White Collar Crime and Street Crime in Germany. A Comparative Overview

Table of contents

List of figures I

1 Aim and structure of the essay

2 White Collar Crime
2.1 Definition
2.1.1 Sociological definition approach
2.1.2 Legal definition approach
2.1.3 Business oriented approach
2.1.4 Definition by an indicator model
2.1.5 Cognitions from the different definitions
2.2 Characteristic and causes
2.2.1 Types of economic crime
2.2.2 Caused damage
2.2.3 Theoretical causes
2.2.4 The committers

3 Street Crime
3.1 The term of street crime
3.1.1 Introduction
3.1.2 Definition
3.2 Characteristic and causes
3.2.1 Types of street crime
3.2.2 Characterization of the victims
3.2.3 Caused damage
3.2.4 Theoretical causes
3.2.5 The committers

4 Terminal element

4.1 Conclusion

4.2 Prospect

Bibliography

List of figures

Illustration 1: Dimensions of economic criminal behavior

Illustration 2: Concern by crime type

Illustration 3: Extract on basis of: Fraud Tree of the Association of Certified Fraud Examiners

Illustration 4: Damage development of economic crime from 2011 to 2015

Illustration 5: Fraud-Triangle

Illustration 6: Provenance of perpetrators of economic crimes

Illustration 7: Comparison of perpetrator profile of serious economic offense

Illustration 8: Typical character profiles in economic crime

Illustration 9: Phase model of economic offenders

Illustration 10: Distribution of the completed cases of street rome according to damage classes in euro

1 Aim and structure of the essay

The present essay deals in the beginning with the most important definitions of the term of economic crime in Germany. Thereupon the various types of economic crime are described and the resulting damages are explained. Furthermore the most im- portant models of causal research are presented in relation to economic crime. It is demonstrated who the perpetrators are and why they act according to an economic crime. The second part of the essay deals with the concept of street crime in Germany and defines it. The course of the two different theme blocks is basically the same. During further proceeding the types of street crime, a brief characterization of the vic- tims, the resulting damage and causes for the cases of street crime are delineated. Finally some statistical data about the gender and the age groups of the perpetrators are provided to the reader. Overall the aim of the essay is to provide the reader with an insight into the two different subjects and to draw a brief comparision between the two manifestations of crime through the given information.

2 White Collar Crime

2.1 Definition

2.1.1 Sociological definition approach

Firstly, the concept of economic crime was examined sociologically. For a first defini- tion, the well-known criminologist Sutherland characterized the term white collar crime¹ as "crime committed by a respectable person with high social standing within their pro- fession and in violation of the opposite confidence."² According to See, economic crime acted of the enrichment criminality of the rich, the so-called upper world. According to this, the workers were not economic criminals, but thieves or frauds. In Germany, Zirpins and Terstegen first dealt with the concept of economic crime and explained the phenomenon that emerged as the following: Economic crime affects the economic order by touching the basic trust for the economic system.³ It can be seen that the definition, unlike Sutherland, does not aim at factual circumstances or the per- petrators themselves. Since the introduction of the research area by Sutherland in 1939, the concept of economic crime has been lacking. The concept is broad and, according to Sutherland, he often described no crime in a legal sense. Accordingly, white collar crime can not be equated with the German concept of economic crime.⁴

2.1.2 Legal definition approach

The German Criminal Code does not specify the concept of economic crime. However, the fiscal tax law attempts to specify it. Under paragraph 30 (4) (5b) of the Tax Code, economic offenses are dealt with "offenses which, according to their mode of action or the extent of the damage are caused by them, are likely to cause a serious disruption to the economic order or the public's confidence in the economy or the proper func- tioning of the authorities and public bodies”. As you can see this is a very broad and relatively unconcrete definition.⁵ The Criminal Court adopted paragraph 74c of the Court of Jurisdiction in 1971, by identifying possible offenses and determining the com- petences of the County Attorneys.⁶ Thus, an assignment to specialized dishes is pos- sible.⁷ The abovementioned paragraph in the Court of Jurisdiction is the only legal list of criminal offenses, but can not be used as a uniform definition of economic crimes.⁸

2.1.3 Business oriented approach

The business oriented approach is concerned with the fact that the primary goal of companies is the pursuit of profit and profitability. Entrepreneurial decisions are geared to safeguarding liquidity and entrepreneurial potential.⁹ If these targets are negatively affected it is contrary to the company's interest. This means that the theft of products is part of economic crime, but this is not the case for courts and law enforcement agen- cies.¹⁰ According to Heißner a meaningful definition is: "Economic criminals encom- pass all socially inadequate behavioral patterns that are capable of positively and neg- atively influencing the economic success of companies and their recognition, clarifica- tion and prevention of particular business, legal and technical knowledge." It can be seen that its definition is oriented towards the effective combating of economic crime.¹¹

2.1.4 Definition by an indicator model

According to Müller, economic crime is characterized by five decisive dimensions.¹² Illustration 1 illustrates the features used to define economic crime.

Psychology Sociology Business Economics Ethics/Morale Criminal law

Illustration 1: Dimensions of economic criminal behavior¹³

From this the so-called indicator model could be derived, which contains the following indicators:

- Business expertise
- Volatilization of the victim qualities: Scarcely to no perception of the victim from the perpetrator
- Factuality: Breach of the legal standard
- Trust misuse: Violation of fidelity and faith in business transactions
- No violence: Obtaining the goal of the action without physical violence.¹⁴

The indicator model establishes the existence of an economic criminal situation by stating that the more indicators are fulfilled the, the more the evidence is.

2.1.5 Cognitions from the different definitions

Even in 1963 Terstegen and Zirpins assumed that a precise definition of the concept of economic crime would be difficult.¹⁵ They should be right. To date, there is no uni- form and recognized definition of the concept of economic crime in Germany. A simple and common definition is nowadays the following: "Economic crime is the sum of the offenses that are committed and / or endorsed in companies, on companies and by companies, in disregard of the principle of trust." This definition can be the basis but does not describe the phenomenon exhaustive. The Court of Appeal also includes as- pects such as private tax fraud, which is irrelevant in the context of the prevention of economic crimes by companies.¹⁶ Furthermore, the law enforcement authorities use the term to reach a specialization for a precise criminality field. Economically, the term is used to establish actions which are contrary to normal economic processes and which lead to damage.¹⁷ Thus it can be said that the definitions are ultimately always appropriate or inappropriate, but are never right or wrong.

2.2 Characteristic and causes

2.2.1 Types of economic crime

Actually it is clear that in recent years more than one in three companies (36%) have been hit by economic crimes. The impact rate for large companies is a little bit higher at 45%.¹⁸ However only 23% of the large companies are exposed to risk and expect deceptive security. In the question of the expected risk of economic crimes to be af- fected in the next two years, the opinions differ widely. Nearly 50% (47%) of the sur- veyed companies assume a general risk increase for German companies. However, only 29% of the interviewees share this development for their own company.¹⁹ The following illustration 2 illustrates the economic dichotomy that affected the companies.

Abbildung in dieser Leseprobe nicht enthalten

Illustration 2: Concern by crime type²⁰

The most widespread criminal offenses are classical property damage such as embezzlement or theft, infidelity and fraud. For most types of offenses, companies are less concerned about versus 2014. Individual offenses have declined very markedly, especially in small and medium-sized enterprises.²¹ Illustration 3 shows the Fraud Tree of the Association of Certi-fied Fraud Examiners, which allows a classification of different types of economic crime. Fraud is used synonymously for delict from the area of economic crime similar to the concept of the dolose act.²²

Abbildung in dieser Leseprobe nicht enthalten

Illustration 3: Extract on basis of: Fraud Tree of the Association of Certified Fraud Examiners²³

In this way, the three main categories of the fraud tree can be structured in the form of a root tree and if necessary branched with one another. This complements the strictly legal aspect of economic crime by the economic perspective.²⁴

In addition, so-called kickbacks, often referred to as hidden projections, are often used. Thereby exists an agreement between an employee of the company and a supplier in which a payment of excessive or fictitious invoices and subsequent subdivision of the overpaid amount is.²⁵ If the annual financial statements are misrepresented, this is the most significant impairment.²⁶ Despite all the statistics, the Federal Criminal Police Of- fice assumes a high dark figure because the necessary processes and controls for detection and education are often lacking.²⁷

2.2.2 Caused damage

It is difficult to quantify the exact damage or the exact amount of damage caused by economic crimes.²⁸ The difficulty, as already explained, is that economic criminality does not exist as a criminal offense in the law.²⁹ Therefore, the Federal Criminal Police Office draws the criminal offenses from the German judicature act.³⁰ As already stated in 2.2.1, there is a high dark figure in the area of economic crime. So it is difficult to quantify it. In 2004, the Parmalat scandal caused a loss of more than € 10 billion.³¹ In 2015, there were 60.977 cases in Germany related to economic crimes. This corre- sponds to a percentage of one percent of all crimes known to the police. The damage margin is 41.3% and a total loss of 2.9 billion euros, thus undermining the considerable economic impact of economic crimes. The following illustration 4 shows the trend of the damage development of the economic crimes from 2011 to 2015 with a declining trend, but illustrates at the same time the economic extent caused by economic crime.³²

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¹ Cf. Dannecker, G. (2004).

² Cf. Sutherland, E. (1949), p. 9.

³ Cf. See, H. (1997), p. 11

⁴ Cf. Dannecker, G. (2004), p.16.

⁵ Cf. Hauser, H. (2000), p. 30

⁶ Cf. Heißner, S. (2001), p. 224.

⁷ Cf. Albrecht, H.-J. (1999), p. 104.

⁸ Cf. Heißner, S. (2001), p. 230.

⁹ Cf. Gabler Wirtschaftslexikon (2004), p. 2059.

¹⁰ Cf. Heißner, S. (2001), p. 235.

¹¹ Cf. Heißner, S. (2001), p. 239.

¹² Cf. Müller, C. (1995), p. 839 f.

¹³ Cf. Müller, C. (1995), p. 840.

¹⁴ Cf. Peemöller, V. / Hofmann, S. (2005), p. 20

¹⁵ Cf. Zirpins, W. / Terstegen, O. (1963), p. 18

¹⁶ Cf. KPMG (2006b), p. 5.

¹⁷ Vgl. Heißner, S. (2001), p. 238.

¹⁸ Cf. KPMG (2016).

¹⁹ Cf. KPMG (2016).

²⁰ Cf. KPMG (2016).

²¹ Cf. KPMG (2016).

²² Cf. Forum Wirtschaftskriminaliät (2016).

²³ Cf. Association of Fraud Examiners.

²⁴ Cf. Association of Fraud Examiners.

²⁵ Cf. Kümpel, T. / Kohlhoff, K. (2007), p. 112.

²⁶ Cf. ACFE (2006), p. 10.

²⁷ Cf. KPMG (2016).

²⁸ Cf. Berndt, T. / Hoppler, I. (2005), p. 2626

²⁹ Cf. Berndt, T. / Hoppler, I. (2005), p. 2626

³⁰ Cf. BKA (2015), p.3.

³¹ Cf. Pastner, M. (2005), p. 72

³² Cf. BKA (2015), p.4.