EDITORIAL INTRODUCTION

White-collar crime and the Great Recession
Neal Shover, Peter Grabosky

WALLS OF SECRECY AND SILENCE

Walls of secrecy and silence: The Madoff case and cartels in the construction industry
Henk van de Bunt

Most analysts of the causes of the contemporary credit crunch have concluded that the supervising agencies failed in their duties. The same is true for studies of several major fraud scandals, including the Madoff affair and the Dutch construction fraud. The remedy seems immediately obvious: more and better regulation and supervision. However, this line of reasoning seems somewhat simplistic by ignoring the question of how illegal activities can remain hidden for many years from supervising agencies, victims, and bystanders. This research article argues that the problem also lies in the successful concealment of illegal activities by the perpetrators and in the presence of silence in their social environment.

The cases analyzed in this article suggest that financial misconduct also could be controlled by breaking the conspiracies of silence. The strengthening of supervision is unlikely to be effective without simultaneous efforts to encourage people to speak out and to give them incentives to want to know and to tell the truth.

Secrecy, silence, and corporate crime reforms
William S. Laufer

Silent or invisible?: Governments and corporate financial crimes
John Minkes

How to effectively get crooks like Bernie Madoff in Dutch1
Henry N. Pontell, Gilbert Geis

Getting our attention
Nancy Reichman

SERIOUS TAX FRAUD AND NONCOMPLIANCE

Serious tax fraud and noncompliance: A review of evidence on the differential impact of criminal and noncriminal proceedings
Michael Levi

This article reviews what international evidence exists on the impact of civil and criminal sanctions upon serious tax noncompliance by individuals. This construct lacks sharp definitional boundaries but includes large tax fraud and large-scale evasion that are not dealt with as fraud. Although substantial research and theory have been developed on general tax evasion and compliance, their conclusions might not apply to large-scale intentional fraudsters. No scientifically defensible studies directly compared civil and criminal sanctions for tax fraud, although one U.S. study reported that significantly enhanced criminal sanctions have more effects than enhanced audit levels. Prosecution is public, whereas administrative penalties are confidential, and this fact encourages those caught to pay heavy penalties to avoid publicity, a criminal record, and imprisonment.

Although it has yet to be proven that prosecution has a greater or lesser impact on these offenders, increased prosecution might be justified for purposes of moral retribution as well as perceived social fairness.

Criminal prosecution within responsive regulatory practice
Valerie Braithwaite

Fairness matters—more than deterrence: Class bias and the limits of deterrence
Paul Leighton

Serious tax noncompliance: Motivation and guardianship
Benno Torgler

TRANSNATIONAL WHITE-COLLAR CRIME AND RISK

Transnational white-collar crime and risk: Lessons from the global trade in electronic waste
Carole Gibbs, Edmund F. McGarrell, Mark Axelrod

Business transactions have increasingly been crossing national borders, thereby presenting greater opportunities for white-collar crime and for the externalization of risk. The global economic crisis, resulting in part from the subprime mortgage scandal, is a prime example of this potential. To develop theoretical perspectives and practical interventions to prevent and respond to the global financial crisis, we consider similar issues of risk and white-collar crime associated with global transactions in electronic waste (E-waste).

Smart (or responsive) regulation is a promising approach for addressing both E-waste and the current economic crisis. This response includes crime prevention, third-party- and self-regulation, and the threat of strong state intervention. Future research should explore the extent to which smart regulation reduces specific forms of white-collar crime and risk, as well as whether these interventions generalize to other transnational problems.

Global E-waste trade: The need for formal regulation and accountability beyond the organization
Dawn L. Rothe

Framing E-waste regulation: The obfuscating role of power
Laureen Snider

Smart regulation and enforcement of illegal disposal of electronic waste
Judith van Erp, Wim Huisman

MORTGAGE ORIGINATION FRAUD

Mortgage origination fraud and the global economic crisis: A criminological analysis
Tomson H. Nguyen, Henry N. Pontell

The study outlined in this article analyzed the responses of 23 subjects previously and currently employed in the subprime lending industry to understand the implications and role of white-collar crime in the contemporary subprime mortgage crisis and to document the rationalizations that offenders use to explain their involvement in mortgage-related crimes. The subjects represented five sectors of the primary mortgage market, including brokerage, lender, escrow, title, and appraisal offices. Secondary sources of data for the study included media accounts, government reports, and industry studies. The research findings detail accounts of mortgage frauds in the subprime lending industry that resulted from inadequate regulation, the indiscriminate use of alternative loan products, and the lack of accountability in the industry.

The study results suggest that the problem of mortgage origination fraud would be prevented best by major reform of financial policies and lending practices that characterize the subprime mortgage industry. Several broad recommendations are proposed in this article that highlight the need to recognize the potential for insider fraud, to enhance government regulation and oversight, to tighten loan qualification requirements, and to increase standards of underwriting. Observations are offered concerning the need to highlight white-collar crime in understanding the global financial crisis and to preventing future debacles.

Echo epidemics: Control frauds generate "white-collar street crime" waves
William K. Black

Diagnostics of white-collar crime prevention
John Braithwaite

Mortgage origination fraud and the global economic crisis: Incremental versus transformative policy initiatives
David O. Friedrichs

Mortgage origination fraud: The missing links
M. Cary Collins, Peter J. Nigro

EDITORIAL CONCLUSION

Forestalling the next epidemic of white-collar crime: Linking policy to theory
Peter Grabosky, Neal Shover

Criminology & Public Policy, July 2010: Volume 9, Issue 3