Objective
- To assess the impact of technology on the ability to more effectively commit white collar crime
- To assess the impact of technology on the ability to investigate and prosecute white collar crime.
Introduction
The continuing growth of computer use and technology throughout the world of business and government is steadily adding new horizons to the problem of white collar crime. Procedures for transferring, exchanging, and keeping records of money, securities, titles, and money substitutes such as checking accounts, credit cards, letters of credit, and money orders, are done by use of computer and data communications technology. Negotiable securities, bank accounts, accounts payable, credit ratings, etc., are now stored digitally as data within a server and transferred from one place to another through the internet or by satellite.
In spite of all businesses and individuals conducting transactions in the digital world, in practically all white collar crime some form of “paper” is used as a means of deception or as a tool for concealing the true purpose of a transaction.
The ability to conceal transactions is enhanced by the computer. In a matter of seconds a computer can be instructed to transfer large amounts of money and the instruction can be just as easily removed leaving no trace of the fact that a temporary change was made inside the computer. A computer can deal with large volumes of data at very low cost, increasing the possibility of creating large groups of victims in a single act, such as creating large numbers of “personalized” letters, paychecks, or as in the Equity Funding case discussed below, insurance policies.
Technology dominates processes for control of inventories, so that large-scale thefts of goods can be executed and cover-ups manipulated through digital systems. Padded payrolls or fictitious payees can be invented and paid, and false verifying documentation can be entered into these systems, making the transactions difficult to identify.
Through the use of computers, individuals and groups who perpetrate frauds and embezzlements enhance their method of operation and create new takes on old scams, enabling them to steal larger amounts of money while at the same time lessening the chance of detection. For example, an early case of embezzlement by computer occurred over a period of three years, garnered the perpetrator over $1.5 million and was detected by accident. In this case the chief teller of a New York savings bank received a customer’s deposits, pocketed the money, and typed into the computer the information and instructions necessary to transfer money into the customer’s account from one of hundreds of other accounts which had shown little or no activity for several years. Every three months the chief teller temporarily transferred the “electronic money” back to the appropriate account for the purpose of calculating quarterly interest. Whereas this elementary bookkeeping manipulation could easily have bee