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Column There IS white collar crime here - it's just that no-one is jailed for it

This week, regular TheJournal.ie columnist Nick Leeson says that Ireland technically doesn’t have white collar crime – but only because no-one is being properly punished for bad business actions.

A NUMBER OF people have remarked to me in recent weeks that: “There is no white collar crime in Ireland”.

That’s a rather startling statement from what I would consider very serious business people. But the statement as it reads is not exactly what they mean.

They are more than aware that there is white collar crime in this country but it is rare – if ever – that you hear of a prosecution. So a swift look at the convictions statistics would suggest that there is little, if any white collar crime.

We all know the case to be very different. There is an abundance of instances – but very little appetite to prosecute. We can all speculate on the reasons, and none of them reflect well on this country, but the fact that the statement has any credibility at all is very worrying. It has many damaging consequences.

Crime, of any sort, needs to be punished. That is why as a society we have laws and why, in businesses, there are standards and operating procedures that must be adhered to. More often than not the two sets of guidelines cross over.

But what is most important is that everyone is aware of the laws and the internal regulations. Throwaway comments from business people such as the one that I mentioned at the beginning of this column actually suggest that a certain amount of white collar crime is ‘okay’.

It reminds me of my own situation many years ago when I chose to cross the line between right and wrong. I didn’t necessarily associate my actions at the time with a fraud – but that is what it was. I certainly didn’t view it as criminal as I entered the first trade into the illegal 88888 account but with hindsight there is no doubt that it was.

The problem was that I had seen it happen so many times in the past, and carried out by many people. Typically, an error would stay in an error account for hours, a day at the outside, and then be resolved. In my case, the error account fast became the most active and most aggressive account that the company owned. Even then, I’d seen error accounts in operation so many times in the past that I actually gave it very little thought. Yes, I was nervous but the immediate intention was to unwind the position as quickly as I could.

I’d seen it happen so many times in the past and thought I could successfully do the same. Of course, I was wrong.

Awareness of the consequences of your actions is extremely important. That is why the law is so clear and precise. Equally, that is why the operating procedures of a company are so clearly defined and conveyed to their employees.

My name has recently surfaced in a number of media reports. A so-called Chinese rogue trader was recently tried in a court in Wenzhou, East China. Wang Caipang is said to have defrauded investors of $15.9 million; borrowed for the stated purposes of buying equipment and property. Instead Caipang is said to have the used the borrowed funds to speculate in the futures and gold markets. Her success rate was not dissimilar to my own, the least being the bulk of the money lost. She was found guilty and sentenced to death.

“I doubt there are many people suggesting that there is no white-collar crime in China after last week’s verdict”

The likelihood is that she will serve two years in prison and then the sentence will be commuted to life in prison. Either way the sentence is harsh but there is one thing that it most certainly is – and that is a deterrent. I doubt there are many people suggesting that there is no white-collar crime in China or that there is no light punishment for such crime in China.

Now I’m not in favour of the punishment handed out by the Chinese authorities but if you are aware of the consequences and you still decide to commit the crime, then you have nobody else to blame. The People’s Republic of China executes the highest number of people annually although other countries, such as Iran and Singapore, have higher per capita execution rates.

I have no real way of proving it but I would like to think that if I had been cognisant of the consequences to my actions, I would have put a halt to them far sooner. I wasn’t aware of the personal consequences. I lost four and a half years of my life to a prison in Singapore and whilst I can appreciate that my actions were criminal from inception it was never quite so clear when it became a crime. That may sound strange but that is why awareness is so important and why certain behaviours cannot be tolerated.

In my case I had become so used to seeing errors in error accounts for short periods of time that it almost became the norm. In Ireland it is time for some strong messages – to say that there is white collar crime and that it is way past the due date to see some punishment meted out. When I’m back in the same circles again, I’d love to hear that something has changed, that white collar crime is not tolerated and neither are people so dismissive of it.

If all else fails, send them to China?

Read previous columns by Nick Leeson>

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    Mute Dave O'Shea
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    Apr 30th 2012, 8:06 AM

    Why do you people stitch it to Nick when he writes honest and intelligent stories … He did his time unlike the shower who have robbed this country of everything .

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    Mute Jamie Judge
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    Apr 30th 2012, 8:12 AM

    Well said Dave!

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    Mute Brendan Walsh
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    Apr 30th 2012, 9:01 AM

    I’d say he did his time in the shower as well.

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    Mute Frank Faldo
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    Apr 30th 2012, 9:33 AM

    I think Nick stitched himself Dave.

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    Mute Conor Oneill
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    Apr 30th 2012, 7:37 AM

    This author should know all about it. Anyhow more money is stolen by white collar criminals than other more violent types!

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    Mute Frank Faldo
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    Apr 30th 2012, 7:39 AM

    I agree Conor Is Nick having a laugh.

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    Mute Conor Conneally
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    Apr 30th 2012, 8:09 AM

    I think this is partly due to the Irish mindset, In Ireland we are so used to the People in Power and Authority shafting the People and getting away with it. whether it is the Clergy,the politicians or the Businessmen the idea that “if you can get away with it, its legal” is one that dictates Irish life

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    Mute I.S.B.A.
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    Apr 30th 2012, 8:18 AM

    White Collar Gangland is thriving in Ireland under the present Government. Anti-competitive practices are costing the Irish economy circa €4 billion each year according to the Competition Authority. That equates to approximately €2,400 per household each year.

    There are currently only two Gardaí working in the Competition Authority. That is the equivalent of two Gardaí patrolling the streets of Dublin at night. The Competition Authority is staffed with Lawyers and economists who do not have a clue about conducting a criminal investigation. Many of whom stem from the industry they are supposed to be regulating i.e. regulatory capture.

    Competition regulation needs a root and branch reform whereby a section of the Criminal Assets Bureau is charged with investigating the anti-competitive practices which are costing consumers and taxpayers millions upon millions of euros. Until that is done no one can say that Ireland takes white collar crime seriously.

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    Mute Sean O'Keeffe
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    Apr 30th 2012, 7:50 AM

    One factor that contributes to White collar crime going unpunished and political corruption being incentivised is ‘regulatory capture’.
    This concept explains a culture which allows regulators to go native. It allows business people access all areas within political decision making. It promotes a culture which damages growth, competitiveness and kills off the concept of meritocracy.
    Senator Sean Barrett explains:

    Regulatory Capture-

    I believe that it is a position of good government that faction and favour do not afford benefits to the few which cost the many. Economists like me refer to this favour to the few as “rent seeking”. A citizen will see this manifested in Ireland through lobbying, corruption and other forms of political and economic manipulation. Ultimately, there is a concept which I have tried to articulate throughout my career – the concept of regulatory capture. This is when an organ of the state becomes faction and curries favour with the government and the individuals it is charged with the job of regulating, administering or funding. As such, that entity fails to serve the citizens and begins to work to its own aims. While it has been highly evident of late in Irish society, this problem is not isolated to our shores. In fact, Richard Posner of the University of Chicago and the Federal District Court has articulated this very clearly in many articles and essays. It is his view that such agencies of government act to the detriment of the people. He states that if they are allowed to engage in activities to augment their size and scope and to increase their budgets and responsibilities beyond which has been articulated by the legislature, they are acting wholly beyond the will of the people and should be abolished. Regulation is required in the world as we do not have perfect information and as such, it can be an improvement to the efficient allocation of resources. I don’t stand against regulation. I stand against the abuse and empire building which has become the habit of many regulators and regulatory officials. I stand for your right to access, to support and to clear, open and transparent government.

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    Mute Joe Sixtwo
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    Apr 30th 2012, 9:22 AM

    Check out the genealogy of the politicians and those who control the financial and legal sector in this country. The old boys club quite small and they are not accepting new members anytime soon.

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    Mute Scarr
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    Apr 30th 2012, 8:23 AM

    Article was ok, a little scant on practical suggestions as to what could be done here though. And nick addressed his past transgressions so I think the 1st 2 posters didn’t read the article. There needs to be strict guidelines and penalties for regulators also, in order to ensure they don’t cross the line into favouritism and appeasement.

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    Mute Celly O'Brien
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    Apr 30th 2012, 8:39 AM

    Lead by example is whats required top management would have been well aware of Nicks use of the notorious 88888 account but chose not to take the moral decision to at the very least stop him doing it and the ethical thing would have been to fire his ass and report him but because he was a money making machine they colluded to their detriment in the end Nick has paid his price for his gross mistakes i dont condone his actions or admire him just saying ethics start at the top of every management structure

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    Mute rodrigo detriano
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    Apr 30th 2012, 9:03 AM

    The real issue regarding white collar crime in Ireland is down to culture! In Ireland you are either in the gang or you’re not! It all begins with the people at the top in politics! If you can somehow wheedle your way into their gang, then you are entitled to basically do as you choose! So long as you keep the political masters sweet, they shall make sure you are fully protected from the law. The Irish people are a very tolerant race, when it comes to people in power committing crimes! Until enough people shout loud enough, nothing’s going to change anytime soon! The law agencies just don’t have the resources to investigate white collar crime! And of course, this is down to politicians, who else?

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    Mute Sean O'Keeffe
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    Apr 30th 2012, 10:07 AM

    When buying and selling are controlled by legislation, the first things to be bought and sold are legislators.
    P. J. O’Rourke

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    Mute Ivor Point
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    Apr 30th 2012, 9:02 AM

    There is no white collar crime in Ireland because the current government and previous governments are behind the protection of the individuals and corporations that practice what would be a crime in any other nation. Since the governments own regulatory bodies and attorney general don t move against the thieves – logically it is no crime just as in law you cannot call a killer a murder if the state determines there is no case to answer . That is how patronage works and why Bertie was so cosy with the construction industry and their brown envelopes and this administration keep paying the ‘names ‘ out of the public purse, so cop yourselves on lads.

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    Mute LoyalIrish Citizen
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    Apr 30th 2012, 10:20 AM

    Maybe the author and the commentators here should actually read the rule books to understand why white collar crime is never punished.

    Most so called western civilised countries have so many ambiguous Acts of Parliament and Statutory Instruments that its impossible to make sense. This deliberate by design.

    The length of time it takes to find out the simplest of things is built into the design of law that those employed in law won’t make the effort to do what is right.

    Ireland has a special case where they have illegally introduced opinions into law and the pretentious will have opinions (lies) that take precedence of the ordinary people.

    The best asset of the fraudulent in Ireland is those employed in law and that these people are as thick as to short planks. Ireland needs to sack the lot of them and get a new rule book.

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    Mute Patrick F. O'Reilly
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    May 1st 2012, 6:32 AM

    Let me give a simple example of white collar crime on which no action has been taken; in the bad ‘ole days and in order to get mortgage finance punters would deliberately misstate/overstate their assets.Sometimes this would be done at the urging of the local sales person at the financial institution,sometimes, this would be ably assisted by a “valuer”.Sometimes the borrower would act alone.In all cases where such overstatement was done, fraud was or at least the arguable elements of fraud were present.Nothing done.Why not?

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    Mute Declan Pollard
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    May 1st 2012, 12:22 PM

    I blame the nod and a wink culture is endemic in the business community in Ireland. It’s embedded in the Irish psyche and the stroker who can pull a fast one and get away with it is still implicitly held in esteem by most of us. You have to ask yourself how people who did the horrific damage to our economy can still strut around publicly with smug grins on their faces and nobody confronts them! I think it’s safe to say that if it was another country, they would be in hiding afraid to surface. If Nick did what he did here, I think he wouldn’t have suffered the consequences that he did.

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    Mute Seamus McDermott
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    Apr 30th 2012, 4:29 PM

    Just remember that “kneecap” is a verb as well as a noun.

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    Mute Cliff Grebouwski
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    Apr 30th 2012, 7:21 PM

    Nick, it’s laughable to suggest that you didn’t know that creating an account to hide your losses was a fraudulent and therefore criminal act.
    Your attempt to distance yourself from any culpability really holds back your credibility as an author-even in this article, which directly corresponds to your own situation, you talk in abstract terms:

    “I didn’t necessarily associate my actions at the time with a fraud”

    or

    “if I had been cognisant of the consequences to my actions, I would have put a halt to them far sooner”

    and

    “In my case I had become so used to seeing errors in error accounts for short periods of time that it almost became the norm.”

    All someone else’s fault then? Your inability to make a simple admission of guilt, without need for qualification, smacks of someone with borderline NPD.

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