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When Enron executives were arrested in 2002 and charged with crimes including fraud and illegal stock manipulation, it ended what might be the largest white-collar crime spree in history. By the time it was over, the company was ruined and thousands of employees lost their jobs. Enron stock had devalued so badly over the previous two years that shareholders would have had better returns had they bought soda pop and cashed in on the recycling deposits instead.
Perhaps one good thing about the Enron fiasco and other corporate scandals like it is that it has shed new light on white-collar crime. The average white-collar criminal, however, is not an executive looting the corporate treasury but a much lower-grade employee who, by design or by opportunity, steals from or defrauds his or her employer.
Referred to as "fidelity" losses, internal theft and fraud has reached epidemic proportions, according to the FBI. The fastest growing category of crime in the United States, employee theft and fraud costs U.S. businesses nearly $50 billion annually, costs the average business between 1 percent and 2 percent of annual sales, and is responsible for nearly 20 percent of all business failures. The Wall Street Journal has reported that up to three-quarters of all employees steal from their workplace at least once.
Despite...