Chapter 15: Larceny/Theft and White-Collar Crime
Swanson: Criminal Investigation, 13e
IM-15 | 1
Chapter 15
Larceny/Theft and White-Collar Crime
Objectives
1. Distinguish between tangible and intangible property.
2. Understand the difference between petit/petty larceny and grand larceny.
3. Define, from two different perspectives, white-collar crime.
4. Discuss the most common deterrents to organized retail crime.
5. Identify the five basic categories of shoplifting.
Introduction
This chapter deals with two groups of crimes: larceny/theft and white-collar crime. The
traditional definition of larceny/theft is the unlawful taking and carrying away of the tangible
personal property of another with the intent to permanently deprive that person of his interest in
the property. Tangible personal property means things that have both a physical existence that
can be touched and intrinsic value—such as jewelry, lawn mowers, cameras, laptop computers,
televisions, furniture, clothing, and collectibles such as old rare coins.
Chapter 15: Larceny/Theft and White-Collar Crime
Swanson: Criminal Investigation, 13e
IM-15 | 2
lawn of his home, toss it in the back of an SUV, and drive away.
Larceny/theft is often divided into grand larceny and petit or petty larceny; because states
establish their own laws, they vary from one state to another. Some state statutes establish a
single dollar figure to distinguish between a misdemeanor (often called petit larceny) and a
felony (often referred to as grand larceny). For example, in Virginia, it’s a misdemeanor if the
value of the property illegally taken is less than $200, whereas above $200 a felony has been
Many states have also enacted specifically titled larceny/theft statutes that reflect special aspects
of their economy, such as “timber theft or fraud”; or special problems, for example, “transit fare
evasion, identity theft”; or “organized retail theft” to distinguish between prosecutions aimed at
rings of professional shoplifters causing significant losses that have more serious penalties versus
those directed at the teenager who “lifts or boosts” a tube of lipstick and is charged with “theft
from retail merchants,” a lesser shoplifting offense.
The term white-collar crime was coined in 1939 by sociologist E. H. Sutherland. His white-
collar criminals were characterized by respectability and higher social status, which they used to
commit more complex offenses such as fraud and embezzlement, as opposed to street crimes.
Now, almost 70 years later, the U.S. Department of Justice defines white-collar crime as
Chapter 15: Larceny/Theft and White-Collar Crime
Swanson: Criminal Investigation, 13e
IM-15 | 3
integrity of U.S. currency, coin, and financial obligations.
Lecture Outline
I. Elements of the Crime of Larceny
Although the traditional definition of larceny is still operative in some states, others have
The person from whom the property is taken in a larceny/theft need not own it and may simply
be the custodian of it. The broader larceny/theft laws recognize that the taking may be
accomplished in a variety of ways, such as the following:
• Theft by trick
In states with comprehensive larceny/theft laws, the crime of embezzlement has often
disappeared because the language of the larceny/theft law usually provides a means to bring
charges for that conduct, often by a crime titled theft by conversion.
A. Shoplifting
The national scope of the problem of shoplifting does not normally get the same level of
attention in the media as more serious crimes. But it is nevertheless a very costly crime.
B. Organized Retail Crime
Organized retail crime (ORC) refers to the problem of significant losses to retailers caused
by crews or rings of often mobile professional shoplifters.
C. Deterrents to Organized Retail Crime
Chapter 15: Larceny/Theft and White-Collar Crime
Swanson: Criminal Investigation, 13e
IM-15 | 4
The following measures can be taken by retailers to deter ORC:
D. Factors Contributing to Shoplifting
Understanding the factors that contribute to the problem of shoplifting will help frame the
E. Goods Sold
One of the main factors determining a store’s shoplifting rate is the type of goods sold.
Numerous surveys have shown that the most common items stolen from retail stores in the
United States include tobacco products (particularly cigarettes), health and related products
F. Demographics and Seasonal Variations for Shoplifting
Slightly more men (55%) than women (45%) shoplift, although women take higher-value
items, and juveniles account for roughly 33% of all cases. There are also seasonal variations
G. Categories of Shoplifters
Chapter 15: Larceny/Theft and White-Collar Crime
Swanson: Criminal Investigation, 13e
IM-15 | 5
Shoplifters fall into five basic categories. These include the following:
• Professionals
H. Methods Used by Shoplifters
The following are some of the more common methods used by shoplifters to steal
merchandise:
• Palming
I. Tips for Employees to Deter Shoplifting
These tips are as follows:
• Acknowledge customers as they enter the store or department.
• Know the sales area.
J. Shoplifting Risk Factors Related to Specific Locations
Research does not provide a clear indication of the risk factors related to a store’s location but
shoplifting rates tend to be higher for stores with the following features:
• In city centers and other busy places, with a large number of casual customers
Chapter 15: Larceny/Theft and White-Collar Crime
Swanson: Criminal Investigation, 13e
IM-15 | 6
K. Retail Policies, Staffing, and Stock Control
Retail policies, staffing, and stock control are store management’s responsibility, but these are
heavily influenced by how competitive, profit-driven, and technology-dependent is the
broader retail environment. Self-scan presents new opportunities for shoplifting, despite
L. Store Layout and Displays
Research provides little guidance, but common sense suggests certain store layout and display
features contribute to shoplifting. Most of these relate to the staff’s ability to supervise
shoppers, and stores at greater risk include large ones that make it easier for organized groups
M. Stolen Goods and the Internet
It was calculated in one study that approximately 18%of all stolen goods were sold on the
N. Tips for Theft Prevention Investigators
Retail establishments can also combat shoplifting by a combination of prevention strategies,
such as the following:
Chapter 15: Larceny/Theft and White-Collar Crime
Swanson: Criminal Investigation, 13e
IM-15 | 7
• Post signs about prosecuting shoplifters
O. Local Police Responding to Shoplifting Arrests
The typical scenario that brings the police into contact with a shoplifter occurs when a
II. Bicycle Theft
Bicycle thefts are often not reported to the police. This is largely due to the victim’s belief that
the police are not interested in bicycle theft and will therefore do little or nothing to catch the
A. Clearance Rates for Bicycle Theft
Clearance rates for bicycle theft remain consistently low. One reason for this is that there
typically exists little relationship between the victim and the offender, and hence it is difficult
to identify suspects.
Chapter 15: Larceny/Theft and White-Collar Crime
Swanson: Criminal Investigation, 13e
IM-15 | 8
B. Techniques Employed by Perpetrators to Steal Bicycles
Offenders use a number of techniques to steal bicycles. The technique an offender uses will
often be directly linked to the cyclist’s locking practices. Some common perpetrator
techniques used to steal locked bikes include the following:
• Lifting
C. Asking the Right Questions
The following are some critical questions that law enforcement agencies should be asking
when analyzing a community’s bicycle theft problem, even if the answers are not always
readily available.
Questions relating to the theft pattern of bicycles,
• Are bicycle theft data recorded in a way that aids analysis of the local problem?
Questions relating to locations and times of bicycle thefts are as follows:
• Where do most of the local bicycle thefts occur? At victims’ homes? Workplaces?
Questions relating to bicycle theft offenders are as follows:
• What kinds of offenders are involved? For example, joyriders, acquisitive, drug addicts,
Chapter 15: Larceny/Theft and White-Collar Crime
Swanson: Criminal Investigation, 13e
IM-15 | 9
or professionals?
Questions relating to bicycle theft victims are as follows:
• Whom does bicycle theft harm (e.g., cyclists, business owners)?
III. Identity Theft and Follow-On Crimes
Identity theft, which began to emerge as a problem in the 1990s, has been called the “crime of
the new millennium.” Identity crimes involve two types of criminal acts: (1) identity theft and (2)
the follow-on crimes that occur, such as credit card and check fraud.
A. How Identity Theft Occurs
Abundant opportunities exist for identity thieves to get the personal information of people
they victimize. The following are some of the methods used to obtain data:
• Stealing wallets and purses containing identification, bank, credit, membership, and
other types of cards.
Chapter 15: Larceny/Theft and White-Collar Crime
Swanson: Criminal Investigation, 13e
IM-15 | 10
• Opportunistically using information from lost wallets and purses.
• Family members, relatives, roommates, and acquaintances misappropriating
information.
• Using technology, such as skimmers, to obtain personal data. Skimmers are pager-sized
data collection devices that cost roughly $300.
• Employing card trappers.
• Picking up discarded computers.
• Sending a fraudulent letter and IRS-like form to nonresident aliens who have earned
income in the United States.
B. Follow-On Crimes
Once armed with enough stolen personal identification data, the process of identity theft is
executed and follow-on crimes are committed by the following ways:
• Calling credit card companies, asking them to change the address “your” bill is mailed
to and quickly running up charges on accounts. The victim may be unaware of any
problems for a month or more. This practice is called account takeover.
• Opening up new, fraudulent, credit card accounts using the victim’s name, banking
Chapter 15: Larceny/Theft and White-Collar Crime
Swanson: Criminal Investigation, 13e
IM-15 | 11
C. Investigation of Identity Theft and Follow-On Cases
From an investigatory view, the co-entwining of identity theft and follow-on crimes almost
invariably means investigating multiple crimes, with a number of victims. Additionally, these
IV. Credit Card Fraud
There is a link between identity theft and credit card fraud. However, there are also other types
of credit card frauds. Altogether these frauds create losses of $2 billion globally according to the
Federal Trade Commission.
V. Check Fraud
Check fraud is the forgery, alteration, counterfeiting, or knowing issuance of a check on an
account that is closed or has insufficient funds to cover the amount for which the check is
written.
A. Employee Check-Based Crimes
The following are some signs that an employee in a position of trust such as bookkeeper or
business manager may be or is committing check-based crimes:
• Checks made payable to the business or to cash by customers are deposited in an
account the employee controls.
• Replacement checks to the employee are issued when there is no need to do so, for
Chapter 15: Larceny/Theft and White-Collar Crime
Swanson: Criminal Investigation, 13e
IM-15 | 12
example, the original check was not lost.
VI. Counterfeiting
Although counterfeiting is often associated with currency, there is a vast range of other types of
VII. Frauds, Scams, and Cons
A. Vendor Fraud
Vendor fraud costs businesses more than $400 billion in losses annually. Some fraudulent
practices used by vendors include the following:
• Bidders colluding to set bids at a higher than warranted price per unit and bidders
concealing they are insolvent or have a record of defaulting on their bids.
B. Charity and Disaster Frauds
There are some 70,000 charities. Unfortunately, a very small number are frauds and create
C. Insurance Fraud
Chapter 15: Larceny/Theft and White-Collar Crime
Swanson: Criminal Investigation, 13e
IM-15 | 13
Insurance frauds can be hard fraud or soft fraud. Hard fraud is when someone deliberately
fakes an injury, accident, theft, arson or other loss to illegally collect from insurance
companies. In contrast, soft fraud, also called opportunity fraud, involves normally honest
people who tell “little white lies” and collect reimbursements to which they are not entitled, as
in the case when the value of the items reported stolen in burglary is overstated.
The following are the other types of insurance frauds that can occur:
D. Health-Care and Medicare Fraud
Annual health-care costs are estimated to be $3.5 trillion; the magnitude of spending is a
magnet for fraud.
E. Workers Compensation Fraud
The most common worker compensation fraudulent claim is when people falsely claim that
F. Mortgage Fraud
According to the Federal Bureau of Investigation (FBI), mortgage fraud schemes typically
G. Home Improvement and Repair Frauds
Common home improvement and repair scams include unneeded roofing, gutter, plumbing,
Chapter 15: Larceny/Theft and White-Collar Crime
Swanson: Criminal Investigation, 13e
IM-15 | 14
chimney, or other repairs or replacements; paving driveways with a thin surface that quickly
cracks; using materials and methods that do not meet local building codes; substituting cheap
H. Internet Frauds and Scams
The fastest growing area of theft and larceny involves the myriad of frauds and scams on the
Internet. The Internet Crime Complaint Center (IC3) is a unique partnership between the FBI,
IC3 reports that auction fraud (including nondelivery of merchandise and/or payment) was
by far the most reported Internet offense, accounting for over 58% of referred complaints.
Auction fraud involves the misrepresentations of a product advertised for sale through an
Internet auction site or the nondelivery of products purchased through an Internet auction site.
These types of crimes commonly fall within the following three broad categories:
While the Unlawful Internet Gambling Enforcement Act was passed in 2006 by Congress,
essentially making all forms of gambling via the Internet illegal, a number of underground
“Wash–wash” is what Nigerian cons call the black money scheme, also an advanced fee scam.
It may be run in conjunction with a 419 or as a stand-alone con.
I. Other Frauds: Pigeon Drop and Bank Examiners Cons
Chapter 15: Larceny/Theft and White-Collar Crime
Swanson: Criminal Investigation, 13e
IM-15 | 15
Confidence games are practiced by individuals who understand human nature, gain the mark’s
trust by being good listeners, and through smooth talking, set the hook, and run the scam.
J. Victims of Fraud: Senior Citizens
Senior citizens are particularly susceptible to being the victims of a variety of fraud schemes,
including Medicare fraud, telemarketing and funeral scams, counterfeit prescription drugs,
Internet scams and cons, and phony reverse mortgages.
VIII. Money Laundering
Criminals want to launder money to avoid prosecution, increase their profits, avoid seizure of
their accumulated wealth, evade paying taxes whenever possible, and appear legitimate. Money
laundering is the illegal practice of filtering “dirty” money or ill-gotten gains through a series of
A. Placement
Placement is the process of placing unlawful proceeds into legitimate financial institutions or
systems. Placement is often done by smurfing, or making multiple deposits of cash or buying
multiple bank drafts, which are checks issued by one bank against funds deposited in that
Chapter 15: Larceny/Theft and White-Collar Crime
Swanson: Criminal Investigation, 13e
IM-15 | 16
Another method of placement is the Colombian black market peso exchange (BMPE).
Colombian drug dealers export drugs to North America and Western Europe. Sales of drugs
produce vast amounts of money in the currency of the countries in which the drugs are sold.
B. Layering
Layering involves converting the funds placed into other assets or moving them to other
C. Integration
In integration, the illegal funds that have been placed and layered are now clean and are
IX. Security and Investment Frauds
Securities fraud is any manipulation or deception that affects the purchase or sale of a security
and usually includes the misrepresentation or omission of significant information.
A. Ponzi/Pyramid Schemes
Carlos “Charles” Ponzi formed the Security Exchange Company in Boston in 1919 and
promised to double people’s investments in the company within 90 days. For early investors,
Chapter 15: Larceny/Theft and White-Collar Crime
Swanson: Criminal Investigation, 13e
IM-15 | 17
referred to as a Ponzi scheme, pyramid scheme, or endless chain scheme.
B. Pump and Dump Schemes
The U.S. Securities and Exchange Commission describes pump and dump schemes, which
C. Affinity Fraud
Affinity fraud is run on groups of people who share some affinity to one another, such as
D. One-Year Callable Certificates of Deposit
Unscrupulous sellers of certificates of deposits (CDs) often trumpet the higher rates of interest
to be paid but do not explain to investors about the terms used, thus misleading them. For
E. Promissory Notes
A promissory note is essentially a short-term written I.O.U. that promises to pay its holder,
the investor, the fixed amount invested plus a fixed amount of interest at some specified date
F. Prime Bank Notes
International defrauders invented the prime bank note investment scam, which promises
extremely high yields in a relatively short period of time.
Chapter 15: Larceny/Theft and White-Collar Crime
Swanson: Criminal Investigation, 13e
IM-15 | 18
G. Viatical Settlements
Viatical settlements were developed during the 1980s, in part to help dying AIDS patients
pay their bills; their life insurance policies were bought by investors for less than the face
X. Telephone Scams
A. 1-900 and Foreign Exchange Numbers
Scammers will leave a telephone message or send an email from someone offering to engage
B. Cramming
Cramming is the practice of placing unauthorized, misleading, inaccurate, or deceptive
charges on the victims’ telephone bills, which may be accidental but is often intentional.
XI. Telemarketing and Postal Frauds
Many of the types of frauds discussed earlier in this chapter can be run as telemarketing and
A. Land Fraud
Offerings to sell parcels of land arrive in the mailboxes of potential victims, describing
wonderful land on which to build vacation cabins or retirement homes or even just to hold as
a “prime investment.”
B. Franchise Cons
Franchise fraud offers arrive in the mail touting fast food or quick printing business
opportunities that require a substantial investment.
Chapter 15: Larceny/Theft and White-Collar Crime
Swanson: Criminal Investigation, 13e
IM-15 | 19
C. Unsolicited Merchandise
People may receive gifts in the mail they didn’t request, such as key chains, return address
D. Fees Charged for Normally Free Services
Victimization schemes include child support collection, unclaimed income tax refunds, and
E. Missing Relatives
One of the cruelest frauds is the missing person fraud, which plays on victims’ hopes of
locating a missing loved one.
F. Phony Inheritance Schemes
Everybody fantasizes about winning the lottery or inheriting some money from a distant