Hiding in Plain Sight: The Spiraling Cost of White-Collar Crime

While losses from financial fraud continue to dwarf those from robbery and burglary, white-collar crime prosecutions are at their lowest level in a generation. AIT offers solutions to help law enforcement agencies investigate—and close—these complex cases.

(Dulles, VA) August 19, 2015—White-collar crime is one of the most destructive—and most under-policed—types of criminal activity in the United States today. Actionable Intelligence Technologies (AIT), a leading developer and supplier of advanced financial investigation systems, notes that while the total lost every year to white-collar crime is unknown, the Federal Bureau of Investigation and the Association of Certified Fraud Examiners give an estimated range of $300 to $600 billion per year,1 an order of magnitude larger than total losses from property crime and bank robbery combined.2

One reason for the relative lack of public attention given to white-collar crime, Susan Deehan, Chairwoman of AIT says, is that it is often perceived not as a criminal offense at all, but as bad judgment on the part of the victim. This in turn can influence the way the offense is treated by law-enforcement and regulatory agencies—and when offenders are convicted, by the courts that sentence them. The cost of white-collar crime is thus frequently (and radically) underestimated, both because it is inherently non-violent and because the price tags attached to some economic crimes are so staggering that they are difficult to comprehend. According to a leading expert in the field, the price of bailing out a single corrupt savings and loan institution surpassed the total of all the bank robberies in American history.3

Meanwhile, according to a new report on Department of Justice data, federal prosecution of white-collar crime has hit a 20-year low. The analysis of thousands of records by Syracuse University shows a decline of greater than 36% in such prosecutions since the middle of the Clinton administration, when the decline first began. In the aftermath of the 2008 financial crisis there was a slight uptick in prosecutions, a trend that did not continue. The report notes that the projected number of prosecutions this year is 12% less than last year and 29% less than five years ago.

“The decline in federal white-collar prosecutions does not necessarily indicate a decline in white-collar crime,” Syracuse researchers note. “Rather, it may reflect shifting enforcement policies by each of the administrations and the various agencies.” Underscoring that assertion is a recent study by researchers at George Mason University tracking the increased use of special Justice Department agreements that allow corporations—and often their executives—to avoid being prosecuted. Before 2003, researchers found, the Justice Department offered almost no such agreements. Between 2007 and 2011, however, 44% of cases were resolved through these deals, known as deferred prosecution agreements and non-prosecution agreements.4

“The root issue here,” says AIT’s Tim Deehan, “is not a lack of interest on the part of the Department of Justice—or any other law enforcement entity—in punishing criminals. Far from it. The issue is resources. Crimes like money laundering and securities fraud are way down the list in terms of closed cases because the voluminous documentation involved in white collar crimes requires significant resources to detect, investigate, and successfully prosecute. The conventional process requires investigators to enter vast amounts of data into a program like Excel—which can take months or even years—in order to analyze all the transactional activity involved.”

To help law enforcement agencies expedite this process, AIT has developed the Comprehensive Financial Investigative Solution, CFIS, which allows an investigator to process and analyze financial records exponentially faster and more accurately than would be possible with manual methods.

Susan Deehan, AIT’s Chairwoman and CEO, says, “The key to success in financial investigations is the ability to leverage advanced technology that allows an investigative group to conduct a comprehensive analysis of all the data in a case in a timely manner. This gives the agency the ability to successfully win cases that would otherwise either be greatly curtailed, discontinued or defeated at trial.”

Investigators using CFIS technology, she says, can perform data entry and analysis in hours and days that would take months and years using conventional methods. The automatic analysis performed by the CFIS system immediately displays source and application of funds, allowing investigators to identify and follow money that would normally long since have been laundered.

AIT is committed to helping law enforcement, government agencies, and private-sector forensic accountants get a better handle on white-collar crime. The company’s experience, and that of its clients, proves that CFIS can enable investigators both to significantly expand their active caseloads and improve their closure rates.

About AIT:

Headquartered in Dulles, VA, award-winning Actionable Intelligence Technologies is the nation’s leading supplier of solutions for financial investigations. AIT’s customers include the New York Attorney General’s Office, United States Attorney’s Office, the Criminal Division of the Internal Revenue Service, the United States Postal Inspection Service, Department of Securities, Securities and Exchange Commission, Federal Trade Commission, and other important state agencies, as well as the Miami Dade Police Department, United States Department of Agriculture, numerous commercial and international forensic accounting firms and many others. Founded in 1998 by Susan M. Deehan and Tim Deehan, AIT is dedicated to helping financial investigators make our country a safer place to live. AIT’s mission is to fight against financial crime by delivering the technology and expert knowledge to detect, investigate, and permanently dismantle the criminal organization. References available on request. For more information, visit www.aitcfis.com.

1. Stewart, Emily, “White-Collar Crime Costs Between $300 To $600 Billion A Year,” ValueWalk, July 9, 2015. valuewalk.com/2015/07/white-collar-crime-stats/

2. FBI Uniform Crime Reports, 2010.

3. Henderson, Les, Crimes of Persuasion, Coyote Ridge Publishing, 2003.

4. Sirota, David, “US Prosecution of White Collar Crime Hits 20-Year Low,” International Business Times, August 4, 2015. ibtimes.com/us-prosecution-white-collar-crime-hits-20-year-low-report-2037160

Media Inquiries:
Karla Jo Helms