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Flourishing fraud

Fraud and other white-collar crime — big and getting bigger.

Heart of currencyFor sociopaths, the ability to commit fraud is a job skill, a core competency. That doesn’t mean sociopaths are responsible for all fraud, but they are exceptionally good at it.

No one knows exactly much fraud and white-collar crime is being committed, but the problem is huge. Consider:

Fraud isn’t included

Despite the explosive growth in fraud and white-collar crime, statistics reported by the Federal Bureau of Investigation (FBI) shows a declining crime rate. Why? Fraud is not included in the most commonly collected crime data.

The FBI collects crime data through the Uniform Crime Reporting (UCR) program. The program tracks only eight selected offenses:  murder and non-negligent manslaughter, forcible rape, robbery, aggravated assault, burglary, larceny-theft, motor vehicle theft and arson. These are called Part I offenses and are presented in three categories—violent crimes, property crimes and hate crimes.

Fraud is classified as a Part II crime, which means that it is only measured when an arrest is made. As a result, the data appear to indicate that crime is going down, when in fact crimes like credit card fraud and identity theft are growing exponentially. Here are recent crime reports:

Crime in the United States, 2011

Hate Crime Statistics, 2011

A new method of measuring crime, called the National Incident-Based Reporting System, collects substantially more information related white-collar crime, but many law enforcement agencies are not yet using it.

Although fraud information is not collected in the Uniform Crime Report, the FBI has beefed up its fraud investigation through its Financial Crime Section. In 2012, the agency released a report to the public on financial crimes. Actor Michael Douglas, who starred in the 1987 movie Wall Street, even made a public service announcement for the FBI.

FBI Financial Crimes Report 2010-2011

Sweetheart scams

Fraud cases in which the perpetrator and the victim are romantically involved are sometimes called sweetheart scams or romance scams. According to data collected via the Internet Crime Complaint Center (IC3), in 2011 more than 5,600 complaints of romance scams were filed. Losses totaled $50.4 million, or an average of $8,900 per victim.

Based simply on the e-mails that Lovefraud receives, the actual number of sweetheart scams is probably far higher than the number reported to the IC3.

 


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