Editorial | Detecting white-collar crime

White-collar crime is described by the American Federal Bureau of Investigation (FBI) as crimes characterised by ‘deceit, concealment, or violation of trust and are not dependent on the application or threat of physical force or violence'.

It is the full range of frauds committed by business and government professionals with the primary motivation being financial, whether this is gain or avoiding losing money or property or a bid to secure a personal or business advantage.

Contrary to popular belief, these are not victimless crimes. A scam can destroy a company, wipe out the life savings of a family, con investors into putting their money on worthless projects, or cause companies to pay more for goods and services. These crimes can also distort the market and create unfair competition.

Malta has a tendency to “underreport, underestimate and often tolerate” white-collar crime, according to European Chief Prosecutor Laura Kovesi. And she is right.

In Malta yesterday, Kovesi did not mince her words on Malta’s lax attitude towards financial crimes.

She said that from 2,200 reports the European Public Prosecutor’s Office received since its inception from all around the EU, only two were from Malta. The Maltese reports did not lead to any investigations since the cases did not fall under EPPO’s authority.

“We cannot just rely on investigative journalists to detect crimes, so the help of national authorities is crucial. National authorities have a duty to inform us of any criminal conduct affecting EU funds,” Kovesi said.

She also complained that the level of crime-detection in Malta related to the EU budget, is practically zero.

What Kovesi is talking about is exactly what got Malta onto the greylist of the Financial Action Task Force – lack of credible action on financial crime.

This leader recognises the big steps taken over the past 20 months to beef up the police force’s financial crime unit and the investment in resources in authorities tasked to serve as a watchdog over companies and financial services firms.

The number of prosecutions has also gone up and several people, previously believed to be untouchable have ended up in court. There appears to be a willingness to tackle financial crime.

But obviously more still has to be done. This must not be an exercise in ticking the boxes.

White-collar crime is problematic and must not be tolerated.

And this hits at inherent Maltese culture that tends to gloss over financial crime, especially tax evasion.

The notion that financial crime is victimless has to end. Businesses suffer when a competitor is given an unfair advantage because of a bribe disguised as a ‘donation’ or ‘commission’. Businesses suffer when they are denied the right to fair competition for public tenders because of someone’s close links to people in power.

Businesses suffer when being honest becomes a costly affair that hits the bottom line.

Kovesi is right when she says that without action there cannot be investigations, prosecutions, and judgments. But to uncover wrongdoing, authorities must not rely only on investigative journalists.

Being proactive in detecting such crimes is a must and rather than pass the buck around, the different public agencies that may be involved in crime-busting have to coordinate and take responsibility.