The Mind and Culpability of Fraudsters
by
Sally Ramage
|
|
|
|
|
|
27 July 2005
Crime Throughout The Ages
Fraud has
been with us and recorded even since the time of the Magna Carta when records
survive which show that in those days of serfdom, the law imposed limits to the
oppression of serfs by their lords.
There was a
Sanctuary Act 1623, which prohibited sanctuaries. Crime abounded well into the
nineteenth century and the Industrial Revolution. Society was in transition as
towns grew rapidly. Crime was increasing in quantity but decreasing in
violence.
Primitive Society And Cultured Society
The Motive In Fraud
Fraud is
often due to motives, which are both qualitatively and quantitatively similar
to non-criminal motives, and it is generally just as biologically normal as
ordinary behaviour.
Penal Codes Of Different Countries
There are
striking differences between the penal codes of different countries today, even
countries with the same general heritage of culture. Bigamy is an offence in
Western countries but in some Arab countries and in many primitive communities,
polygamy is an established institution.
Crime And Punishment
A crime may
be regarded as an act or omission forbidden by law under pain of punishment,
and the term will be used in major or minor offences these crimes including
serious frauds.
Crime And Mental Disorder
It can be
said that there is no justification for the belief that crime, per se, is an
indication of mental disorder, but there can be no doubt that repeated criminal
behaviour, such as to become serious fraud, may be the result of mental
abnormality.
The Official Figures For Offences Called Fraud
The fraud
figures cannot be taken at their face value, for, although the great majority
of these offences are apparently acquisitive, the study of individuals often
shows that a seemingly acquisitive offence is really due to self-preservation
or parental instinct, and that some cases of theft are primarily sexual
offences and are only incidentally associated with the aggressive or
acquisitive instinct.
Responsibility And Culpability
The term
‘criminal responsibility’ is concerned with acquittal on the grounds of insanity
or alternatively with conviction and punishment, and ‘medical culpability’ as
used here is concerned with conviction and the degree of blameworthiness in
cases of minor mental abnormality,
Normal People?
In New York
at the same time studies by Thompson showed that 89% of the New York prison
population was normal. What is normal?
The Fraudster As A Psychopath
It is the
psychopathic personality, which is the most likely of personality disorders
that fraudsters suffer from, reading the facts from case law of serious frauds.
The criminal psychopathic personality may be defined as a person who, although
not insane, psychoneurotic or mentally defective, is persistently unable to
adapt himself to social requirements on account of abnormal peculiarities of
impulse, temperament and character.
Moral Insanity?
In 1835
Pritchard coined the phrase ‘moral insanity’. Sutherland, whose term
"white collar crime" is still used today, found that about 10% of criminals
in New York state prisons were diagnosed as psychopathic but about 75% of those
entering prisons in Illinois. The psychopath therefore, classed as mentally
ill, should be unfit to plead. However, the creative psychopath is seldom
arrested for the crime of serious fraud.
R v Clive Smith (2001) Unreported
The
fraudster Clive Smith was unfit to plead in a Serious Fraud Office case in
2001.
Serious Fraud And Senility
Fewer older
persons commit indictable offences than the rest of the population. But the
survey of UK serious frauds show a high percentage of older persons being
convicted of serious fraud (forty five percent of all serious fraud cases)
which is the inverse of the situation for non-fraud crimes, indicating that
serious fraud is a speciality of older executives.
Of the
convicted persons in the 10 year period 1929 to 1938 (this type of statistic is
no longer collected in prison statistics) 2% of all criminal offences were
committed by men 60 years and over and 81% of their crimes consisted of fraud.
My survey of 5 years of Serious crimes as per the UK Serious Fraud Office's
website show that 45% of serious fraud is committed by men 50 years and over,
10% by men 60years and over.
The recent
Serious Fraud Office prosecution of Guy Pound, Anthony Green and Peter Beard,
Peter Hayward and John Parkinson could be argued to be a case of senility as
three defendants were aged 71, 72 and 76 years old. They were found guilty of
perpetrating a £3.5 million fraud. No medical evidence was sought or given in
this case.
Senescence And Crime
English
Criminal Statistics, since the 1950’s show that persons mainly conducted fraud
and false pretences offences over 30 years of age.
Figures
confirm that in middle age and old age there is a definite shift from the more
overt forms of property crimes, such as robbery, and breaking and entering, to
sex crimes, and violence, and more subtle types of property offence such as
receiving, fraud and false offences. Criminality of old men lies in the fact
that such criminals are committers of crime in which craftiness has an
important place.
If growing
old is as natural a process as growing up, and senescence is the counterpart of
adolescence, it becomes a matter of practical importance to differentiate
criminal behaviour, which is associated with senescence.
It was the
case that Saunders in the Guinness case was found to suffer from senile
dementia. The Poole Trust case is an instance of the defendants being over 60
but perhaps suffering from senescence.
Senility And Fraud
Senility
can be differentiated from arteriosclerotic dementia in person’s accused of
crime. Indeed, where mental abilities are strikingly superior in the prime of
life, a perceptible amount of deterioration due to old age may sometimes, in a
criminal charge such as serious fraud, escape recognition
Aged
criminals, especially fraudsters in the UK, have been for many years treated
under a milder form of discipline than others the Mental background of the
ageing offender before trial is important, but does not receive any attention.
The McNaughten Rules Of The UK
There is a
requirement under the Civil Procedure (Insanity) Act 1964 for evidence to be
put before a jury in a Hearing of Facts in order to determine whether the
defendant did the alleged act in the indictment.
Punishment Of Fraudsters
Crime is
therefore a serious anti-social action to which the state reacts consciously by
inflicting pain. Statutes and common law prohibit it. It can be said that a
crime is also an offence against morality, against a person’s social duty to
his fellow members of society and therefore renders the offence liable to
punishment. Morality is so closely interwoven with social conduct and
immorality with criminal conduct that it seems desirable to pursue the matter
further.
Morality And Fraud
Modern
society is not single minded when passing moral judgements and it is difficult
to see what the norm is for moral behaviour.
Therefore,
crime may result if the tendencies of the individual and his environment
outweigh the resistance, which can be opposed to them.
Society is
jealous of its rights and is not ready to accept with equanimity the
irresponsibility associated in a criminal court with insanity and some forms of
mental defectiveness, or the lessened culpability, which is apparent in some
forms of mental abnormality.
Suppose
that there are genetic differences between the residents of country A and
country B in that country A’s residents are better fraudsters because they have
mental and physical capacities that make for people of great cunning, nerves of
steel, skill in manipulation, then they must receive special consideration
because they are unlike the people of country B. Suppose also that A raise
their children to be fraudsters. Then fraud would be much more common in country
A. Sutherland and later, Croall, give definitions of white-collar crime.
Opportunities abound for members of the white-collar community to engage in
this type of behaviour with impunity.
Deep
psychological studies of psychoanalysts such as Flugel show that, nevertheless,
deterrent punishments are the ally of the law-abiding individual in his
struggle to keep his own anti-social wishes under control. In the UK,
punishment for serious fraud is very lenient and my analysis revealed that , of
the UK 's Serious Fraud Office's prosecutions from 1998 to 2003, 13% of
fraudsters received community sentences and less than one year sentences(ie
less than 6 months in reality)46% of fraudsters received 1 to 2 years prison
sentence, meaning 6months to one year actual prison sentence if they behave,23%
received 3 to 4 years sentence (meaning one to one and a half years in
reality), 15% received 5 to 7 years sentence (meaning two and a half to five
years in prison) , only 3% received 8 to 10 years(meaning 4 to 5 years in reality)
!
The 1824
case of the Trial of Henry Fauntleroy or forgery illustrate that the criminal
offences of fraud and forgery have been diluted from an offence which carried a
sentence to hang, a capital punishment to the recent UK serious fraud case of R
v Mitchell, Kirkup, Mason and Chapman n which the lenient sentences of 120
hours of community service was passed.
Why Do We Still Have Fraud Today?
As material
prosperity increases, so crime increases. With rising standards in material
prosperity, education and social welfare, crime has risen and is rising. Fraud,
like all crime, is a result of a combination of psychological and sociological
factors. So there is a ground base for study of these societies and their
fraudsters. Although social structure does and has had influence on the
individual minds of fraudsters, it can be said that fraud, like all other human
behaviour, is learned.
In a
minority of cases, fraudulent behaviour arises more or less spontaneously
because of individual illness or mental imbalance. It is the fraudsters’ normal
behaviour because the fraudster responds in the fraudulent ways under pressures
generated by the social structure just as the rest of society responds
otherwise to the same pressures.
Malinowski
showed that in poor societies with few possessions, fraud has little place. It
is in huge industrial societies that fraud thrives. Where the symbol of success
is money and businesspersons have high status and prestige.