Criminalizing white-collar misconduct: Determinants of prosecution in savings and loan fraud cases

Crime, Law and Social Change

Volumn 26, Issue 1, 1997, Pages 53-76

  Tillman, Robert ^a   Calavita, Kitty ^b   Pontell, Henry ^b  

^a ST JOHN'S UNIVERSITY   (United States)

^b UNIVERSITY OF CALIFORNIA   (United States)

Author keywords

[No Author keywords available]

Indexed keywords

EID: 33749429619     PISSN: 09254994     EISSN: 15730751     Source Type: Journal    
DOI: 10.1007/bf02226104     Document Type: Article

References (76)

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2. John Hagan and Patricia Parker, "White-Collar Crime and Punishment: Class Structure and Legal Sanctioning of Securities Violations," American Sociological Review 1985 (50), 302-316.
3. Susan Shapiro, "Collaring the Crime, Not the Criminal: Reconsidering the Concept of White-Collar Crime," American Sociological Review 1990 (55), 346-365.
4. Henry Pontell, A Capacity to Punish: The Ecology of Crime and Punishment. Bloomington, IN: Indiana University Press, 1984.
5. Henry Pontell, Kitty Calavita and Robert Tillman, "Corporate Crime and Criminal Justice System Capacity: Government Response to Financial Institution Fraud," Justice Quarterly 1994 (11), 385-410.
6. Richard Quinney, The Social Reality of Crime. Boston: Little Brown, 1970, 18.5.
7. John Hagan and Ilene Nagel, "White-collar Crime, White-collar Time," American Criminal Law Review 1982 (20), 259-289.
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9. Stanton Wheeler, David Weisburd and Nancy Bode, "Sentencing the White-Collar Offender: Rhetoric and Reality," American Sociological Review 1982 (50), 641-649.
10. Michael Benson and Esteban Walker, "Sentencing the White-Collar Offender," American Sociological Review 1988 (50), 294-302.
11. Hagan and Parker, "White-Collar Crime and Punishment."
12. Robert Tillman and Henry Pontell, "Is Justice 'Collar-Blind'?: Punishing Medicaid Provider Fraud," Criminology 1992 (30), 547-573.
13. Laureen Snider, "Traditional and Corporate Theft: A Comparison of Sanctions," in P. Wickman and T. Dailey (eds), White-Collar and Economic Crime (Lexington, MA: Lexington, 1982), 235-258.
14. Hagan and Parker, "White-Collar Crime and Punishment," 313.
15. Wheeler, Weisburd and Bode, "Sentencing the White-Collar Offender," 657.
16. Wayne Baker and Robert Faulkner, "The Social Organization of Conspiracy in the Heavy Electrical Equipment Industry," American Sociological Review 1991 (58), 837-860.
17. Gilbert Geis, "The Heavy Electrical Equipment Antitrust Case of 1961," in Marshall Clinard and Richard Quinney (eds), Criminal Behavior Systems (New York: Holt, Rinehart and Winston, 1967).
18. Shapiro, "Collaring the Criminal," 361-362.
19. Shapiro, "Collaring the Criminal," Ibid., 362.
20. Gary Becker, "Crime and Punishment: An Economic Approach," Journal of Political Economy 1968 (76), 169-217.
21. Richard Posner, "Optimal Sentences for White-Collar Criminals," American Criminal Law Review 1980 (17), 409-418.
22. Robert Tillman and Henry Pontell, "Is Justice 'Collar-Blind'?: Punishing Medicaid Provider Fraud," Criminology 1992 (30), 547-573.
23. Henry Pontell, "Deterrence: Theory versus Practice," Criminology 1978 (16), 3-22.
24. Pontell, A Capacity to Punish.
25. Joan Neff Gurney, "Factors Influencing the Decision to Prosecute Economic Crime," Criminology 1985 (23), 609-619.
26. Michael Levi, Regulating Fraud (London: Tavistock, 1987).
27. Michael Benson, William Maakestad, Francis Cullen and Gilbert Geis, "District Attorneys and Corporate Crime: Surveying the Prosecutorial Gatekeepers," Criminology 1988 (26), 505-518.
28. Pontell, Capacity to Punish.
29. Michael Geerken and Walter Gove, "Deterrence, Overload and Incapacitation: An Empirical Evaluation," Social Forces 1977 (56), 424-447.
30. Daniel Nagin, "Crime Rates, Sanction Levels, and Constraints on Prison Population," Law and Society Review 1978 (12), 341-366.
31. Richard Henshel, "Considerations on the Deterrence and System Capacity Models," Criminology 1978 (16), 35-46.
32. Peter Nardulli, "The Caseload Controversy and the Study of Criminal Courts," Journal of Criminal Law and Criminology 1979 (70), 89-101.
33. Milton Heumann, "A Note of Plea Bargaining and Case Pressure," Law and Society Review 1975 (9), 515-528.
34. Malcolm Feeley, "Two Models of the Criminal Justice System: An Organizational Perspective," Law and Society Review 1973 (7), 405-425.
35. Malcolm Feeley, "The Effects of Heavy Caseloads," Paper Presented at the Annual Meetings of the American Political Science Association, San Francisco, 1975.
36. James Meeker and Henry Pontell, "Court Caseloads, Plea Bargains and Criminal Sanctions: The Effects of Sanction 17 PC in California," Criminology 1985 (23), 119-143.
37. Michael Holmes, Howard Daudistel and William Taggart, "Plea Bargaining Policy and State District Court Caseloads: An Interrupted Time-Series Analysis," Law and Society Review 1992 (26), 139-159.
38. John Sutton, "Doing Time: Dynamics of Imprisonment in the Reformist State," American Sociological Review 1987 (52), 612-630.
39. Jack Katz, "The Social Movement against White-Collar Crime," in Egon Bittner and Sheldon Messinger (eds) Criminology Review Yearbook 2 (Beverly Hills: Sage, 1980), 75.
40. Michael Benson, Francis Cullen and William Maakestad, "Local Prosecutors and Corporate Crime," Crime and Delinquency 1990 (36), 356-372.
41. Michael Benson, William Maakestad, Francis Cullen and Gilbert Geis, "District Attorneys and Corporate Crime: Surveying the Prosecutorial Gatekeepers," Criminology 1988 (26), 505-518.
42. John Braithwaite, Corporate Crime in the Pharmaceutical Industry. London: Routledge & Kegan Paul, 1984.
43. John Braithwaite, To Punish or Persuade: Enforcement of Coal Mine Safety. Albany: State University of New York Press, 1985.
44. Paul Jesilow, Henry Pontell and Gilbert Geis, Prescription for Profit: How Doctors Defraud Medicaid. Berkeley: University of California Press, 1993.
45. Susan Shapiro, Wayward Capitalists: Target of the Securities and Exchange Commission New Haven: Yale University Press, 1984.
46. U.S. Congress, House, Committee on Government Operations, "Fraud and Abuse by Insiders, Borrowers, and Appraisers in the California Thrift Industry," Testimony of Robert Bonner, U.S. Attorney, Central District of California. 100th Congress, 1st Session. June 13, 1987, 863.
47. U.S. Congress, House, Subcommittee on Commerce, Consumer and Monetary Affairs, Committee on Government Operations, "Federal Efforts to Combat Fraud, Abuse and Misconduct in the Nations S&L's and Banks and to Implement the Criminal and Civil Enforcement Provisions of FIRREA," 101st Congress, Second Session, March 14-15, 1990, 954.
48. U.S. Congress, House, Committee on Government Operations, "Fraud and Abuse," 367.
49. U.S. Congress, House, Committee on Government Operations, "Adequacy of Federal Efforts to Combat Fraud, Abuse, and Misconduct in Federally Insured Financial Institutions," 100th Congress, First Session, November 19, 1988, 142.
50. U.S. Congress, House, Committee on Banking, Finance and Urban Affairs, "Effectiveness of Law Enforcement against Financial Crime," 101st Congress, 2nd Session, April 12, 1990, 1.
51. Pete Brewton, The Mafia, the CIA and George Bush. New York: S.P.I. Books, 1992, 385.
52. Robert Sherrill, "The Looting Decade: S&L's, Big Banks and other Triumphs of Capitalism," The Nation 1990 (November 19), 618.
53. Kathleen Day, S&L Hell. New York: Norton, 1993, 385-390.
54. David Burnham, Above the Law. New York: Scribner, 1996, 239-242.
55. Dick Thornburgh, "Box Score on the Savings and Loans," Remarks by Dick Thornburgh, Attorney General of the United States, to the National Press Club, Washington, D.C., July 25, 1990.
56. The Executive Office of the U.S. Attorneys defined "major cases" as those where: (a) the amount of fraud or loss was $ 100,000 or more, or (b) the defendant was an officer, director or owner (including shareholder), or (c) the scheme involved multiple borrowers in the same institution, or (d) involved other major factors.
57. The Office of Thrift Supervision was created in 1989 by the Financial Institutions Reform, Recovery and Enforcement Act (FIRREA). It assumed the regulatory responsibilities that previously rested with the Federal Home Loan Bank Board.
58. Henry Pontell, Kitty Calavita and Robert Tillman, Fraud in the Savings and Loan Industry: White Collar Crime and Government Response. Final Report to the National Institute of Justice (Washington, D.C., October, 1994), 107.
59. In California these referrals are termed "priority referrals", but the definition is almost identical.
60. The process by which cases of thrift fraud are uncovered and prosecuted often begins with the filling of a criminal referral, either by examiners from a regulatory agency or by individuals at the institution itself. The referral is then forwarded to the FBI and to the U.S. Attorney's Office for investigation. After review, the U.S. Attorney's Office may seek an indictment; if so, the case proceeds to federal court. While many cases are brought through this process, a previous study (Pontell, Calavita and Tillman, Fraud in the Savings and Loan Industry) found that a substantial number of thrift fraud indictments are initiated against persons never named in a criminal referral.
61. This occurs when, in the course of an investigation, the FBI or the U.S. Attorney's Office discover evidence of crimes committed by individuals not named in referrals and seek an indictment based on that evidence. For example, in Texas, where a total of 1,515 individuals were cited as suspects in referrals, we discovered that approximately one-third of the 348 individuals indicted were not named in criminal referrals. In California, the proportion was even higher. There, 1,344 individuals were cited as suspects in referrals and 304 individuals were listed in the indictment file. Of the 304 individuals who were indicted, 206 (68%) did not appear in the criminal referral data base. In short, in both states many more individuals were cited as suspects in referrals than were indicted. But, of those indicted, a substantial proportion had not been cited in referrals. This means that criminal referrals by no means represent the population of al suspected S&L crimes. Rather, both the incidents described in the referrals and the events that form the basis for the indictments can be assumed to be overlapping subsets of the population of all alleged incidents of thrift-related fraud. We had no a priori reason to believe that the two subsets of suspected crimes differed in any substantive way - that the suspected crimes that form the basis for indictments against individuals not cited in referrals differed significantly from the suspected crimes described in the referrals. Yet, the nature of the data pointed to a potential problem of sample selection bias. To test for the influence of sample selection bias on our analysis, we followed the procedures outlined by Richard Berk ["An Introduction to Sample Selection Bias in Sociological Data," American Sociological Review 1983 (48), 386-398]. First, a subset of indicted individuals from the indictment files for whom complete information was available (N = 370) was selected. A dichotomous variable was created in each file indicating whether the individual had been cited in a criminal referral. This variable was then regressed on the major independent variables used in the main analysis producing a correction or "hazard" term, a quantity indicating the likelihood that the individual would have been cited in a referral and thus the likelihood that he or she would have appeared in the sample. This variable was then entered as a regressor into the equations that form the main analysis. These "corrected" models revealed no substantive differences from the "uncorrected" models. With one exception, none of the coefficients gained or lost significance. Thus, we decided that sample selection processes had not seriously biased our sample. For this reason, here we report the results from the uncorrected models.
62. Lewis, Dexter, Elite and Specialized Interviewing. Evanston, IL: Northwestern University Press, 1970.
63. John Lofland, Analyzing Social Settings. Belmont, CA: Wadsworth, 1971.
64. Although the RTC was not created until 1989, it inherited some civil suits filed by the Federal Savings and Loan Insurance Corporation.
65. For a discussion of the role of the board of directors at one of Texas' most notorious thrifts, see James O'Shea, The Daisy Chain: How Borrowed Billions Sank a Texas S&L. New York: Pocket Books, 1991, 113-122.
66. Pontell, Calavita and Tillman, Fraud in the Savings and Loan Industry. 396-397.
67. Stephen Pizzo, Mary Fricker and Paul Muolo, Inside Job: The Looting of America's Savings and Loans. New York: Harper, 1991, 374-375.
68. U.S. Congress, House, Committee on Government Operations, "Fraud and Abuse," 367.
69. Once they were removed the sign was positive, though the coefficient was insignificant.
70. John Hagan, "Why is There so Little Criminal Justice Theory?: Neglected Macro- and Micro-Level Links between Organization and Power," Journal of Research in Crime and Delinquency 1989 (26), 116-135.
71. Pontell, Calavita and Tillman, "Corporate Crime and Criminal Justice System Capacity."
72. Shapiro, Wayward Capitalists.
73. Nancy Reichman, "Regulating Risky Business: Dilemmas in Security Regulation," Law and Policy 1991 (13), 263.
74. Peter Yeager, "Managing Obstacles to Studying Corporate Offences: An Optimistic Assessment," Paper presented at the annual meetings of the American Society of Criminology, Atlanta, 1986.
75. Sutherland, White Collar Crime.
76. See, for example, Frank Pearce and Laureen Snider, Corporate Crime: Contemporary Debates. Toronto: University of Toronto Press, 1995.