General Strain Theory: Rationalization Of Fraud

1. The three aspects of fraud - Perceived pressure, Rationalization, and Opportunity were present in the CIT case as follows:

Furthermore, criminal behaviour is learned, and when this behaviour is been taught, it entails techniques of committing the crime which at times can be complicated and other times quite simple; ' the specific direction of the motives, drives, rationalisation and attitudes.' (Newburn, 2013, pp. 394). Although this theory is rarely used when theorising white collar crime, it is nonetheless an important factor in many offending. For example, a study carried out by Geis of an electrical equipment company found that a lot of manufacture encouraged price fixing by their employee as a way of coping with market pressure. Geis pointed out that these activities was an established way of life where those that are involved learns attitudes and rationalisation that favour and support such misconduct. (Newburn, 2013). A second theory was given by Hirschi and Gottfredson, which is called the Self Control Theory. This theory focus on human nature and the significance of gratification. The central idea of this theory is that individuals peruse self interest and self gratification and the avoidance of pain. In regards to this theory crime is seen as a way in which individuals maximise pleasure and minimise pain. Furthermore, they argued that the differences that there are between those that chooses not to be involved in criminal activities and those that choose to

Robert Merton’s (1938) strain theory attempts to explain why the United States had such high crime rates during that time as well as why certain groups are more likely to engage in crime than others (Book). During that time the Great Depression had hit America hard and immigrants were devastated. In addition, World War II had hit European countries hard and the United States was feeling strained. Merton’s macro theory argues that the cultural values in the United States are built on the idea that if an individual works hard he or she is able to achieve their goals. These cultural goals are strictly financial, including money, power, success and wealth and those who do not achieve these goals simply do not work hard enough. However, when society holds out these same cultural goals for everyone but does not provide the same access to legitimate means to achieve those goals, anomie occurs (class lecture). Anomie, a concept borrowed from Durkheim occurs when institutional norms are no longer in place and do not hold any power to regulate human needs and behaviors and thus, normless takes place and crime is a valid means to attain cultural goals. Furthermore, the methods or institutionalized means used to achieve the

A number of studies do, in fact, find that young people do seek justification before engaging in delinquent behavior (Siegel and Welsh, 2015). But Ronald Akers (1997) asserts that adherence to neutralizing attitudes has been found to be moderately related to delinquent and criminal behavior. Akers suggests that while there is support for the theory it may be because neutralization attitudes dispose individuals to violating the law – instead of offering rationalizations for committing delinquent acts.

The idea of blame, defined as, “A particular kind of response (e.g. emotion), to a person, at fault, for a wrongful action,” plays a significant role in the study of crime, with respect to degrees of “fault.” In most modern societies, “criminal culpability,” or degrees of wrongdoing, makes a difference between the kinds of punishment one receives for his action(s). To be culpable for a crime, there must be a guilty act (Actus Rea), and a guilty mind (Mens Rea). Degrees of culpability often depends on the kind of mental state, (Mens Rea), one brings to the act in which he engaged. How much one is blameworthy for wrongful conduct depends in part on the state of mind in relation to the wrongful conduct. One’s mental state while engaging in wrongful conduct, which in a legal sense is determined by legislators, is characterized by the following terms: purposely, knowingly, recklessly and negligence.

According to Paternoster (2010), the majority of Beccaria’s original deterrence ideals concluded that self-interest to commit an offense could be stopped by legal punishments that are definite, relational, and immediate. Paternoster (2010), determined that Beccaria provided the rational authority with applied strategies to make legal systems more cogent and effective. However, according to Paternoster (2010), Beccaria fell short in providing a developed theory of crime or criminal conduct; he also failed to provide a theory of behavior other than the conception that offenses are motivated by self-interest.

The theory of General Strain is how the strain on an individual leads them toward criminal activities and behaviors. The main concepts of general strain theory explain how a negative relationship affects the individual and their future in the expansion towards delinquency. Negative or harmful relationships are defined as affiliations with others that are partake in similar criminal activity and how an individual believes they should be treated. The strain theory is broken down into three types: (1) Strain as the failure to achieve positively valued goals (Traditional Strain), (2) Strain as the removal of positively valued stimuli from the individual, and (3) Strain as the presentation of negative stimuli.

There are two traditional, primary means for integrating moral reasoning into the analysis of criminal law. The first is requiring a defendant to have a culpable mental state for most crimes. The second is the doctrine of affirmative defenses. There are two types of Affirmative defenses: justifications and excuses. In effect, if a defendant can establish a defense, the defendant should be acquitted because society believes he took the right or at least a tolerable action. Excuses, invoke the notion that while what the defendant did was not justified, the defendant “should not be held accountable for his wrongdoing because he is not to blame for it.”

Though the offender still believes that crime in general is wrong, they will justify or excuse their crime as necessary, morally correct or otherwise acceptable. Offenders might suggest that their crime was acceptable because they are not responsible (“Denial of Responsibility”), no harm occurred (Denial of Injury), the victim deserved to be victimized (“Denial of Victim”), the authorities have it out for them (Condemnation of the Condemners) or there is a higher good served by their actions (“Appeal to Higher Loyalties”). The offender in all of these cases recognizes that their actions were deviant, but argue that it was justified (Sykes and Matza , 2011). Under these theories, humans are considered to naturally want to commit crime, but generally believe that crime is wrong. When they do offend, they consider their offense to be justified exceptions to their belief in the wrongness of crime, the result of a lack of self-control or social bond.

Saul Kassin, a professor of psychology at the John Jay College of Criminal Justice in New York, conducted an experiment relating to self-justification within interrogators. In the experiment, Kassin paired individuals who were either guilty or innocent of theft with interrogators who were told as well if a person was innocent or guilty of theft. The combination of a person thinking they are innocent and the interrogator thinking they guilty, resulted in the most amount of tension between both parties. Kassin’s experiment is a classic example of how self-justification can take over a person’s mind. Once a person takes one step down the pyramid of choice, it is harder for them to see the other side, this is exactly what happened in the experiment. Keise Izuma, another professor of psychology, conducted a similar experiment outside of the criminal justice system. Izuma had 52 participants choose their favorite wallpaper out of 2 selections. Izuma would then have an homes interior expert enter the experiment room and either tell the participants they made a good decision choosing the wallpaper, or if they had made a horrible decision. The expert either praised or scolded the participant for ten minutes. 8/10 of the participants that were scolded switched which wallpaper

In Merton’s (1938) strain theory social structures account for the criminal tendencies found in offenders. Individuals adjust to societal pressures in five distinct ways. Adaptation I, which entails conforming to both culture norms and means, is the most common. The popularity of this adaptation allows a society to function effectively. In contrast, adaptation IV is the least common and gives rise to the rejection of both cultural goals and means. Those that adopt this culture pattern are societal misfits and usually include some such persons as psychotics, psychoneurotics, chronic autists, vagrants, and chronic drunkards or drug addicts.

Some industry-specific factors, such as having valuable near-cash assets, can increase the organization's vulnerability. Also they will need to rationalize the actions as justifiable. The individuals committing the fraud must first convince themselves that their behavior is acceptable or will be temporary. For example, Barry Minkow’s believed that the lies and deceit are for the betterment of his company and that with time everything will eventually return to normal.

“The first leg of the fraud triangle represents pressure. This is what motivates the crime in the first place. The individual

Darrow observes that while certain criminals are behind bars because they have obtained money under false pretenses, newspapers are full of deceptive advertisements, yet those who place them often trade freely. Darrow is right that some people enjoy the right to trade under false pretenses because people accept their deceptions as mainstream, while other people are thrown in jail for participating in similar activities.

Fraud is defined as a deliberate misrepresentation that causes a person or business to suffer damages, often in the form of monetary losses through deception or concealment. And Occupational Fraud as defined by the ACFE is the use of one’s occupation for personal enrichment through the deliberate misuse or misapplication of the employing organization’s resources or assets. Traditional fraud triangle theory by Donald Cressey explains that propensity of fraud occurring in an organization lies on three critical elements which are Pressure, Opportunity, and Rationalization.