Explaining the Inexplicable: Why did they do it?

When lawmakers and judicial authorities break the law, it’s big news.  

Diane Hathaway, a former Michigan SupremeCourt justice, plead guilty to charges of bank fraud on 29-January-2013, based on concealing assets in a settlement on a mortgage to escape foreclosure.  What appears to have happened, as reported by the Associated Press article “Ex-Mich. Supreme Court justice pleads guilty to bank fraud” published in the Toledo Blade 29-Jan-2013, is that Hathaway and her husband, Michael Kingsley, transferred a Florida home to a relative to hide assets and qualify for a short sale.  In a short sale, assets are sold for less than the value of the debt, permitting the debtor to escape foreclosure to avoid “financial hardship”, and the lender writes off the remainder of the debt as uncollectable.  

Hathaway was able to present a false indicator of financial hardship by hiding of assets, and seems to have benefitted from a $600,000 write-off in the short sale, though records filed by the prosecutor seem to indicate that the actual loss by the bank may have been closer to $100,000.  The article seems to indicate that Ms. Hathaway stepped down from the judicial bench as a part of this prosecution, so the crime was committed while a Supreme Court Justice.  (AP, 29-Jan-13)

When an officer of the court commits fraud, this is naturally a very serious offense, and it seems likely Ms. Hathaway faces losing her license to practice law as well as her freedom.  Ironically, she has likely created a debt from legal costs and loss of her livelihood that will not just cost her more than the $100,000 written off in the short sale, but likely will cost her the vacation home as well.  

So, why did she do it?  That's the classic question of criminology, and one I'll attempt to answer.  I think Beccaria’s classical theory of law can provide for an understanding of her actions.  All three “legs” of Beccaria’s theory are present.  Ms. Hathaway had free will, a fundamental of Beccaria’s classical theory.  She doesn’t seem to have been under duress or coercion when she concealed the vacation home, or when she lied to the bank.  While her husband may have been a persuasive fellow, Ms. Hathaway had attained a very high level within the judicial system, and would not have been successful in her role as a judge had she been so readily swayed by arguments into committing a serious crime.  

Ms. Hathaway ostensibly and clearly had rationality, as irrationality would have precluded her career choice.  Finally, Ms. Hathaway would presume to be subject to manipulability, the third fundamental in Beccaria’s classical theory.  As a state Supreme Court justice, she would be aware of sentencing guidelines for her offense, and would know that she is held to a higher standard as an officer of the court.   With the free will to commit crime for the self-interest of $100,000, and with the rationality to understand the catastrophic punishment she faced, the decision Ms. Hathaway made would more subscribe to the neoclassical theory, as the rational choice theory (Cornish and Clarke) would explain that she must have thought her crime would go undetected, and therefore a rational choice, with the perceived benefit outweighing the perceived cost(s).  She stands to lose nearly everything from this crime, and has already sacrificed her integrity.  It seems unlikely she will be able to have any kind of job in the criminal justice system after this crime, so there will be a dramatic penalty in her life besides the potential for a prison sentence.  The thought of a Supreme Court justice committing fraud for $100,000 is disturbing, since it calls into question the integrity of the bench and her judgment on prior cases. 

The prosecution of the crime and plea bargaining is a further example of the neoclassical theory.  Ms. Hathaway is presumed innocent until proven guilty, a key tenant of our justice system which is owed to the neoclassical theory. (Barkan, 2012) Ms. Hathaway is afforded plea bargaining and a modified sentence sufficient to achieve specific deterrence, as well as to provide general deterrence that the criminal justice system works, and has found her out. These aspects of deterrence are elements of the neoclassical view. (Schmalleger, 2012)

A sadly more common crime was reported in The Muncie Star Press on 30-Jan-2013, of a woman who had been placed in a position of trust in a church, which she alleged to have abused to embezzle nearly $200,000.  Angela Renee Linder, 42, has been charged with felony wire fraud, in a plea deal reached with federal prosecutors.  She is subject to $250,000 in fines and up to a 20 year prison sentence for the federal offense.  Ms. Lindner had been placed in charge of payroll, tax filings and “other administrative duties” at the Union Chapel Methodist Church in a Muncie, Indiana, suburb.  Her duties included handling credit cards and payments of those cards, apparently with too little oversight and governance.  (Walker, 2012)

Ms. Lindner is accused of church credit cards under her control to purchase airline tickets, rental cars, meals at restaurants, home improvement projects, weight loss plans, and purchases at stores ranging from clothing and tire centers to wine stores.  She also is alleged to have paid herself unearned wages exceeding $54,000, by adding herself to the payroll of a community center of the church where she was not employed.  The audacity of Ms. Lindner’s crime went so far as to allegedly use $2500 of embezzled funds to establish a charitable fund "purportedly for the purpose of assisting children whose families were victims of fire-related disasters."  She appeared in a newspaper article as recently as November, praising her efforts. (Ms. Lindner had served, until recently, as a county firefighter and EMT).  The proposed plea agreement has been signed, and the U.S. Attorney’s Office stated Ms. Lindner "demonstrated a recognition and affirmative acceptance of personal responsibility for her criminal conduct." (Ibid)

I think that the neoclassical theory of criminology is more closely related to this case than the classical view.  Ms. Lindner presumably had free will and rationality, and was able to decide for herself, repeatedly, clever ways to defraud the church of their funds, and to belie the trust they had placed in her.  By signing the plea deal, she has also demonstrated manipulability, all three qualities important to Beccaria’s classical theory of crime.  However, the strict yet reasonable punishment by the state seems to follow the neoclassical theory, as there were a number of other crimes for which Ms. Lindner could have been charged, yet a plea deal was reached for expediency of the state and with demonstrated contrition by the accused. 

The neoclassical perspective of rational-choice theory (Cornish & Clarke) provides perspective in that Ms. Lindner had made decisions believing the reward outweighed the risk, and seems to have acted in such as manner as she didn’t think she would be caught.  The Routine Activities Theory (Lawrence E. Cohen and Marcus Felson) further provides insight, that the offender was provided the opportunity in the absence of a capable guardian.  Without governance and oversight, the abuse of the church accountant went undetected.  A simple establishment of quarterly review of the church accounts by an audit committee of the church would have provided enough of a deterrent to stop the crime, as Ms. Lindner would have no longer believed her crimes would have gone undetected.  Presented with attractive targets (checkbook, payroll, credit cards) and opportunity (no segregation of duties / “toxic combination”), Ms. Lindner chose to commit crimes without the deterrent of a guardian.  (Barkan, 2012)

It seems that self-delusion played a significant role in both crimes above, as both Ms. Lindner and Ms. Hathaway seemed secure that their crime would go undiscovered, even though they both seem to have left a paper trail that would inarguably show the truth.  Particularly in the case of Ms. Lindner, a simple audit of the credit card statements or payroll would have disclosed the embezzlement. 

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Sources:

Associated Press. (29-Jan-13). Ex-Mich. Supreme Court justice pleads guilty to bank fraud.  The Toledo Blade.  Retrieved on 29-Jan-13 from http://www.toledoblade.com/Courts/2013/01/29/Ex-Mich-justice-pleads-guilty-to-bank-fraud.html.

Barkan, Steven. (2012) Criminology: A Sociological Understanding. (5^th Ed.) Retrieved 29-Jan-13 from http://www.canyons.edu/faculty/wonserr/Intro%20to%20Criminology/Lesson%204%20-%20Classical%20and%20Neoclassical%20Perspectives.ppt

Schmalleger, Frank. (2012) Criminology Today: An Integrative Introduction. Prentice Hall: Boston.

Walker, Douglas. (30-Jan-2012) Woman accused of embezzling $200,000 from Muncie church. Muncie Star Press. Retrieved 30-Jan-2013 from http://www.indystar.com/article/20130130/NEWS02/301300318/Woman-accused-embezzling-200-000-from-Muncie-church?nclick_check=1