personal background characteristics is illustrated in the figures. They refer to self-reported mean rates, standardized on a 15-point scale to minimize the impact of outliers.
First, age and gender are significant, as indicated in figures 11.1 and 11.2. The effect of gender supports a recent study by Steffensmeier, Schwartz, and Roche (2013), which shows the overrepresentation of males in adult white-collar corporate crime. They hypothesized that male rates of white-collar criminality should be higher because males are more “individualistic” in their orientations (p. 451). They further argue that males are more status conscious, and they are more likely to be autonomous in their business pursuits. In Singer’s Buffalo suburb study, the peak age of white-collar delinquency generally and of the subcategory of cheating is 16. Notably, at that age, a significant difference exists between male and female rates of white-collar delinquencies, 5.6 points for boys and 3.7 points for girls. For the subcategory of cheating (figure 11.2), the difference at age 16 is equally significant in the expected direction, 3.5 points and 2.2 points.
In Singer’s study, the gender difference in white-collar delinquency can be further examined by indicators of social class. An archived measure based on the officially recorded assessed housing value of parents would avoid the response bias that is associated with adolescents exaggerating their social class. When this largely suburban community is divided into quartiles, boys who live in the most expensive housing have the highest level of white-collar delinquency and cheating. Figure 11.3 shows that boys have a rate of 5.0 points in the upper-class dimension, nearly twice the rate for girls in the lowest class. The gender–class difference persists for cheating (figure 11.4). These data support Hagan’s assertion that upper-class (employer-class) youth are the most (p. 231) (p. 232) (p. 233) delinquent; that is, adolescents in the higher class categories have higher rates of white-collar delinquency, controlling for gender.
Other data from Anderman and Murdock (2007) suggest that social-organizational goals predict white-collar delinquency. They specifically looked at cheating in school. They found that students who were less concerned with their grades are more dedicated to mastering their subjects (the love of learning) and less inclined to cheat. They stated:
The basic argument is that when students are mastery oriented, they are unlikely to engage in academic cheating behaviors because cheating will not serve a useful purpose. If the goal of an academic task is to truly master the material, and to truly improve one’s own learning, then an academic shortcut such as cheating will not lead to the attainment of one’s goal.
(Anderman and Murdock 2007, p. 93)
Still, an emphasis on mastery must be assessed eventually. The assessment has consequences. A competitive, status-conscious society is not likely to be kind to its adolescents who do not test well. Even if they score well, it might not be good enough for those adolescents who, like Madoff, cannot confront the possibility that they might fail to be the very best.
The life-course literature has long recognized that the precursors for adult criminality reside in adolescence. Yet theories of delinquency tend to focus on the crimes of those who are disadvantaged. The main precursor to being an adult is adolescence. It is surprising that more of the characteristics of middle-class and upper-class adolescence are not taken into account in explanations of adult white-collar criminals. Still, the limited literature on white-collar delinquency (Hagan and Kay 1990; Pontell and Rosoff 2009) and the recent scholarship of Shover and Hochstetler (2006) indicate the importance of relating adolescence to adult white-collar criminality. The delinquency of the affluent tends to be ignored because their offenses are not considered serious. The seriousness of adolescent offending is frequently linked to acts of violence. Too often, white-collar delinquencies are considered trivial and of no consequence, since the victims are the school or family members.
Just as the criminological literature has been obsessed with identifying the risk factors related to serious violence (e.g., Farrington et al. 2006), so too should white-collar crime scholars look deeply at the risk factors that produce middle-class and upper-class delinquents. This means moving beyond mere opportunities for white-collar crime; it means considering how social class enables value orientations that lead to high rates of white-collar delinquency. (p. 234)
The story of Bernard Madoff is a sensational one about how past minor acts of offending might relate to serious acts of fraud, but the story is an unofficial one. Before his Ponzi scheme, Madoff had never been arrested for any kind of offense. This is the case for the vast majority of middle- and upper-class adolescents who have committed an act that could have landed them in juvenile court. Affluent youths in affluent communities are less likely to be identified as delinquent and to face official sanctions, as indicated by several studies cited in this chapter. If middle- and upper-class white-collar delinquents had received the status degradation that lower-class youths receive in their routine confrontations with the police, then they might be less inclined to repeat their offending.
The impact of formal and informal reactions by officials, parents, and teachers to white-collar acts of delinquency should be examined in considerably more detail. Teenagers’ lives are organized differently today than in earlier times. Middle- and upper-class youths are on their own in many of their daily pursuits. From the privacy of their basement recreational rooms to the cyberspace of their websites, adolescents are increasingly on their own. As a consequence, there is more of an emphasis on the self, as in self-efficacy and self-actualization. How that sense of self needs to be tempered with a sense of others should be examined in more detail than this chapter has been able to identify in terms of adolescent precursors to adult white-collar crime.
Data should be collected on white-collar delinquency as a subcategory of delinquency. Analyses of adolescent cheating are framed largely in terms of educational objectives, with little discussion of criminological theory. The data presented on white-collar delinquency not only are sparse but were collected for the purpose of understanding general acts of delinquency. More needs to be examined in terms of how white-collar delinquency in adolescence and involvement in white-collar crime in adulthood may be connected. Are adult white-collar criminals merely on a continuum of deceitful behaviors that were initially committed in their adolescence?
The biography of white-collar criminals, like Madoff, should be explored for their adolescence. It is too easy to gloss over the commonality of adolescent or young-adult cheating based on the successful careers of the famous (Dionne 1987). Further trivializing the significance of white-collar delinquency is to suggest that everyone at some point in their lives is a delinquent (Gabor 1994). A mix of case study, personal interview, and survey data would ideally find distinctions in the adolescence of white-collar offenders. Just as any analysis of an adult’s criminal career would certainly incorporate his or her youthful offending, so too should adolescence be considered first as a general precursor and then a more specific reason for the white-collar crimes of adulthood.
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