Bernie Madoff and Leona Helmsley are famous white collar criminals, but most likely you don’t know them personally. However, there is a good chance you are acquainted with another prominent kind of fraudster. In fact, she may be one of your most trusted, long term co-workers or employees. She is a Pink Collar Criminal. Commentary by Kelly Paxton
Be it a small business, Parent Teacher Association, town government, charter school, volunteer organization or even kids athletic club, we are seeing a rise in the number of friendly, “regular type” women who break their employer’s trust and steal their money. These thefts typically range from a few thousand to the low millions of dollars; and beyond money there is the incalculable legal, ethical and emotional fallout that accompany this financial and moral breach of trust. So why is it we are surprised to see a woman steal, when in fact there are far more pink collar criminals today than ever?
The term Pink Collar Crime was coined in a1989 article by Kathleen Daly in Criminology Magazine to describe the growing number lower to mid-level office women—the bookkeepers, office managers, accountants, clerks–who steal from their employers. Unfortunately, Pink Collar Criminals are increasing not only in numbers, but also in the amounts they steal.
I recently spoke with Dr. Freda Adler, author of Sisters in Crime: The Rise of the New Female Criminal. Dr. Adler said she had to defend her work for years after the publication of her book in 1975. At the time, many thought she was trying to criticize the ascendant women’s movement.
Dr. Adler argued the criminal justice system was not adequately prepared for the future increase in female incarceration, with only 4% of the criminal justice budget was dedicated to women. She was proven correct, as the rate of female incarceration did rise. From 1994 to 2003 embezzlement arrests increased 42% for women and only 2% for men, according to the FBI.
Coffee Creek Correctional Facility, Oregon’s only women’s prison, is currently at capacity according to Colette Peters, Director of the Oregon Department of Corrections. The prison was not forecast to reach capacity until 2020.
Dr. Adler would scarcely have to defend her thesis in today’s environment. So the question turns to what has changed to increase the number of pink collar criminals? Put simply, more women are in the workplace and have access to funds.
Women are now the leading or solo breadwinners in 40 percent of American households, compared with just 11 percent in 1960, according to Census Bureau data recently released by Pew Research. Women are more responsible than ever for bringing home the bacon, and that can equate to increased pressure to earn more.
Prior to the 1970s few women had oversight of “company money,” but that is no longer the case, especially at small and medium sized organizations where women are ubiquitous in middle management—but not necessarily above that level. And that explains the “glass ceiling” in embezzlement wherein women on average steal approximately .40-.45 on the dollar per every dollar stolen by a man. Women are now in positions of financial power, but they are lower level positions and generally have more scrutiny than higher ups. Another hypothesis holds that women only steal to make ends meet, and not for grander purposes. However, if this was ever the case, it is not so today. Women are no more inherently honest than men, they simply have not traditionally been in the position to carry out large dollar thefts.
The recent story of Rita Crundwell is a case in point. The former CFO of Dixon, Illinois, (a dependable, long serving employee) stole an amazing $53 million from the town with an annual budget of only $8-9 million. Crundwell was recently sentenced to almost twenty years in prison. While that story made the front pages, farther back in the paper are often numerous stories of women who get caught stealing from a wide range of small organizations, from dental offices (watch out dentists: some 30-60 percent of all practices experience embezzlement, often of the pink collar variety), to the local church. The fact is that keeping any small to medium-sided organization safe from embezzlement is a challenge. The pink collar criminal is often the “most trusted,” long-term employee in an office, having worked at the same place for over 10 years. And for much of the time they may not have stolen. These women do not fit society’s stereotype of a criminal. They are “normal” women from our communities: mothers, breadwinners, churchgoers and volunteers.
What makes them go from law abiding to a criminal? The fraud triangle, whose three cornerstones are pressure, opportunity and rationalization, explains many cases. Most people would never rationalize a theft. But if there is financial pressure and the opportunity is present, a perfect storm for embezzlement often occurs. Many employers tell me they pay their long-term, trusted employees better than average. That is nice, but if they spend more than above average, they may steal. The only thing the employer or supervisor can control is opportunity.
Making sure to have bank statements sent to your home is a start if you are a small business owner. Make sure your employees are taking vacations. Many embezzlement cases are discovered when the employee can’t make it into work due to unforeseen circumstances such as an illness. When someone takes over that employee’s duties they see something that is not right, like a statement from an unknown account or a payment made to a personal credit card.
Bosses and supervisors need to be paying attention to your employees. It sounds simple, but it involves getting into a certain habit of mind. A recent news story describes an Oregon boss who looked out the window one day and saw his assistant driving a Cadillac Escalade. That same employee was known to keep horses as a hobby. Eventually, but painfully late, it donned on the boss to take a look at his books. It turns out this trusted woman co-worker stole over $800,000.
It has long been said men steal for the three Ws: wine, women and wagers. A more recent proverb holds that women steal for the three C’s: cars, clothing and casinos. A dentist recently told me he should have known something was awry when he noticed his office manager’s Lexus was newer than his. Pay attention to your employee’s lifestyles. Finally, perhaps the worst aspect of these cases is the feelings of hurt, betrayal and broken trust that often linger long after the crime itself is resolved. Pink collar criminals, many of whom were like part of an office family, can destroy a victim’s trust in all employees.
Most of the victims I know never saw this coming; a loss of the joy and camaraderie of running a small organization. The money can always be replaced. These victims were successful in the first place and will continue to be successful. You can’t buy back trust. Pink collar criminals are often the “nice ones” in the office. They are nice for a reason. They may be stealing. Kelly Paxton is a Certified Fraud Examiner and licensed private investigator. She is the Principal of Financial CaseWorks LLC and owns the website: pinkcollarcrime.com. She is a frequent speaker on the topic of fraud and Pink Collar Crime.
