White Collar Crime: Review And Application Of Theoretical Perspectives

Introduction

Since Sutherland developed the concept of a White-Collar Criminal, theorists have developed theories and frameworks that have attempted to explain the causes and the consequences of White-Collar offending. White-collar offending has been defined as an illegal or an act deemed unethical that violates the fiduciary responsibility or public trust for a personal or organizational gain (DiMarino & Cliff, 2013). Offenses that fall into this extremely large category include governmental crime, occupational crime and organized crime. This paper aims to act as an exploratory case study into an instance of occupational crime, looking briefly at the case itself, two theoretical perspectives that can be applied to the case and offer prevention strategies for the future.

The case that will be studied in question is the case of Joel Barlow, a former QHealth employee who defrauded the Queensland Health out of nearly seventeen million dollars (Crime and Misconduct Commission, 2013). After exploring Barlow’s offending behaviour, this paper will apply the theoretical perspectives of general strain theory and routine activities theory. Joel Barlow also nicknamed “The Tahitian Prince” whose extravagant lifestyle during periods of fraud activity would eventually commit the single largest fraud ever committed in Queensland Health (Crime and Misconduct Commission, 2013).

Case Summary

The “Tahitian Prince’ was a story that captivated the attention of the public and the media after the discovery of Barlow’s fraudulent behaviour throughout his career with QHealth. Originally born in New Zealand, Barlow was the oldest of six children, living in an extremely unstable family environment, and reportedly would often roam the streets with his siblings to find food (Elks, 2013). Barlow then moved to Australia in 2001, and with the help of an employment agency gained employment with QHealth as a contractor (Crime and Misconduct Commission 2013; Elks, 2013). Through his application process with QHealth, Barlow informed officials that he held numerous tertiary level qualifications, and multiple academic awards of which he obtained in New Zealand; however, these qualifications were falsified (Crime and Misconduct Commission 2013). Upon the commencement of his employment, colleagues stated that he lived way beyond the means of his wage, and to combat this he told them that he was a member of Tahitian royalty and had access to a large trust fund (Crime and Misconduct Commission, 2013). Throughout his tenure with QHealth, Barlow received numerous positions, which eventually led him to a position as a Finance Officer in 2007 (Crime and Misconduct Commission, 2013).

After being promoted to Finance Officer with QHealth, he was granted access to a corporate credit card which held a monthly limit of $10,000, and in September of 2007, Barlow began higher duties as a Principal Finance Officer (PFO) (Crime and Misconduct Commission, 2013). In this position, he became responsible for monitoring various Queensland Health grants, which included the Minister’s Grants in Aid (MGIA) and the Non-Government Organisation Support (NGOS); shortly after obtaining access to these financial accounts, Barlow approved his neighbours company “The Muse” as a QHealth vender (Crime and Misconduct Commission, 2013). Over the remainder of 2007, Barlow proceeded to make subsequent payments, leading to a total amount $11,003 in fraudulent payments and in 2009, Barlow was permanently appointed to the PFO position (Crime and Misconduct Commission, 2013).

Barlow would eventually establish the Healthy Initiatives and Choices (HIC), a company which he established with himself as the individual operator and owner, of which he stated he established primarily for the perpetration of fraudulent activity against QHealth (Crime and Misconduct Commission, 2013). After gaining authorisation of HIC as a QHealth vendor, Barlow proceeded to authorise six payments of $33,000 to the Healthy Choices Initiative from the MGIA funds (Crime and Misconduct Commission, 2013). Barlow would continue to authorise payments throughout 2009, and within the first half of 2009, authorised $482,494 worth of fraudulent payments (Crime and Misconduct Commission, 2013).

At some stage of 2009, the Crime and Misconduct Commission (CMC) received an anonymous complaint regarding Barlow’s fraudulent activities, but due to the anonymity of the individual making the complaint, and on advice from Barlow’s manager, the complaint was disregarded (Crime and Misconduct Commission, 2013). Furthermore, throughout his tenure at QHealth, Barlow would constantly give gifts to colleagues and other QHealth employees during periods where fraudulent activity was occurring. These gifts sometimes solicited, but often Barlow would give these gifts unsolicited and ranged from soaps, to international travel (Crime and Misconduct Commission, 2013). Barlow was known on occasion to fund social outings and functions for the Finance branch of QHealth, and by the end of 2010 had defrauded QHealth for a total of nearly three million dollars over the twelve-month period, and nearly four million dollars since the initial fraud (Crime and Misconduct Commission, 2013). By the time Barlow’s fraudulent activity would be detected, Barlow had defrauded Queensland Health of nearly seventeen-million dollars; Barlow would be sentenced to fourteen years in jail, with a non-parole period of five years (Crime and Misconduct Commission, 2013).

Review of Theoretical Perspectives

As previously mentioned, this paper will be applying two criminological theories to the offending behaviour that was exhibited by “The Tahitian Prince” during his career with Queensland Health. In doing so, this paper will give the reader a brief introduction to both Routine Activities Theory and General Strain Theory before attempting to apply them. The first of these theoretical perspectives is General Strain Theory, which was originally proposed as an addition to the original works of Merton and Cohen’s original Strain Theories (1992). General Strain Theory is a criminological theory that states that delinquency, and by extension crime is caused by the presence of negative emotions such as fear, disappointment and anger (Agnew, 1992). In his addition to Merton and Cohen’s theories, Agnew proposes that delinquency, and by extension crime is the result of these emotions are developed by strains that develop over time (Agnew, 1992). Agnew states that there are three primary forms of these strains, the first of them being the inability to achieve positively valued goals, the removal of positively valued stimuli and the presence of negative stimulus (1992). Agnew explains that the engagement of these behaviours is a natural response to these emotions and that the perpetration of offences is necessary to the reduction of their emotions (Agnew, 1992). Whilst theorists have often speculated on the relevance of General Strain Theory, it is an extremely beneficial addition to the literature, with GST being able to assist in the explanation of white-collar offending. One such reason is that several strains are catalysts in the perpetration of white-collar offending; the inability to achieve one’s economic goals, the introduction of financial problems, the inability to achieve a desired societal position and the occurrence of occupational related stressors (Agnew, Piquero & Cullen, 2009). As stated previously, these strains can introduce deep emotions, which then if not addressed, can result in the individual participating in offences. Agnew et al, also notes that there are individuals who are more likely to participate in white collar offending; individuals who work in corporate positions, particularly managers, are far more likely to offend when their prospects of achieving high ambitions are likely to fail (2010).

The second theoretical perspective that will be applied to Barlow’s offending behaviour is the Routine Activity theory that was developed by Cohen and Felson in 1979.

Felson and Cohen’s theory states that crime is more likely to occur when three conditions are met; the first of these is that there is an offender whom is motivated enough to commit an offence, the second is that there is a suitable target, with some form of perceived value to the offender and finally that there is a lack of a guardian, which can refer to a lack of parental figures, members of law enforcement and diligent peers (Cohen & Felson, 1979). Furthermore, Felson and Cohen argue that whilst the lack of any one of these elements is enough to prevent the completion of any direct-contact predatory crime, a large convergence in any of these elements may lead to a large increase in crime (1979). According to theorists, utilising a routine activity theory to explain White Collar Crime is similar to street crimes, in the sense that they have an opportunity structure, and require a set of conditions before the crime can be committed (Benson, Madensen, and Eck 2009; Gibbs, Cassidy & Rivers, 2013).

Application of Theoretical Perspectives

Similarly, to the previous section of this paper, this section will start with the application of General Strain Theory in an attempt to explain Barlow’s actions, and then will attempt to do the same with Routine Activities Theory. Utilising General Strain Theory, certain stressors can become evident within Barlow’s early age. According to reports, Barlow suffered an unstable childhood and was often required to take care of his siblings which at times involved roaming the streets for food (Elks, 2013). From this assumption, poverty becomes a clear stressor that would have been present in Barlow’s life, something which has become prevalent within the literature, as some offenders may be motivated with the desire to avoid financial loss and hardship (Agnew et al, 2010). However, whilst Barlow’s motivations to commit crime may have originally been fuelled by a desire to avoid the hardships, he had previously experienced, the money had been spent on little more than enjoying an extravagant lifestyle (Elks, 20113). This can also be linked to General Strain Theory, in which Barlow could be seen as not meeting the economic goals and ambitions that he had in place, and therefore began committing crimes as a way to reduce the negative emotions created by his failure .Finally, the loss of a family member is linked to stressors in GST, and prior to the offending, Barlow’s brother committed suicide, which could have potentially created a stressor in Barlow’s life.

The second of the theoretical approaches that was used in this paper was Routine Activities Theory, in which there is three elements that are required before offending can occur. The first of these being a motivated offender; in this instance, Barlow was motivated enough to not only register “The Muse” as a QHealth vendor, but also willing to risk the discovery of his fraud when he established the Healthy Choices Initiatives. The second component of Routine Activity theory is the lack of an optimal guardian to prevent the perpetration of the primary offence. This component was also filled, through a variety of reasons; the first of these was that Barlow’s offending target was QHealth, which was where he worked and had the knowledge of the procedures of where he worked. Furthermore, QHealth lacked the proper procedures to ensure that the paperwork being submitted was not only accurate but was not in violation of any laws and finally, they failed to not only check Barlow’s supposed accolades, but also failed to perform a proper background check in where they would have found his previous offending in a public servant role (Elks, 2013; Crime and Misconduct Commission, 2013). Finally, in regard to the final component of Routine Activity theory, is a suitable target, which was fulfilled by the desire to increase his wealth through illegitimate reasons.

Prevention Strategies

The theoretical approaches that have been utilised in this paper can be utilised extensively in developing a potential strategy that could be applied to not only the offending exhibited by Barlow, but also preventing further offenses. Looking at the offending from a General Strain perspective, by addressing the stressors in Barlow’s life, we can potentially prevent the offending from ever happening. Agnew et al’s research suggests that not only the inability to achieve economic ambitions is likely to encourage criminality, but also the inability to move up the social hierarchy are likely to act as stressors and generate negative emotions (2010). As previously mentioned, Barlow lived in an unstable home, and is likely to have lived in poverty, because of this, had Barlow had been raised in a home that was more stable, as well as grown up in an environment where he had not been in poverty and forced to roam the streets, there was a good chance it would have caused there to be a lack of a stressor in Barlow’s life. Furthermore, the suicide of his brother could also be attributed to the crime occurring, especially as Barlow took care of his siblings due to the unstable nature of his home, and had this not have occurred, he might have avoided committing the offence. Therefore, this paper recommends that Barlow’s offending may have been minimalised had proper support channels been introduced, as well as confirmation that he would have been okay financially had he continued to work effectively for Queensland Health.

The second of these theoretical perspectives looks at the Routine Activities theory, in which it is suggested that criminality and crime occurs when three conditions are met, and in order to prevent, or reduce the likelihood of crime occurring one of these elements needs to be removed (Cohen & Felson, 1979). To do so, each of the elements need to be evaluated, and in turn determine which of the elements are most likely to reduce the potential offending. The first of these potential elements is the removal of a motivated offender, by increasing the risk, and the consequences for the offense, it is likely that Barlow may have avoided committing the offense. The second of these elements is ensuring that the target of the crime is no valuable enough to commit the offence, a potential way of doing this would be the introduction of diligent policies that scrutinise every authorisation of payments, especially as Barlow himself stated that if it had not have been for the incompetence of QHealth, he would not have gotten away with the fraud for so long (Crime and Misconduct Commission, 2013). Finally, had there have been optimal guardians, there would have been a potential for the offending to not have occurred; these guardians include his superiors and how they handled his work, the Crime and Misconduct Commission who should have looked further into the complaint they received and the hiring committee when they appointed him into the various roles he undertook within QHealth. Had any of these parties done their due diligence at vital stages of Barlow’s career, the potential for the minimisation, or even the prevention of the offending as a whole may have occurred. Finally, the recommendations that this paper would make in regards to the knowledge developed from Routine Activities theory would be that organisations, such as QHealth increase the diligence that is utilised when it comes to hiring staff, as well as introducing new policies and procedures that limit the payment of money unless the organisation is a known organisation.

In conclusion, theorists have developed few theories that focus on explaining and detailing the nature of the offences and the elements that make up white-collar offending. General Strain Theory is one of these key theories, in which it looks at the negative emotions and the events that created them and how it directs individuals to divert to criminality, where in comparison, routine activities theory suggests that crime occurs when three conditions are met. This paper aimed to explore a case of occupational crime, in which “The Tahitian Prince” defrauded QHealth out of millions of dollars, apply these two theories to it and make recommendations in order to prevent further offending of this nature. By doing so, it found that the likely stressors that were involved in Barlow’s life was a fear of poverty, which later evolved into a desire to raise his position in the social hierarchy and that he committed his offending to increase his position through financial gain. It also made recommendations in the sense of ensuring that levels of diligence were increased, and that QHealth take background checking seriously.

References

1. Agnew R. (1992). Foundation for a general strain theory of crime and delinquency. Criminology 1992; 30: pp. 47-87
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7. Elks, S. (2013, March 19). Fake prince Joel Morehu-Barlow sentenced to 14 years for theft of $16m from Queensland Health. The Australian. Retrieved from http://www.theaustralian.com.au/news/nation/fake-prince-joel-morehu-barlow admits-theft-of-16m-from-queensland-health/newsstory/928b5bd141df1bff0c29bd776d1ef7c1?sv=de1ec0d809c3b16142f3544bed03a29.
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