Why do rich people steal?
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It has been an interesting time for white collar crime.
In Vietnam, there is a crackdown on corruption known as the "blazing furnace" campaign. As a result, in late April, the soft-drinks tycoon, Tran Qui Thanh, was sentenced to eight years in prison for his part in a $40mn fraud case. His daughters were also sentenced.
A few weeks earlier, Truong My Lan, a Vietnamese billionaire property developer, was sentenced to death for a $44bn fraud for looting one of the country’s largest banks.
Elsewhere, in the US, Sam Bankman-Fried, co-founder of the failed crypto exchange FTX, was sentenced to 25 years in jail for fraud, in March.
These follow other high-profile cases. In 2022, Elizabeth Holmes was sentenced to 11 years (later reduced by two years in July, then by a further four months earlier this month) for her part in the Theranos fraud, in the US. Europe, too, has had its share of white collar crime, with the Wirecard fraud.
But why do the rich commit crimes? After all, unlike the poor, they do not need to steal to eat. Many wealthy criminals have enough money to last dozens of lifetimes.
Truong My Lan, a Vietnamese billionaire property developer, is sentenced to death © EPA-EFE/Shutterstock
The link between crime and wealth, therefore, is a complicated one. In some cases, it is a matter of the relative impact. Rich people can shrug off small crimes that attract financial penalties.
If you earn £500 a week, a £300 fine is going to hurt. If you earn £10,000, you will barely notice it. This is the reason why countries such as Finland have income-related traffic fines, unlike the UK which uses a penalty system where motorists are disqualified from driving if they build up too many points, inconveniencing rich and poor alike.
For crimes that carry custodial sentences, such as fraud, the rich do have a big disincentive, given that they have more to lose. A wealthy person living their best life in a lovely house would likely find the idea of going to jail an unimaginably awful prospect.
But white collar crime is different to street crime. Stealing millions from a big business, unlike a mugging or robbing a store, does not target an individual, which can make it seem victimless. If the perpetrator lacks empathy, then this may not feel like a crime at all.
Sam Bankman-Fried, co-founder of FTX Cryptocurrency Derivatives Exchange sentenced to 25 years in prison for fraud © Yuki Iwamura/Bloomberg
Yet even for those with a conscience, many working rich find themselves in situations where motives for fraud are rife. The temptation is simply too great or the cultural and peer pressures too much to resist committing the crime.
The Fraud Triangle, a model devised by Steve Albrecht, which builds on the work of Edwin Sutherland and Donald Cressey, neatly describes this. The three sides of the triangle are perceived pressure, perceived opportunity and rationalisation of the fraud. People are motivated to commit the crime when these elements come together, according to this theory.
It is important to note that the motivation for the crime may be driven by the business an individual works for. After US energy trader Enron collapsed, some people at the group claimed to have been incentivised by the company to behave as they did. Similarly, the Wells Fargo scandal in 2016, which involved the creation of fake accounts and resulted in a $185mn fine for the bank, was in part caused by staff trying to meet sales goals.
As Peter van Veen, a director of anti-corruption organisation Transparency International, says: "Getting your incentive structure wrong can have dire consequences for your company."
Some of us will have experience of either incentives at a company that push us to misbehave or a culture where greed is tolerated or celebrated. A person is not necessarily a sociopath, they may just be accepting the pressure placed on them to meet targets without questioning its ethics. As writer and journalist Upton Sinclair said: "It is difficult to get a man to understand something when his salary depends on his not understanding it."
What is perhaps harder to understand is when a wealthy person indulges in a crime where none of these factors are at play, the upside is negligible and the downside considerable. Shoplifting is a good example. A 2008 paper on shoplifting in the US showed that it "was significantly more common . . . among those with individual incomes over $35,000 and family incomes over $70,000".
Although $70,000 is way below the wealth of the ultra rich, it demonstrates that being poor and desperate is not always the motive for the crime. There are plenty of examples of "celebrity shoplifting" or "millionaire shoplifting" which support this. One school of thought suggests these people commit the crime for kicks. The risk-taking behaviour that helped a person make their money or become famous may also give them the confidence or belief they will get away with stealing a $10 lipstick.
Whether it is petty shoplifting or a multimillion-dollar fraud, this confidence among some wealthy criminals may be helped by the knowledge that they also have the money for better lawyers who can ensure more lenient sentences.