When White-Collar Crime Turns Red, Part 1

The traditional image of the non-violent fraudster is altered by researchers who have identified a small breed of white-collar criminals who are ruthless, brutal, and cunning. Their study shows why CFEs should be part of the investigation process.

During the 2004 Christmas season, Mary Ann Clibbery, 69, was bludgeoned to death with a hammer. Less than a year later, a jury found her business partner, George Hansen, 65, guilty of her murder.

In the year prior to the murder, Hansen had misappropriated more than $50,000 from the business; his pilfering escalated steadily throughout those 12 months. Witnesses interviewed after the murder said Clibbery had told them she suspected Hansen was taking money from the business and that she began to fear for her safety. Throughout 2004, the victim had told friends and associates there were several life-threatening incidences that made her suspect her partner was trying to kill her as she became aware of the financial irregularities.

In one instance, Clibbery reported her brakes failed just after her partner had used her car. In another, she woke up to find her couch on fire; shortly before she had fallen asleep, the defendant had escorted her home because she was feeling tired. Actually she had complained of feeling tired often during that year. In the last recorded incident before her death, the defendant handed Clibbery a cup of coffee laced with a pink substance resembling something she detected on a salad he had given her several months earlier. The toxicology report determined that it was a sleep aid known as Zolpidem, a generic form of Ambien. After the coffee incident, Clibbery told her doctor and a police officer she believed her business partner was trying to kill her. Between Dec. 21 and 22, 2004, she was murdered at her business office.

This case is taken from a current study we conducted of 15 white-collar crimes in which we identified a new sub-group of criminal. We refer to these perpetrators as "red-collar" criminals because they commit violent and brutal acts on people when they suspect their fraudulent criminal behavior can be or has been detected.

SUB-GROUP OF WHITE-COLLAR CRIMINALS 

Post-Enron, there has been an increase in the interest and prosecution of white-collar crimes. Research shows the vast majority of white-collar crimes are non-violent; however, the data we gathered for this study revealed a small sub-group of white-collar criminals who harbor a propensity for violent crime. The data found that certain white-collar criminals are capable of unleashing heinous violence -- including murder -- on individuals they believe might have detected -- and therefore could make known -- their criminal activities.

Because of the uniqueness of red-collar crimes, homicide investigators might need to include a Certified Fraud Examiner on a case to determine if the homicide was motivated by the victim's fraud detection. The murder defendants in the red-collar crime matrix (page 31) all had detection of their fraud schemes as their motive to kill. The fraud detection motive is established either from direct evidence or circumstantially from the particular facts in the cases; conclusions of the prosecution and the investigators; defendants' and/or witnesses' statements about their fraudulent behavior; or the jury.

Prior to any violent act, white-collar criminals operate clandestinely, knowing that by committing a violent act, they risk exposing the crime. However, if circumstances compromise their ability to carry out their white-collar crimes, this sub-group will resort to violent behavior to remove the perceived threats to their schemes. The pattern presented in the matrix shows that the trigger in each homicide was the perpetrator's perception that the victim had detected the fraud, or was about to, and would reveal it to others.

So the key factor is the defendant's perception of discovery, even if unfounded. The violent white-collar criminal is willing to assume the risk of detection of both the violent act and the underlying white-collar crime to maintain anonymity. Although assuming the risk of exposure to maintain anonymity appears contradictory, unique psychological dynamics help explain how this violent sub-group of white-collar criminals functions.

PSYCHOLOGICAL PROFILE  

One of the misconceptions that society holds of white-collar criminals is that they aren't like other criminals who lash out violently. Instead, society sees them as criminals who experienced a moral lapse when they engaged in fraudulent behavior. Legally, in fact, fraud is referred to as a crime of moral turpitude, meaning the criminal behavior violates moral sentiment or accepted moral standards of the community, which distinguishes it from other crimes. Furthermore, if white-collar criminals do commit violent acts such as murder, the perception is that it was a fluke, an act analogous to a crime of passion where but for the person's state of mind, he or she would normally not commit such brutal violence.

The data for this study don't support the moral lapse hypothesis; on the contrary, the data show that violent (but not non-violent) white-collar criminals have a history of criminal thinking and behaviors. They endorse the criminal value system and reject the ethics and morals of civilized society. It's important to keep in mind that although white-collar crimes legally are classified as non-violent offenses, this doesn't mean that the perpetrator doesn't harbor violent proclivities.

This small red-collar sub-group is capable of operating in conventional society to a large measure because few see them as truly different. They engage in the same activities as the rest of society: they work, go to school, have families, appear "respectable." Not unlike chameleons, these criminals blend in. A reporter on one case covered in the matrix wrote that it appeared absurd that the defendant, Scott Dyleski, a petty fraud criminal, had turned into a killer. The reporter was fooled by the chameleon effect.

Dyleski was charged and convicted of murdering an attorney, Pamela Vitale. He never admitted to the murder but didn't deny it. The victim was stabbed in the abdomen and stuck about the head with a blunt object more than 25 times. She also had a letter that resembled the letter "H" carved on her back with a sharp object.

Some of the evidence used against the defendant was that prior to the murder, he was engaging in identity theft and credit card fraud. The defendant and an acquaintance were attempting to buy lighting equipment with stolen credit card numbers from one of the defendant's neighbors and to have the goods shipped to the victim's address. The equipment vendor had suspicions that the defendant was using fraudulent methods to make the purchase and wouldn't send the goods. The neighbor whose credit card number was also used was suspicious of credit card fraud but was unsure of who was using her card.

Society somehow can more easily accept how narcotics trafficking leads "blue-collar" criminals to commit murder. There's almost an inherent assumption that killing goes with the territory because drug dealers are hardened criminals who don't hesitate to kill to protect their criminal activity. Yet, few believe that people who wear a suit and a tie are capable of murder because they look so much like "us."

As the sentencing judge in the Dyleski case stated, "People do not want to understand and to accept that someone who looks like you, who is a young man living next door, could be so evil." It's the "chameleon effect" that red-collar criminals use to create the misperception of their motives. In truth, the red-collar criminal is never truly like us.

The current data reject the idea that the red-collar sub-group acts out of character when they commit murder. In fact, the opposite holds true. The ability to kill without remorse was a seed inside these individuals that didn't germinate until the proper conditions developed. Red-collar criminals are psychopaths. In applying the work of psychologist Robert Hare, they are superficially charming, egocentric, insincere, manipulative, and exploitative -- all for the sake of self. Red-collar criminals are more likely to be born with the criminal qualities they possess. Coupled with environmental factors that might influence their psychological traits, the probability that they perceive murder as a viable solution increases.

Red-collar criminals are without conscience. They're incapable of accepting defeat and have little remorse or guilt. They don't tolerate interference with their fraud schemes and the slightest perception of provocation can lead these white-collar criminals to resort to violence. Red-collar criminals feel regret for their criminal acts only if they're caught and incarcerated. In some respects, the red-collar criminal exhibits reptilian qualities of deception and attack; for example, it's not possible to train an alligator to be empathetic, to be aware of its actions, or to show remorse. Comparatively, the red-collar criminals' self-centered, self-gratifying characteristics render them incapable of caring how their behavior affects another person.

The distinction between non-violent white-collar criminals and red-collar criminals is that the non-violent criminals might have empathetic traits or other social values that reject violence. Red-collar criminals don't reject violence as a solution to perceived problems. Killing is just as viable a solution as using deception and manipulation to get to their goals. A question in the Dyleski case was how his anger could result in his committing murder. For Dyleski, the issue wasn't about anger but about using murder as a solution to the problem. Dyleski didn't engage in a moral debate with himself as to whether murder was an option; for the psychopath, emotions don't enter into the decision to kill.

Red-collar criminals have weak self-images and need to be in control of situations. They perceive fraud detection as a desperate blow to their self-images and are willing to resort to violence. As the perceived threat of fraud detection increases, the probability increases that the individuals will decide that murder is the solution -- we saw this in the opening Hansen case. The more the victim seemed to detect the fraud, the more the defendant's will to kill increased.

The ego of a red-collar criminal is inflated, but as thin as a balloon; any attempt to puncture it can result in a narcissistic rage given that they harbor weak self-control skills. There's a high probability the red-collar criminal will become violent if there's a threat of incarceration. The red-collar criminal focuses on the available solution to remove that threat. In several matrix cases, we see the outbursts of sadistic violence shortly after they realize that either their fraudulent behavior might be exposed to the authorities because the victim has confronted them or that the probability of detection is very high. In the Christopher Porco case, for instance, not only did the son use an ax to kill his sleeping father but he also attempted to murder his mother who was next to her husband.

Ironically, there was no doubt in these psychopaths' minds that their solution could fail. Red-collar criminals' egos lead them to believe they can extend their skills as white-collar criminals into violent criminals who won't be detected. Many of the murderers in the matrix cases expressed overblown beliefs in their competency, yet, in fact, left a trail of evidence that clearly also pointed to them as the killers.

The psychopathic trait of egocentricity or grandiosity prevents red-collar criminals from foreseeing how their criminal actions could be detected by law enforcement. However, finding the fraud was crucial for the prosecution to establish a motive for the murder when there was weak direct evidence but supportive circumstantial evidence of guilt. Uncovering the fraud is especially important because psychopaths will attempt to use their lack of documented violent criminality to their advantage. It probably is necessary for the prosecution to employ the services of a CFE to uncover a possible motive.

ENTER THE CERTIFIED FRAUD EXAMINER 

For cases in which the characteristics of the homicide imply fraud detection as a possible motive for the murder, it's imperative for the investigative teams to include Certified Fraud Examiners. In narrowing the field of potential suspects, the CFE will consider if the victim might have uncovered a scheme and was about to expose it -- or even was part of the scheme and was going to talk. The hidden fraud evidence that a CFE exposes might be the best direct evidence to identify a possible suspect. There will be cases in which the killer doesn't personally know the victim; the only connection is the fraud being perpetrated and the fear of exposure that drives the killer. It could be that the white-collar criminal might have killed or had a third party do it. It's the CFE's job to uncover the facts that lead to these conclusions.

The matrix shows patterns that support the decision to employ a CFE. Many of the murders revealed little in terms of motives until the investigation inadvertently exposed an underlying fraud scenario that was in place prior to the homicide. We hope that CFEs on homicide investigation teams will become as vital as forensic experts who test for ballistics, blood splatter, and DNA, to name a few. These forensic experts are naturally considered part of the team because the evidence is visible and often tangible. Yet hidden fraud evidence could also help reveal the murderer and motive. A CFE's intentional fraud examination, not an inadvertent or serendipitous discovery, should reveal fraud as a possible motive for murder.

Investigating the victim as a potential wrongdoer might pose problems for an investigator because it might appear that the victim is on trial. The investigator can mitigate this perception by explaining the necessity of examining evidence that involves the victim that can help lead the investigator to the murderer. Also, the investigator isn't making any claims that the victim was in fact linked to any pre-murder fraud. Moreover, it's not uncommon for CFEs to investigate multiple persons in assessing how fraud was perpetrated and by whom.

The investigator needs to know if the victim was involved in any fraudulent wrongdoing to explain why he or she was a target. The investigator must try to determine what the victim knew that was threatening to someone and if the victim was involved in the underlying white-collar crime. Was the victim in a position to detect fraud? Especially, did the victim detect fraudulent evidence that would have exposed the defendant's criminal behavior? Assuming the victim engaged in fraudulent behavior, there could have been a co-conspirator to the white-collar crime.

The victim's fraudulent behavior might lead investigators to the killer(s). For example, in the Johnson murder, the victim co-conspired with his killer on insurance fraud schemes. The prosecution argued at trial that the victim revealed the killer's fraud scheme to the police and shortly thereafter the defendant shot the victim in the head.

In the matrix case studies, the victims were in unique positions to detect fraud, which explains why they were the homicide targets. It behooves investigators to examine the areas of the victim's occupation or personal life that would have placed him or her in a position to detect fraud. In the Hansen case, the victim was the partner in charge of the books; in the Porco and Petrick cases, the family members were in a position to detect fraud. The defendant, Robert Petrick, a convicted white-collar criminal, was found guilty by a jury of first degree murder of his wife. The victim was found floating in the water wrapped in a tarp, sleeping bag, blankets and chains. The prosecution argued that Petrick killed his wife when she not only discovered the extramarital affair but also the fraud in her bank account.

NOT YOUR ORDINARY FRAUDSTER 

Our study identifies a small sub-group of white-collar criminals who will use physical violence including murder to avoid fraud detection. We classify them as red-collar criminals -- a group quite different from the predominant, traditional, non-violent white-collar criminal. The psychopathic nature of red-collar criminals makes them extremely dangerous not only because they kill without hesitation or remorse but also because they aren't easy to identify because they don't display any indication of a violent nature.

Given the special characteristics of red-collar crimes, Certified Fraud Examiners should be included on a homicide investigation team if the evidence suggests that an underlying fraud exposure prompted the murder. CFEs potentially could lead violent crime investigators to the suspects by determining whether fraud detection had motivated white-collar criminals to become violent.

In the July/August issue: Learn how to identify a psychopathic personality and plan a strategic line of questioning.

  
Frank S. Perri, J.D., MBA, CFE, CPA, lead author of this research project, has worked as a trial attorney for more than 10 years in the areas of white-collar crimes, homicide, and narcotics.  

Terrance G. Lichtenwald, Ph.D., a licensed practicing clinical psychologist, has spent 18 years completing forensic, behavioral, psychological, and security evaluations as well as threat assessments.  

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[Some links may no longer be available. —Ed.]

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