The US should start treating all criminals more like white-collar criminals

Life for Martha Stewart is pretty good after prison.
Life for Martha Stewart is pretty good after prison.
Image: Reuters/Kevork Djansezian
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At some point in their life, about 5% of Americans will serve time in prison. Most of them are poor minorities who are stuck in a cycle of re-offending and returning to prison. But the proclivity to commit a crime exists across the income distribution. White-collar crime is less studied and not as well understood; less than 10% of the current federal prison population has committed a white-collar crime. But it may hold important lessons for breaking the cycle of re-offense.

Like street crime, white collar sentences can also be arbitrary and needlessly long. But the prison experience does not seem to produce chronic criminals the way it does for minor drug offenders. A white collar criminal may seem to have more to lose: a well-paid job, family, status. But a stint in prison does not rob them of economic and social stability the way it does for younger, more vulnerable criminals. Any effective overhaul of the the criminal justice system will require giving all prisoners a solid start once they’ve done their time.

Recently, I spoke to Joan (not her real name), a white woman in her mid-60s who went to federal prison in West Virginia (the same one as Martha Stewart) for tax evasion 15 years ago. She sums up the motivation of a well-educated, employed middle class person to commit crime: “Greed—and no one thinks they’ll get caught.”

Until the police showed up, Joan never even considered the possibility she’d be caught. She owned a chain of gas stations in Virginia in the 1990s and under-reported her income on her tax returns. Joan studied statistics and has a masters degree in business. But her statistical training didn’t help her make a more accurate risk assessment. She says, “You can make numbers do anything, but they won’t keep you out of prison.”

Her story has commonalities with other kinds of criminals—primarily how much she under-estimated the possibility of being caught. But white-collar criminals also have some unique characteristics.

We tend to think of white-collar crime as being perpetrated by very rich people, like Martha Stewart and Bernie Madoff, who trap themselves in a web of greed. But the typical white collar criminal is the guy you’d least suspect. According to a global survey from the Association of Certified Fraud Examiners, most people who commit fraud are male (though women are make up nearly half of fraudsters in the US), white, 41- to 50-years-old, well-educated, married, and a mid-level employee with a steady history of employment. White collar criminals are not exceptionally impulsive, like common criminals—their crimes are deliberate and planned out. (According to the survey, most fraud is committed by accountants.)

A common trait among white-collar criminals is that they live beyond their means and need a sense of control. Criminologists speculate middle-class, middle aged people are more likely to commit crimes if they feel threatened by a loss of economic or social status. The threat of loss may explain why there was an uptick in embezzlements during the height of the recession. When people face loss, they are normally more inclined to take on risk.

What makes white collar criminals remarkable is prison does not seem to turn them into career criminals. That’s in spite of the fact that prison is not so terrible for them, relatively speaking.  Says Joan, “The prison campus was as nice as UVA, I was supposed to do some gardening, but often got out of it. I figured out how to work the system and had an easy time.”

After speaking with Joan I was struck that her life, more or less, returned to normal after she was released from prison. She returned to her husband, opened another business, and after five years was able to vote again. She can’t hold certain jobs, qualify for some occupational licenses, public housing and substitute teach—but none of these things impact her daily life or earnings. The only remnant of her criminal past that affects her life is that she can’t qualify for Global Entry when she travels, which she finds mildly annoying.

The fact that she paid her debt to society and moved on probably explains why Joan now pays every penny of her taxes. White collar criminals seem to have more to lose, in terms of earnings and status, when they commit crime. But in many ways they don’t. Lawyers and stock brokers who commit felonies can’t go back to their old jobs, but they have the skills and social network to find other lucrative work.

That they can move on probably explains why white-collar criminals, who don’t have a criminal history, have lower re-offense rates compared to other criminals. That seems to have less to do with the crime and more to do with the fact that white-collar offenders possess characteristics associated with people who don’t reoffend: female, educated, and married. An education and family make it much easier to follow the law.

Decreasing recidivism is part of a recent push to reform America’s criminal justice system. A bill that will go before Congress next month is expected to include provisions for early release of prisoners who participate in job training and drug treatment programs in prison. Since 2012, it has become “best practice” to not ask if someone had a criminal record on a job application. President Obama encouraged more states to adopt the practice last week. And, shorter sentences will probably lower the recidivism rate because less time in prison means less time out of the labor force and fewer years to become criminalized.

These are important steps, but they won’t overcome gaps in the work history for low-skill workers or give them more viable legal alternatives that can compete with the potential pay-offs to crime. The economic incentives are important, but equally vital is having a family. The fact that time in prison decreases the odds you’ll get and stay married is a hard problem for policy makers to overcome and a troubling by-product of mass incarceration.