Dissertation_Ciaran Ahern_Final

2
‘If you can learn a simple trick, Scout, you’ll get along a lot better with all kinds of
folks. You never really understand a person until you consider things from his point of
view…until you climb into his skin and walk around in it.’
– Atticus Finch, To Kill a Mockingbird, p. 30

3
Table of Contents
1. Introduction……………………………………………………………...…….5
2. Preliminary Issues……………………………………………………………..7
a. Does Prison Work?
b. Civil or Criminal Liability for Fraud?
c. Individual vs. Corporate Liability
3. Fraud……………………………………………………………………...…10
a. The Definition
b. What Do We Know About The Damage Being Done?
c. Current UK White-collar Fraud Sentencing Trends
d. Tariffs
e. Purpose of Sentencing Fraud
4. Attitudes to Fraud…………………………………………………………….15
a. Perceived Public Attitudes
b. Media Effect on Fear, Punitiveness
c. Moral Panics and the Politicisation of Crime-control
d. Voices for change and Forgiveness
5. Restorative Justice……………………………………………………............22
a. Restorative Justice in a Corporate Context: The Strength of Weak
Sanctions in Deterrance
b. Accountability in Restorative Justice
c. The Role of Culture and Society
d. Shame and Reintegration
6. Whither White-Collar Fraud?.......................................................................... 33
a. Spiraling Sentences and Deterrence
b. Fines
c. Zero-Tolerance

4
d. Role of Morals in Offending
e. What Works
7. The Alternatives…………………………………………………………….. 41
a. Plea Bargains / ‘Discussions’
b. Sentencing Circles
c. Community Sentences
d. Serious Crime Prevention Orders Plus
e. Deferred Prosecution Agreements
f. The Annual General Meeting as a Restorative Conference
8. Conclusion…………………………………………….…………………….. 49
9. Bibliography………………………………………………………………… 51

5
Introduction
Were one to look only at the high-profile United States white-collar fraud cases, such
as those of Bernard Madoff, Jeffrey Skilling and Bernie Ebbers, a skewed version of
reality would emerge regarding the treatment of white-collar fraud offenders in the
criminal justice system (CJS), depicting it as inflicting draconian penal punishments
on anyone who dares take advantage of the goodwill of investors. While politicians
and the judiciary react to the manifest public anger about these crimes with the
instigation of harsher measures to serve the public good, they often fail to
differentiate between what is precisely in the public interest and what is simply a
reflection of popular opinion.1
This paper intends to show that perceptions about what the public and victims want
are not always interpreted appropriately by policy makers. While tariffs for white-
collar fraud in the United Kingdom (UK) appear to be more moderate than in the
United States (US),2
this paper will examine the flaws in the current system and
identify areas where alternatives may be utilised. Certainty and consistency must be
mainstays of sentencing policy, however these can be achieved in more progressive
and innovative ways than is currently practised.
Restorative justice principles are not yet officially recognised in the white-collar
sentencing arena in the UK, although some practices have developed that encompass
restorative ideals3
. Placing the victim at the centre of the criminal justice system
1
Hough, M. and Ashworth, A. (1996), ‘Sentencing and the climate of opinion’, Crim. L.R.,
776
2
Where already one-third of fraud and white-collar offenders are sentenced to prison
alternatives. United States Sentencing Commission, (2009), ‘Alternative sentencing in the
Federal Criminal Justice System’, 11
http:// www.ussc.gov/general/20090206_Alternatives.pdf accessed 24 August 2009
3
Braithwaite, in explaining the origins of his advocacy of restorative justice, argues that he
discovered very early on in his career that the regulation of corporate crime in many countries
was quite restorative, due to various reasons including efficiency, high cost of trials and
corporate capture of government. He was so convinced by the potential for this breed of
justice that he changed his ideological position and began to see his life’s work as making
street crime enforcement more akin to corporate crime enforcement, rather than vice versa.
Braithwaite, J. (2002), ‘Restorative Justice and Responsive Regulation’, Oxford: Oxford
University Press, 16

6
(CJS) and ensuring restoration and reparation are being pursued by the UK
government as major goals as part of an overall criminal justice strategy.4
Restorative Justice (RJ) has been described by Braithwaite5
as ‘the jazz of justice’6
and its principles may be applied at any stage of the CJS. This paper will aim to show
that they should be used as an alternative to excessive penal sentences in white-collar
fraud, and perhaps, more generally for sentencing of non-violent crimes.
RJ allows for equal justice, respect and concern for offenders, victims and all affected
by an offence. Given that equal respect for the dignity of persons means
empowerment, offenders should be allowed to do more than they are required, and
victims to demand less than they are entitled to. This type of informal justice should
allow offenders to show genorosity and victims to grant mercy.7
Howard Zehr claims a common historical fallacy is to interpret history as progress.8
The rise of public justice at the expense of private justice and an increased
dependancy on imprisonment as punishment are often held up as examples that, as a
society, we are becoming less punitive and more civilised and rational in dispensing
justice and punishment. Many people remain unconvinced by these claims however
and as the concept of RJ becomes more mainstream and accepted, we must continue
to explore its potential. It is intended to build a case here for alternative sentencing in
white-collar fraud. The role of academia is to question the prevailing norms, to
4
‘The Government’s vision is for a Criminal Justice System (CJS) that puts victims at its heart
and in which the public are confident and engaged’.
HM Government (2007), PSA Delivery Agreement 24: ‘Deliver a more effective, transparent
and responsive Criminal Justice System for victims and the public’, London: HMSO, 5; The
Attorney General’s Office (2006), ‘Fraud Review Final Report’, London: HMSO, 231
5
John Braithwaite is arguably the pre-eminent expert in the field of RJ combining immense
research on and practical application of theories regarding indigenous forms of justice,
reintegrative shaming, youth justice, responsive regulation and enforcement pyramids for
white-collar crime. For more see Hoyle, C. and Zedner, L. (2007), ‘Victims, Victimisation,
and Criminal Justice’, in M. Maguire, R. Morgan and R. Reiner (eds.), ‘The Oxford
Handbook of Criminology’, Oxford: Oxford University Press, 483; Newburn T. (2007),
‘Criminology’, Cullompton: Willan Publishing, 763
6
Braithwaite (2002), 10
7
Roche, D. (2001), ‘Restorative Justice and Deliberative Accountability’, Ph.D. diss.,
Australian National University, quoted in Braithwaite (2002), 134
8
Zehr, H. (1990), ‘Changing Lenses: A new focus for crime and justice’, Scottdale, PA:
Herald Press, 97

7
understand the causes of things9
and to evaluate whether any new insights may be
used to advance the state of our laws and practices.
Preliminary issues
(a) Does prison work?
Prison has increasingly been seen as an answer to all of British society’s ills. The
prison population has surged from 40,000 in 1980 to 84,154 at last count.10
However
58% of prisoners reoffend within two years of their release, giving credence to the
belief that prison is little more than an ‘expensive way of making bad people worse’11
.
It appears that society is experiencing diminishing returns from this policy of
incarceration. Robert Reiner concludes that while increased incarceratoin is certainly
one of the factors which has led to the fall in crime in the UK since 199312
the Home
Office admits that for a reduction in crime of 1% the prison population must be
increased by 15%.13
As such, purely from an economic perspective allocating similar
resources into alternative policies including restorative justice, community
regeneration and employment14
may do a better job at reducing crime rates for all
types of offender and offence.
(b) Civil or criminal liability for fraud?
The idea of criminalising the risk-taking that is implicit in commercial life is beyond
the scope of this essay. Criminal trials involving allegations of recklessness rather
9
Rerum cognoscere causas being the particularly appropriate motto of the London School of
Economics and Political Science
10
Ministry of Justice National Offender Management Service, ‘Prison Population &
Accommodation Briefing’, 14/08/09
11
Home Office (1990a), White Paper ‘Crime, Justice, and Protecting the Public’, Cm. 965,
Home Office
12
Or 1995 depending on whether you rely on official police statistics or the British crime
survey
13
Reiner, R. (2007), ‘Law and Order - An Honest Citizen’s Guide to Crime and Control’,
Cambridge: Polity, 160
14
For more on this see Spelman, W. (2005), ‘Jobs or jails? The crime drop in Texas,’ Journal
of Policy Analysis and Management, 24, 133-165;

8
than outright fraud or theft are assured to be lengthy, expensive and uncertain as to
their outcomes.
Restorative justice and criminal sanctions are by no means mutually exclusive15
, but I
do intend to take a look at some lower-level sanctions of a civil nature as part of a
regulatory pyramid embracing Braithwaite’s responsive regulation model. While this
paper will suggest increasingly restorative interventions in cases of fraud, it is almost
universally acknowledged that restorative justice is not a panacea. It would be unwise
to abandon traditional methods of deterrance totally because in some cases restorative
justice will repeatedly fail. Escalating to more traditional forms of justice may be
necessary depending on how restorative the offender is proving.16
(c) Individual vs. Corporate Liability
This paper will focus on individual, rather than corporate fraud liability – it is
notoriously difficult to pin moral culpability on a corporation, or to expect one to
issue an effective apology since corporations have ‘no soul to damn, no body to
kick’.17
However, that is not to say that restorative justice principles cannot be applied to
corportate regulation. Khanna18
and Coffee19
both validly question the necessity for
corporate criminal liability, citing the efficiencies gained in terms of cost to the state,
lower standards of proof and the ability to enforce payment of restitution by
corporations to victims, all of which are available through civil remedies. Meeks also
make a convincing argument for the reform of this area of the law citing the damage
15
For instance there are numerous examples in restorative justice literature of it being used in
the event of exceedingly serious crimes including murder, racist offences, and even with
death row inmates. There is limited research to show that restorative processes work better at
reducing recidivism the more serious the offence: Sherman, L.W. and Strang, H. (2007),
‘Restorative Justice, The Evidence’, London: The Smith Institute, 21
16
Braithwaite, (2002), 121
17
Coffee, J. (1981), ‘‘No Soul to Damn: No Body to Kick’: An unscandalized inquiry into
the problem of corporate punishment’, Michigan Law Review, 79(3), 386-459
18
Khanna, V.S. (1996), ‘Corporate criminal liability: what purpose does it serve?’, Harvard
Law Review, 109(7)
19
Coffee (1981)

9
that the stigma of criminal indictment did to the accountancy firm Arthur Andersen in
the wake of their involvement in the Enron scandal.20
It is widely believed that corporate regulation is best achieved through market forces,
with Braithwaite noting that due to their economic, rather than passionate, impulsive
or vengeful rationales, corporations are more succeptable to deterrance than
individuals.21
However, he believes that the moral education function of punishment
is more important than the deterrant function for both individuals and corporations.22
The US is shifting away from post hoc punishment of corporations towards a regime
that prevents crime through corporate regulations and increased criminal liability for
individual white-collar criminals.23
Holding individuals responsible for the crimes they perpetrate under the cloak of a
corporate veil is often the most efficient way to tackle this behaviour. However
criminal sanctions on their own may not be giving us the most perfect justice possible.
Criminal charges for corporations are problematic, as noted above, and even fining or
suing a company through the civil courts can have unintended consequences in terms
of passing on the cost to consumers or making staff redundant.24
So alternatives to
extensive prison sentences and fines will be advocated in this essay with a view to
repairing harm done, while noting society’s contempt for particular behaviour.
20
Meeks, W. (2006), ‘Corporate and White-collar Crime Enforcement: Should regulation and
Rehabilitation Spell and End to Corporate Criminal Liability?’, Colum. J.L. & Soc. Probs. 40,
84
21
Braithwaite, J. (1989), ‘Crime, Shame and Reintegration’, Cambridge: Cambridge
University Press, 141
22
23
Meeks (2006), 80
24
Gobert, J. and Punch, M. (2003), ‘Rethinking Corporate Crime’, London: Butterworths,
233

10
Fraud
(a) The Definition
Fraud has been broadly defined as ‘causing loss or making a gain at the expense of
someone by deception and dishonest means’.25
The 2006 Fraud Act, as summarized
by Ashworth, et al.,26
describes fraud in the following terms:
Dishonestly: making a false representation; failing to disclose information; or
abusing a position, intending to make a gain for any person or cause a loss, or
risk of loss, to another person.
This paper will focus on corporate or white-collar fraud including: high yield
investments, boiler room shares, gold mines, insurance/banking, consumer scams,
corporate fraud, fraudulent trading, employee fraud. Some of the principles and
initiatives outlined below may be appropriate to other forms of fraud and corporate
malfeasance, but that is beyond the scope of this paper.
(b) What Do We Know About The Damage Being Done?
It is acknowledged by the Attorney General’s Fraud Review that there are ‘no reliable
estimates of the cost of fraud to the economy as a whole’. There are ‘numerous
estimates of some types of fraud and some attempts at an overall measurement’,
however the picture is still incomplete due to the twin problems of unreported and
unrecognised frauds.27
Home Office figures state that sanction detection rate (i.e. clear-up rates) for fraud
and forgery for 2007/08 was 31%.28
This implies that 31% of frauds recorded by the
25
Fraud Review (2006), 2
26
Ashworth, A. et al. (2009), ‘Advice to the Sentencing Guidelines Council: Sentencing for
Fraud Offences’, 42
available at http://www.sentencing-guidelines.gov.uk/advice/index.html#sentencing-fraud
27
28
Kershaw, C., Nicholas, S. and Walker, A. (2008), ‘Crime in England and Wales 2007/08’,

11
police result in some sanction. However this is just the tip of the iceberg. Robert
Reiner, in a detailed study of the crime measurement regime in the UK (focusing
primarily on police recorded statistics and the British Crime Survey), asserts that only
5.5% of total crimes are cleared up by the police29
and shows that the police record
only 24.3% of total crime that is believed to occur.30
Thus, Reiner summates, ‘the officially recorded figures for levels of crime, and for
identified offenders, relate to only a very small proportion of all crimes known about,
and a fortiori, crimes committed’.31
White-collar fraud logically follows this pattern
and is perhaps even more difficult to measure as the British Crime Survey does not
take into account any business crime whatsoever.
The disparity in estimated figures for the cost of fraud to the UK is startling.
According to KPMG, fraud has cost the UK economy over £630 million in the first
six months of 2009.32
If this trend continues, as they believe it will, 2009 will see a
record value year for fraud, eclipsing 1995’s figure of £1.2 billion. The National
Fraud Strategic Authority (Now the National Fraud Authority)33
states that fraud costs
the UK exchequer £14 billion annualy!34
Based on the same ACPO report the Fraud
Advisory Panel, in its 2007 annual review, declared the cost of fraud to the exchequer
to be ‘at least’ £20 billion!35
187 available at:
http://uk.sitestat.com/homeoffice/rds/s?rds.hosb0708pdf&ns_type=pdf&ns_url=[http://www.
homeoffice.gov.uk/rds/pdfs08/hosb0708.pdf] accessed 25 August 2009
29
Reiner (2007), 54
30
Barclay, G. and Tavares, C. (1999), ‘Digest 4: Information on the Criminal Justice System
in England and Wales’, London: Home Office, 29
31
Reiner (2007), 55
32
KPMG Fraud Barometer, (July 2009), available at:
http://www.kpmg.co.uk/news/detail.cfm?pr=3541 accessed 24 August 2009
33
Implemented April 2009. See NFA Business Plan 2009-10, May 2009, 6
34
Figures based on Association of Chief Police Officers’ 2007 Report: ‘The Nature, Extent
and Economic Impact of Fraud in the UK’, led by Michael Levi. Available at:
http://www.northeastfraudforum.co.uk/documents/ACPO%20Fraud%20Report%20Feb%202
007.pdf accessed 25 August 2009
35
Fraud Advisory Panel, 2007 Annual Review, 6

12
(c) Current UK White-collar Fraud Sentencing Trends
Despite the obvious gravity of fraud, there is little encouragement for major police
anti-fraud initiatives.36
There has been a decline of one third in the number of fraud
officers in the UK since 199137
and police key performance indicators exclude fraud
(except for the City of London Police). The Fraud Advisory Panel has recently
highlighted ‘a lack of willingness by police forces to accept reports of fraud outright’
due to a lack of capacity, or perhaps a lack of motivation to pursue a time consuming
and costly case which will bring no direct benefit to the officers or force in question.38
The UK government has established myriad agencies to deal with corporate crime,
white-collar crime and fraud, each with varying objectives, strategies and resources
including:
The Serious Fraud Office;
The National Fraud Authority, (part of the Attorney General’s Office);
The Metropolitan Police – Sterling Initiative;
The Serious Organised Crime Agency and
The Crown Prosecution Service – Fraud Prosecution
The Serious Fraud Office (SFO) regularly releases information on the cases that it
chooses to pursue, using the common law offence of conspiracy to defraud as a key
prosecution tool. This year the first Serious Crime Prevention Order was issued under
the Serious Crime Act 2007. The Fraud Act 2006 defined fraud for the first time.
The number of fraud and forgery cases being pursued has remained relatively stable
over the last 11 years since figures have been available with 19,899 cases taken in
2007 from a high of 20,203 in 1999 and a low of 16,930 in 1997.39
As is widely
noted, the frauds of the poor are more readily detected as well as more likely to be
36
id at lxxviii ; Levi, M. (2009), ‘Suite revenge? The shaping of folk devils and moral panics
about white-collar crimes’, Brit. J. Criminol. 2009, 49(1), 62
37
Levi, M. ‘The Phantom Capitalists: The Organisation and Control of Long-Firm Fraud’,
Introduction and Post-script to Rev. Ed. 2008, Aldershot: Ashgate, at xxxi
38
Fraud Advisory Panel, (2007) ‘9th
Annual Review 2006-07’, 6 available at:
http://www.fraudadvisorypanel.org/newsite/pdf_show.php?id=62 accessed 25 August 2009
39
Fraud Advisory Panel (2007), 22

13
prosecuted,40
so it is reasonable to presume that the vast majority of frauds prosecuted
are for blue-collar offences such as benefit fraud, etc.41
In 2007/08 the SFO brought seven cases to trial involving 25 defendants with a
conviction rate of 61%.42
Fifteen defendants convicted received immediate custodial
sentences ranging from eight months to seven-and-a-half years.43
Two others were
given suspended sentences. The Crown Court fraud workload is estimated at 222
cases per year with the CPS Fraud Prosecution Service bringing approximately 205
cases per year.44
(d) Tariffs
In the United Kingdom’s sentencing tariffs for fraud and other white-collar crimes are
not quite so monumental as in the United States. Courts are taking these crimes
seriously and custodial sentences along with disqualification as a director of a
company, compensation orders, confiscation orders, deprivation and financial
reporting orders and fines are standard in many cases.45
UK judges certainly view
sentencing as a means of deterring future potential fraudsters and the sentences meted
out for fraud, under the Fraud Act 2006, in this jurisdiction carry a maximum of 10
years.46
Related statutory offences carry a maximum of seven years.47
Specific sentencing statistics for white-collar fraud are almost non-existent, with most
figures being combined with revenue fraud, credit card fraud, etc. While precise
40
Croall, H. (2001), ‘Understanding White-collar Crime’, Buckingham: Open University
Press
41
‘Those types of crime that are handled by the police’ get more police attention than crimes
which occur in the private spheres of the commercial world. Braithwaite, J. (1979),
‘Inequality, crime and public policy’, London: Routledge and Kegan Paul, 62
42
Richard Alderman, SFO Director, guest lecture at LSE, 22 January 2009
43
SFO Annual Report 2007-08, 34 available at: http://www.sfo.gov.uk/publications/2007-
2008/ accessed 25 August 2009
44
KPMG Fraud Survey 2005 referenced in Fraud Review (2006), 188
45
Fraud Review (2006), 167; Ashworth, A. et al. (2009), 21
46
Sentencing Guidelines Council, ‘Sentencing for Fraud: Statutory Offences, Consultation
Guideline’, February 2009 available at: http://www.sentencing-
guidelines.gov.uk/docs/consultation_guideline_sentencing_for_fraud_statutory_offences.pdf
accessed 25 August 2009
47
Sentencing Guidelines Council (February 2009), 30

14
breakdowns of sentencing tariffs are difficult to acquire, according to the latest figures
available from the Ministry of Justice the average length of a custodial sentence for
fraud and forgery is 10.0 months.48
Interestingly for the purposes of this paper the
custody rate is now 26.1%, up from 21.3% in 1997.49
Between 2000 and 2005 the average custodial sentence for persons convicted in SFO
cases was 31.7 months; half of those convicted received sentences of three years or
less. Out of the 53 cases in which convictions were obtained, the average sentence of
the most severely sentenced person per case was 37.7 months imprisonment.50
(e) Purpose of Sentencing Fraud
Deterrence, incapacitation, rehabilitation, desert and reparation are the mainstream
overlapping and complementary rationales behind any sentencing regime.51
The
Criminal Justice Act 2003 sets out five purposes of sentencing generally for the UK:
punishment of offenders, reduction of crime (including its reduction by deterrence),
reform and rehabilitation of offenders, protection of the public and reparation by
offenders to persons affected by their offences. 52
The UK currently treats all frauds in the same way. This is perhaps an equitable
position to take but, some of the crimes being grouped together are dissimilar,
particularly in terms of dangerousness of offenders and their ability to make amends
and rejoin society without generating large levels of public fear (public outcry is
perhaps inevitable and will be examined in more detail below). Alternative sentences
are already in use in the United States for many white-collar fraud offenders.53
For
48
Ministry of Justice (2009), Sentencing statistics 2007, England and Wales, available at:
http://www.justice.gov.uk/publications/sentencingannual.htm accessed 25 August 2009
49
Ministry of Justice (2009), 22
50
Levi, M. (2006), ‘Sentencing Frauds: A Review’, 11 available at:
http://www.cf.ac.uk/socsi/resources/Levi_GFR_Sentencing_Fraud.pdf accessed 25 August
2009
51
Fraud Review (2006), 227; Ashworth, A. ‘Sentencing’ in Maguire et al (2007), 992-998;
Newburn (2007), 516-538
52
Criminal Justice Act 2003, Part 12 Section 142
53
‘Federal sentencing courts have used [Alternative Sanctions] over the years, primarily for
fraud and white-collar offences…For the appropriate offenders, alternatives to incarceration
can provide a substitute for costly incarceration … [providing] those offenders opportunities

15
these reasons this paper will be examining alternative attitudes and approaches to
white-collar fraud.
The 2003 Act does not clarify how sentencers should balance the differing sentencing
priorities which may lead to inconsistency and inequity in fraud sentencing since it is
suggested that white-collar fraud and benefit fraud are (already) treated very
differently.54
Whether or not this is true is unimportant for the purposes of this paper.
Certainly there is evidence of a lack of emphasis on reform and rehabilitation of
offenders of all types (of fraud and much more generally in the Criminal Justice
System) and these attitudes will be explored below.
Attitudes to Fraud
(a) Perceived Public Attitudes
The public ambivilance towards white-collar fruad appears to be over.55
In the UK
75% of people think that the average custodial sentence is insufficient to deter a
fraudster.56
Levi believes that a certain attitude is taken to (long firm) fraud, because it is not seen
as a signal crime57
– something that evokes and symbolises wider problems in
society58
, for example grafitti. Levi states that long firm fraud is seen by the
authorities as a risk to be pragmatically managed, rather than as a threat to be
emotionally feared.59
by diverting them from prison (or reducing time spent in prison) and into programs providing
the life skills and treatment necessary to become law-abiding and productive members of
society’. US Sentencing Commission (2009), 22
54
55
Holtfreter, K., Van Slyke, S., Bratton, J., Gertz, M. (2008), ‘Public Perceptions of White-
Collar Crime and Punishment’, Journal of Criminal Justice 36, 57
56
BDO Stoy Hayward, Annual Survey 2006, 8 available at
http://www.bdo.com.au/__data/assets/pdf_file/0020/11819/fraudtrack-survey-2006.pdf
accessed 25 August 2009
57
Levi, M. (2008), ‘The Phantom Capitalists: The Organisation and Control of Long-Firm
Fraud’, (Rev. Ed.), Aldershot: Ashgate, xiv
58
See Innes, M. (2004) “Signal Crimes and Signal Disorders: Notes on Deviance as
Communicative Action”, British Journal of Sociology, 55(3), 335-355.
59
Levi (2008), xiv

16
There are indications that this may be changing. The recent high profile indictments
in the United States of Bernard Madoff and Allen Stanford among others, have
pushed fraud to the forefront of the public conscience. In fact corporate malfeasance
has arguably never had such a high profile.
However, ‘real criminals’, Levi states, are those who we see as not providing us with
any worthwhile or valuable services. Part of a fraudster’s craft is appearing to be like
us, otherwise he/she won’t succeed in gaining our trust and subsequently our money.
Thus fraudsters are really ‘folk devils in disguise’, chamelians that make it harder to
categorise them and damn them without ambiguity.60
With these trends in mind, it is important to ask whether we are currently dealing with
these types of cases appropriately. The current economic downturn is having a clear
effect on populist punitivism for economic crimes, as evidenced by the increased
prominance of reporting of these types of cases,61
and this in turn is threatening to
feed into the sentencing regime. The Fraud Review found no public or government
appetite for wholesale decriminalisation of fraud. In fact the report argues that public
confidence may be enhanced by more severe penalties for more harmful offences.62
It may be that politicians and the media are reacting to a punitiveness that is only a
superficial, reactionary response to the wrongs that have clearly been perpetrated.
Many studies show63
that the general public is less punitive than is generally
supposed, particularly when asked to evaluate sentencing for individual cases, rather
than for a general class of crime, as well as favouring treatment, rehabilitation, justice
and fairness over lengthy incarceration.64
Surely a victim giving a considered opinion
would prefer a sentence that goes some way towards repairing harm done, restoring
them, if at all possible, to the position they were in before the offence occurred? This
60
Levi (2009), 48-67
61
Levi (2009), 57
62
63
See Braithwaite (2002), 148
64
Umbreit, M. (1989), ‘Crime Victims Seeking Fairness, not revenge: Toward Restorative
Justice’, Federal Probation 53(3)

17
is one of the main reasons that the social movement for restorative justice has moved
from seeing victims of crime as potential sources of resistence, to tangible sources of
support.65
(b) The Media Effect on Fear and Punitiveness
Reiner66
agrees with Gerbner67
that the media can exaggerage the public alarm about
law and order, generating support for repressive solutions to crime problems. This
‘cultivation analysis’ theory views the media as a threat to democracy; fearful people
are more dependent, more easily manipulated and controlled, more susceptible to
deceptively simple, strong, tough measures and hard-line postures – both political and
religious.68
The media emphasise crime as the product of individual choice and free-floating evil,
diverting attention away from any links to social structure or culture.69
Media
campaigns stigmatising and shaming investment managers, bankers and regulators
perpetuate a sense of ‘us vs. them’. Law and order becomes a zero-sum game between
good and evil, the poor vs. the rich, those who suffer vs. those who inflict pain with
reckless abandon, making compassion, understanding or forgiveness impossible.
(c) Moral Panics and the Politicisation of Crime-control
Cohen wrote about ‘moral panics’ and ‘folk devils’ in the 1970s, referring to the mods
and rockers who were asserting a brand of liberty to which ‘mainstream society’ did
not feel they should be entitled and so deemed the behaviour deviant due to the
65
Braithwaite (2002), 148. Even so, victims’ groups such as Victim Support in the UK still
do not give whole-hearted support to RJ as they see it as imposing unwanted responsibilities
on victims, as well as not being of universal application and utility to all the victims they
represent. See further, Crawford and Newburn (2003), 54
66
Reiner, R., ‘Media-made Criminality: The representation of crime in the mass media’ in
Maguire et al (2007), 302
67
Gerbner, G. (1970), ‘Cultural Indicators: The Case of Violence in Television Drama’,
Annals of the American Academy of Political and Social Science, 338(1): 69-81
68
Reiner (n65), 321
69
See generally Sasson, T. (1995), ‘Crime Talk: How Citizens Construct A Social Problem’,
New York: Aldine De Gruyter

18
perceived disruption to peaceful British seaside bank holidays.70
Public resentment of
the mods and rockers was illicited by media, bureaucratic, cultural, ideological,
economic and personal interests that happened to coincide.
There are five key elements/stages in a moral panic:
1. Something or someone is defined as a threat to values or interests;
2. This threat is depicted in an easily recognisable form by the media;
3. There is a rapid build up of public concern;
4. There is a response from the authorities or opinion-makers and
5. The panic recedes or results in social changes.71
Levi points out that many rogue traders are not seen as seriously threatening the
economic and/or moral fabric of society as their actions, even if morally and legally
dubious, are often seen as being part and parcel of the proper functioning of
capitalism.72
However moral panics about corporate greed can be sparked off if the
actions result in health threats, such as in the cases of Chinese milk in 2008 and
Mattel toys in 2007.73
Furthermore when corporate crimes become embodied in
visible and known persons (e.g. prominent and ‘successful’ business persons being
convicted), there can be a media outcry and moral panic as society is seen to be
changing and becoming less moral and these moral cracks are showing through.74
Moral panics can result in ‘symbolic crusades’ for legislation and mandatory
sentencing.75
However allowing the whim of public opinion to shape a sentencing
regime which must be informed by rational objectives leading to reasoned, consistent
outcomes is not desirable, least of all in the current punitive climate.76
70
Cohen, S. (1972), ‘Folk Devils and Moral Panics’, London: Granada Publishing Ltd.
71
Thompson, K. (1998), ‘Moral Panics’, London: Routledge, cited in Newburn (2007), 95
72
Levi (2009), 49
73
Levi (2009), 51
74
Levi (2009), 49
75
Levi, (2009), 55
76
As occurred in the aftermath of the Jamie Bulger murder in 1993. Hough and Ashworth
[(1996), 80] refer to the significant increase in the use of imprisonment in 1993, with the
prison population rising by almost 7,000 following a fall in 1992. A new, tougher Criminal
Justice Act did not come into force until the autumn of that year so it is suggested that ‘judges
and magistrates believed that the climate of opinion was changing, and attempted to reflect it
to some degree’.

19
Reiner blames our current retributive culture on the politicisation of law and order.77
He charts how a new ‘second-order’ consensus has emerged since the 1990s between
the main UK political parties that ‘prison works’78
and that ‘tough on crime’ policies
must be pursued, to the neglect of ‘the causes of crime’,79
the second half of the now
famous Tony Blair soundbyte.
According to Reiner, there are five underlying assumptions to this crime control
consensus: (1) Crime is Public Enemy No. 1, (2) Individual not social responsibility
for crime, (3) Foregrounding victims versus offenders, (4) Crime control works and
(5) High crime society is normalised.80
But, Levi argues, moral panics over economics can destabilise the markets and the
wider economy and this recognition can discipline official reactions to certain white-
collar crimes leading authorities to take a ‘risk-management’ approach to these
crimes.81
Fostering too much fear undermines perceptions of the competence of
politicians, police and security services and the personal careers of leaders. This
reputational threat creates an internal elite tension between reassurance and alarmist
policing. This can also inhibit retributivist responses to fraud giving authorities a
willingness to treat business crimes as issues for compensation (restorative justice)
rather than for punishment (retributive justice).82
Finally few proposed increases in
the governance of business are seen as cost-free by business or government with
politicians anxious not to stifle enterprise and to economise on regulatory staffing.83
Despite this it can be politically expedient to condemn, rather than understand,84
regardless of the long-run detrimental consequences. The government’s stated
77
Reiner (2007), 122
78
Howard, M. (1993), Home Secretary speech at Conservative Party conference
79
Labour Party manifesto (1997), ‘Tough on crime, tough on the causes of crime’, London:
Labour Party
80
Reiner (2007), 124-128
81
Levi (2009), 49
82
Levi, (2009), 56
83
Levi, (2009), 55-56
84
John Major in an interview with the Mail on Sunday on 21 February 1993, quoted in Reiner
(2007), 125: ‘Society needs to condemn a little more and understand a little less’

20
objective regarding fraud is to create an anti-fraud culture throughout society using
effective actions to deter, investigate, sanction, and provide redress for victims.85
Conspicuous by its absence is any mention of rehabilitation or reintegration of
offenders as a means of affecting a change in fruad culture.
Providing meaningful support and redress for victims is, of course, vital. There are,
however, alternatives to punitive sentencing, particularly involving restorative justice,
that allow for this and have been proven to actually enhance victim satisfaction at the
end of the process. A meta analysis by Latimer et al. of 22 studies examining 35
restorative justice programmes shows victims who participated in restorative
processes were ‘significantly more satisfied’ than those who participated in the
traditional justice system.86
(d) Voices for Change and Forgiveness
‘To forgive is not just to be altruistic. It is the best form of self-interest…you can come
out on the other side a better person…than one being consumed with anger and
hate…lock[ed] in a state of victimhood…dependant on the perpetrator’
- Archbishop Desmond Tutu 87
Forgiveness is a major theme in restorative justice literature, reintegrating an offender
back into society and allowing victims move on.88
It is a complex emotion that can be
a ‘liberating route out of victimhood’,89
but one that loses all effect once it is coerced
in any way as it is ‘a power held by the victimized, not a right to be claimed’.90
85
As recommended by the Fraud Review (2006), 41
86
Latimer, J., Dowden, C. and Muise, D. (2001), ‘The Effectiveness of Restorative Justice
Practices: A Meta-analysis’, Ottawa, Ontario: Department of Justice Canada
87
Chairman of South Africa’s Truth and Reconciliation Commission. Quoted at
http://www.theforgivenessproject.com/stories/desmond-tutu accessed 24 August 2009
88
The concept has been utilised by both Lincoln and Mandella to bring their peoples
together. Braithwaite, J. (2002), 5
89
Cantacuzino, M, Founder of The Forgiveness Project:
http://www.theforgivenessproject.com/project/marina/ accessed 24 August 2009
90
Minnow, M. cited in Roche, D. (2003), ‘Accountability and Restorative Justice’, Oxford:
Clarendon.

21
While forgiveness is not something that is directly pursued by the restorative justice
movement, processes can be designed to indirectly realise this by providing spaces
and opportunities for victims to discover how to bring themselves to forgive.91
In order for this to happen genuine remorse and an apology must be forthcoming from
the offender. ‘[A] Combination of shame at and repentance by the offender is a more
powerful affirmation of the criminal law than one-sided moralizing. A shaming
cermony followed later by a forgiveness and repentance cermenony more potently
builds commitment to the law than a shaming cermony alone’.92
There have been further voices for alternative and more ethical approaches to the
conduct of business and sentencing coming recently from The Pope93
and various
international agencies such as the Council of Europe.94
Thus there are moral imperatives in addition to the cold, hard economic incentives to
lessen the stigma, avoid excessive criminality and rehabilitate and reintegrate
corporate offenders allowing them to continue to use their knowledge and expertise to
steer the economy, this time using better guides and moral compasses. Restorative
justice and reintegrative shaming provide a window of opportunity for this as will be
discussed in the next session.
91
92
93
Benedict XVI (2009), ‘Caritas in veritate’, http://www.vatican.va—hf_ben-
xvi_enc_20090629_caritas-in-veritate_en.html accessed 24 August 2009
94
Council of Europe Committee of Ministers, Recommendation No. R (88) 18

22
Restorative Justice
Restorative justice has been hailed as possibly ‘the most influential development in
crime control in the past decade’,95
yet the question of what precisely restorative
justice is continues to vex legal scholars. It has been described as ‘a practice in
search of a theory’,96
or ‘the accretion of actual experience in working successfully
with particular crime problems’,97
more often defined in terms of what it is not,
rather than what it is.98
Whether it is seen as ‘alternative punishment’ or ‘an
alternative to punishment’,99
it usually involves bringing together victims, offenders
and their communities of care (relatives, friends, neighbours) to discuss the offence in
order to move forward, ‘make amends’ and repair, as far as possible, the harm done.
This is achieved through the utilisation of various forms of victim-offender
reconciliation programs from Family Group Conferencing to Court-based restitutive
& reparative measures, as outlined in McCold’s Restorative Practices Typology (Fig.
1 Below):100
95
Crawford, A. and Newburn, T. (2003), ‘Youth Offending and Restorative Justice:
Implementing Reform in Youth Justice’, Cullompton: Willan Publishing, 19
96
Crawford and Newburn (2003), 19
97
Marshall, T. (1999) ‘Restorative Justice: An Overview’, 7. Available at:
www.homeoffice.gov.uk/rds/pdfs/occ-resjus.pdf accessed 24 August 2009
98
‘Restorative justice is most commonly defined by what it is an alternative to’, Braithwaite
(2002), 10
99
Duff, R.A. (1992), ‘Alternatives to Punishments or Alternative Punishments’, in W. Cragg
(ed.) ‘Retributivism and its Critics’, Stuttgart: F. Steiner Verlag, 44-48
100
McCold, P. (2000), ‘Towards a Mid-range Theory of Restorative Criminal Justice: A
Reply to the Maximalist Model’, Contemporary Justice Review, 3(4), 357-414.
For more on restorative initiatives see Van Ness, D. and Strong, K.H. (1997), ‘Restoring
Justice’, Cincinnati, OH: Anderson Publishing Co., 158-59; Crawford and Newburn (2003);
Newburn (2007)

23
The origins of RJ lie in ‘pre-modern’ forms of justice101
which have flourished once
again in the last 20 years, particularly in countries with indiginous populations such as
the Maori in New Zealand and aboriginal Inuit people in Canada. Braithwaite sees
restorative justice as a major development in human thought, grounded in traditions of
justice from the ancient Arab, Greek, and Roman civilizations.102
He claims that RJ
has been ‘the dominant model of criminal justice throughout most of human history
for perhaps all the world’s peoples’.103
101
102
103
VICTIM
REPARATION
COMMUNITIES OF
CARE
RECONCILIATION
OFFENDER RESPONSIBILITY
RESTORATIVE
JUSTICE
Victim Support
Circles
Community
conferencing
Family Group
conferencing
Peace
Circles
Therapeutic
Communities
Victimless
Conferences
Victim-offender
mediation
Truth and
reconciliation
commissions
Victim services
Compensation
schemes
Offender family
services
Family-centred
social work
Youth aid panels
Community
service
Reparative
Boards
Victim awareness programmes
Partly
Restorative
Mostly
Restorative
Fully
Restorative
Fig. 1 McCold’s
Restorative Practices

24
However, restorative practices fell out of fashion as leaders began to secure their
power through retribution on wayward or potentially usurporous subjects. The
Norman Conquest of Europe transformed crime from being a a personal wrong
against an individual to a matter of fealty to and felony against the King.104
According
to Foucault (1977)105
‘the tug of war between restorative Christian teachings and
insecure rulers who sought to signify their power through vivid displays of inscribing
their power on the bodies of felons increasingly favoured horrific corporal
punishment in early modern times’.
Restorative justice is often viewed as a critique of conventional criminal justice, a
‘unifying banner’106
for various strands of potential reform for the criminal justice
system which emerged from the 1970s. Braithwaite sees it as encompassing ‘making
amends’, reconciliation, peacemaking, redress, relational justice, transformative
justice, republican justice and feminist thinking about crime.107
Howard Zehr goes further and talks about ‘changing lenses’ in the criminal justice
system, switching from the old retributive paradigm to one that is restorative.108
He
believes that the source of many of the failures of the system lies in the lens through
which we view crime and justice. That lens is a construction of reality, but not the
only possible one. Rather than seeing crime as a violation of the state, we should see
it as a violation of people and relationships, creating obligations to make things right.
Nils Christie’s article ‘Conflicts as Property’ which has been described by Braithwaite
as ‘the most influential text of the restorative tradition’,109
discusses how conflicts
have progressively been taken away from the parties involved and appropriated by
others – lawyers, prosecutors, etc. Christie states that in this situation the victim of
crime is the loser, reduced to a bit-part player (if even) on the margins of justice
proceedings. Society is also losing out on ‘opportunities for norm-clarification’.
Ordinary citizens are no longer participating in discussing the rights and wrongs of
104
105
quoted in Braithwaite (2002), 7
106
107
108
Zehr (1990)
109
Braithwaite, 11

25
certain behaviours, and lacking input into what, if anything, should be done about
allegedly ‘deviant’ acts. 110
One of the more universally accepted definitions of restorative justice is that of Tony
Marshall:111
‘Restorative justice is a process whereby parties with a stake in a particular offence
come together to resolve collectively how to deal with the aftermath of the offence and
its implications for the future’
Dignan does not believe that a definition is particularly important as it can restrict the
scope of restorative justice to criminal justice and overlook less formal procedures
and contexts112
. He argues that it focuses too much on process when the outcome is
more important. Is it, he asks, ‘an end in itself, irrespective of any outcome…or is it a
means to some other end?’113
Braithwaite in addressing the development of standards
for restorative justice finds that ‘open-textured’ standards that allow for cultural
differences, draw upon human rights standards and yet denounce bad practice are
possible and desirable.114
Van Ness and Strong see the main aspects of restorative justice to be encounter,
restitution, reintegration and participation.115
Dignan sees three main features:
endeavouring to put right the harms caused by the offence itself, seeking to balance
the accountability of the offender with the needs of those harmed by the offence and
encouraging the involvement of the main participants in determining responses to the
offence.116
Von Hirsh, Ashworth and Shearing propose a more limited ‘making
amends’ model for restorative justice, which does not focus on maximising crime
110
Newburn (2007), 745
111
From Marshall, T.F. (1996), ‘The Evolution of Restorative Justice in Britain’, European
Journal on Criminal Policy & Research 4(4), 37
112
Dignan, J. (2005), ‘Understanding Victims and Restorative Justice’, Maidenhead: Open
University Press
113
Dignan (2005), 5
114
Braithwaite, J. quoted in McEvoy, K., Mika, H., Hudson, B., ‘Practice, Performance and
Prospects for Restorative Justice’, Brit. J. Criminol. (2002) 42, 472
115
Van Ness and Strong (1997)
116
Dignan (2005)

26
control effects, reducing fear of crime or healing or taking back the wrong, but to
make amends through victim/offender dialogue.117
The current UK government
approach to restorative justice involves 3-Rs: restoration, reintegration and
responsibility.
Johnstone makes the valid point that it is impossible to ‘un-punch or un-stab’
someone’,118
but this is not necessarily so for financial crimes where meaningful
remorse and restitution are far more possible if a restorative, rather than punitive
approach is taken to offending. However it must not be forgotten that any outcome,
including a prison sentence, can be restorative if it is agreed to and considered
appropriate by all parties.119
The empowerment of and repairing of relationships
between the main parties to an offence is a major goal of restorative justice.120
There are numerous criticisms of RJ which are beyond the scope of this paper,121
but
should be noted:
a. Failure to deter and perception as a ‘soft option’;
b. Only applicable to small minority of victims whose offenders are apprehended,
charged, willing to admit guilt;122
c. Using victims to benefit offenders, imposing unwanted responsibilities and
burdens on them;123
d. Inability to deal with persistent offenders;
e. Low levels of victim participation due to lack of time, fear, or failure of
communication of information about a planned session;124
f. Erosion of legal rights through lack of procedural safeguards;
117
Von Hirsch A., Ashworth A., Shearing,C. ‘Restorative Justice: A 'Making Amends'
Model’, in Von Hirsch, A. & Ashworth, A. (2005), ‘Proportionate sentencing: exploring the
principles’, Oxford; New York : Oxford University Press, Ch. 8
118
Johnstone, G. (2002), ‘Restorative Justice: Ideas, Values, Debates’, Cullompton: Willan
Publishing, 104
119
Morris, A., ‘Critiquing The Critiques, A Brief Response to Critics of Restorative Justice’,
Brit. J. Criminol. (2002) 42, 599
120
Johnstone (2002), 141
121
For an in-depth examination and rebuttal of these see: Morris (2002), 596-615
122
123
Described as ‘Victim Prostitution’ by Ashworth, A. (2000), ‘Victims’ Rights, Defendants’
Rights and Criminal Procedure, in A. Crawford and J. Goodey (eds.), ‘Integrating a Victim
Perspective within Criminal Justice: International Debates’’, Brookfield, VT: Ashgate
124
Hoyle, C. and Zedner, L. (2007) in M. Maguire et al (2007), 485

27
g. Discriminatory outcomes as affluent communities more able to afford to develop
restorative alternatives;
h. Encouragement of vigilantism and
i. Lacks legitimacy of conventional CJS due to differing values
However ‘it is one thing to point out that after ten years of full implementation,125
restorative justice has failed to resolve pervasive justice system problems…It is quite
another to blame such longstanding problems on restorative and community
justice’.126
(a) Restorative Justice in a Corporate Context: The Strength of Weak Sanctions in
Deterrance
Fisse and Braithwaite127
write about hard and soft targets for restorative justice
initiatives in corporate crime. Hard targets are individuals who cannot be detered by
maximum legal penalties, soft targets can be. Often a small number of people may be
involved in perpetrating or plotting a fraud, but a much larger number have the power
to prevent it (coming from within a firm, or up- or down-stream from a particular
transaction). They concluded that the way to deter crime was not to seek to deter the
criminal who benefits most from the crime, but to look for a softer target who has
preventative capabilities. This means moving up an organisation and conferencing
executives until a soft target is found who can be moved by reson or deterred by fear
of a personal sense of shame and thus is willing to undertake responsive internal
reforms necessary to stamp out any malpractice. This can often take place at a sub-
criminal level of responsibility using corporate private justice systems.
Essentially this means holding ‘the axe of law enforcement’ over an organisation’s
head, requiring it (in association with an independent law firm) to produce a self-
investigation report identifying all the persons and procedures responsible for wrong-
125
Although even this is exaggerating the extent of its prevalence in the overall CJS
126
Schiff, M. and Bazemore, G. (2001), ‘Dangers and Opportunities of Restorative
Community Justice’, in G. Bazemore and M. Schiff (eds.), ‘Restorative Community Justice:
Repairing Harm and Transforming Communities’, Cincinnati, OH: Anderson Pub., 309
127
Fisse, B. and Braithwaite, J. (1993), ‘Corporations, Crime and Accountability’
Cambridge: Cambridge University Press

28
doing and proposing remedies, potentially externally or internally enforceable.128
This
can involve the sacking of individuals involved and the initiation of compensation
regimes for victims of the fraud, as well as potential restorative initiatives involving
responsible individuals.
(b) Accountability in Restorative Justice
A punitivism on the part of victims may have potential to turn a restorative
conference into a lynch mob, with certain examples in Australia where police turn a
blind eye to indigenous communities who kill, or more often, corporally punish
offenders.129
This type of deference to ‘cultural relativity’ is a reason why writers
such as Declan Roche have called for accountability and judicial oversight for
restorative justice processes.130
It is vital that restorative processes respect the human
rights131
of all parties involved, and this can be achieved through the appointment of a
strong, impartial mediator/facilitator who has the respect of all the parties involved in
the process (often a restorative conference, which we will explore below). Agreed
outcomes in terms of reparations and formulas for moving forward after the offence
are vital. Unfair, overly-punitive ‘agreements’ must not be imposed on offenders by
victims looking for their ‘pound of flesh’. In many cases judges are empowered to
sign-off on agreements reached at restorative conferences, ensuring some sense of
proportionality remains, while not stifling the creative nature of these processes.
Upper limits based on human rights and lower limits based on public safety must be
adhered to in restorative meetings.132
Braithwaite believes a solution to the risk of a
victims flying ‘into rages of abuse’ is to reserve the absolute right of offenders to
walk out of the restorative conference and try their hand in a court of law. 133
(c) The Role of Culture and Society
128
129
130
Roche (2003)
131
Such as in the European Convention on Human Rights: Art. 3: Prohibition on inhuman or
degrading treatment or punishment; Art. 6(1): Right to fair and impartial hearing; A6(2):
Presumption of innocence; Art. 13: Right to an effective remedy, etc.
132
Roche (2003), 216-21
133

29
As noted above, it can be convenient to see the flaws in the banking and finance
arenas as the product of individual ‘bad apples’ or ‘rogue traders’. However there can
be deeper social and cultural forces at play in industries and individual corporations
which can influence an individual’s behavoiur.134
Extreme business practices, when
they go wrong, can cause popular resentment which translates the normally implicit
into something reprehensible; risk becomes negligence and innovation becomes
greed.135
It is therefore vital to determine whether any steps can be taken to instill
more responsibility and regard for others, outside the ‘egoistic individual’ which
neoliberalism and unregulated capital markets is wont to create.136
Fisse and Braithwaite argue that the first step in tackling corporate crime is to create a
culture in which it is not tolerated. To achieve this they emphasise the importance of
informal processes of shaming unwanted conduct and praising of exemplary
behaviour137
. Paternoster & Simpson (1996) agree that strenghtening the business
ethics of corporate managers, possibly through some form of ‘moral education’, may
be an effective corporate crime-control strategy as their research shows moral
inhibitions to be a ‘particularly strong bulwark against corporate crime’.138
The
existence of corporate social responsibility schemes (though these can sometimes be
dismissed as public relations excercises in themselves) can, if encouraged from the
top, create a culture within a corporation in which certain behaviour is unwelcome
and hence reintegrative shaming is a viable option.
The interplay between public opinion, the political realm, public policy and penal
practice are complex. But they are always conditioned by the type of society in which
they occur’.139
134
Paternoser, R. and Simpson, S. (1996), ‘Sanction Threats and Appeals to Morality:
Testing a Rational Choice Model of Corporate Crime’, Law & Society Review, 30 (3), 568
135
Levi (2009), 62
136
Reiner (2007), 18
137
Fisse, B. and Braithwaite, J. (1983), ‘The impact of Publicity on Corporate Offenders’,
Albany: State University of New York Press, 246
138
Paternoser and Simpson (1996), 580
139
Cavadino, M. and Dignan, J. (2006), ‘Penal systems: a comparative approach’, London;
SAGE, 31

30
Our society is, as we have seen above, quite adept at shaming bad behaviour, but
increasingly (following the demise of the rehabilitative ideal since the early 1980s)
tends to ignore the idea of reintegration back ‘into the fold’ of the community
following a criminal conviction. The only real efforts made at this relate to restorative
initiatives in youth justice, leading to the conclusion that society has given up on
those deviant old dogs as unable to learn new tricks.
The claim that restorative justice only works well only in rural closely-knit societies,
rather than modern industrialised anonymous metropolises, is a regular critique due to
the lack of communitarianism and interdependancy (as well as cultural homogeneity)
necessary for shaming, restoration and reintegration in the latter.140
Braithwaite cites
Japan as a communitarian culture that invokes mutual help and trust and personal
obligations to others in a community of concern.141
Involving the community in the administration of justice is not an easy task. As
Marshall advises ‘neighbourhoods (and for our sake corporations and industries)
differ in their capacities [resources, education, time, ability, willingness] to support
potential offenders in their midst.142
The concept of reintegrative shaming and its use of communitarianism and
interdependancy concepts which, it is asserted, leads to overall lower rates of
criminality, particularly recidivism, will be discussed in greater depth below.
(d) Shame and Reintegration
Braithwaite in his groundbreaking book, Crime, Shame and Reintegration,143
examines the conditions under which certain forms of social reaction can produce
responses that enable offenders to become law-abiding, respectable citizens.144
He
achieves this through what he describes as ‘Reintegrative Shaming’ which promotes
140
Braithwaite (1989), 84-97
141
142
Marshall, T. (1999), 28
143
Braithwaite (1989)
144
Newburn (2007), 219

31
acknowledgement of shame by offenders and leads to moralising qualities145
which
hence reducing recidivism and overall crime.
His defines this process as:
‘Shaming which is followed by efforts to reintegrate the offender back into the
community of law-abiding or respectible citizens through words or gestures of
forgiveness or ceremonies to decertify the offender as deviant’ 146
Shaming and reintegration (as opposed to stigmatisation) occur sequentially, but
before deviance becomes a ‘master status’. Described by Braithwaite as a family
model of the criminal process,147
it is shaming that labels the act as evil while striving
to preserve the identity of the offender as essentially good. It focuses on evil deeds
rather than evil persons in the Christian tradition of ‘hate the sin and love the sinner’
and as a family would when routinely scolding a child within a ‘continuum of love’.
148
This form of ‘de-labeling’ is ideally achieved in a communitarian and interdependent
society and can involve a simple smile expressing forgiveness and love to formal
ceremonies de-certifying the offender, within the community, as deviant.
‘Community’ does not have to correspond to any particular physical or geographical
entity. For conferencing each person has their own ‘community of care’ centered on
themselves including relatives, supporters and significant others.149
The involvement
of victims and the wider community in the re-integration effort makes this a truly
restorative event.
145
A slight revision of the theory relating to how shame-related emotions can effect
reintegration which in turn influences subsequent compliance was made in Braithwaite, J. and
Braithwaite, V. (2001), ‘Shame, shame Management and Regulation’, in Ahmed, E., Harris,
N., Braithwaite, J. and Braithwaite, V. (eds.), ‘Shame Management through Reintegration’,
Cambridge: Cambridge University Press, 3-69
146
147
148
Griffiths, J. (1970), ‘Ideology in Criminal Procedure or A Third ‘Model’ of the criminal
Process’, Yale Law Journal, 79, 376
149
Marshall, (1999), 29

32
Briathwaite recognised the potential for this theory to deal with white-collar crime
due to the adverse impact of publicity (shaming) on corporate offenders. He saw that
by remorslessly punishing those with a desire to comply and by forbidding sincerely
motivated managers a second chance we alienate them, fail to build organisational (or
individual) commitment to reform and foster subcultures of regulatory resistance.150
Self-regulation of corporations using internal shame-based sanctions is what he
believed to be the most effective use of reintegration in a corporate setting. Shame is
used to internalise a commitment to the rules instead of punishment being used to tip
the balance of rational calculation in favour of compliance. Although routine non-
punitiveness and routine control by communitarian disapproval must be underwritten
by occasional state shame-based punishment in which stigmatization is minimized’.151
Many studies appear to have found that shame has a large deterrent effect on the
intention to commit corporate offences including Paternoster and Simpson (1996),
Elis and Simpson (1995), and Simpson (1992).152
Levi conducted an interesting study in 1994 regarding the perceived severity of
sentences from the point of view of corporate executives. Imprisonment is, not
surprisingly, the most feared outcome, with the potential shame of media publicity
and being made a social outcast ranking further down the list.153
He questions whether
the sentiments expressed may change over time and particularly post-arrest as often
white-collar criminals, similar to most criminals, never even contemplate being
apprehended.
A recent study suggests that reintegrative shaming is pertinant to individuals who are
accused of tax evasion and is key to determining their long-term future compliance
with the law. 154
They rely on a study of reminder letters about requirements for small
150
Braithwaite, (1989), 131
151
152
Figures from: Murphy, K. and Harris, N. (2007), ‘Shaming, Shame and recidivism: a test
of Reintegrative shaming theory in the white-collar crime context’, Brit. J. Criminol., 47(6),
904
153
Levi (2006), 29
154
Murphy and Harris (2007), 910

33
businesses to lodge quarterly business activiety statements for tax purposes155
to
suggest a ‘responsive’ means of bringing reintegrative shaming to the masses.
Enforcement agencies should change their communication strategies with offenders
from a stigmatising punitive style, to one which respects invididuals and their privacy
and confidentiality rights, explains and justifies enforcement decisions and allows
opportunities to contest decisions and reach agreements.156
The above has clear implications for the use of reintegrative shameing as part of a
restorative justice approach to white-collar fraud and I will put forward some
examples below.
Whither White-Collar Fraud?
(a) Spiraling Sentences and Deterrence
Historically the penalties imposed on individuals convicted of serious criminal
offences have included death, corporal punishment and imprisonment. The main aim
of these sentences is often to deter others from following in the offender’s footsteps
by ensuring a punishment outweighs the perceived benefits of a crime. This presumes,
to a greater or lesser extent, a rational choice model of offending based on classical
and economic criminological theories. Since capital and corporal punishment have
been abolished in the UK’157
imprisonment and fines have become the default
sanction for fraud cases.158
155
Wenzel, M. (2006), ‘A Letter from the Tax Office: Compliance Effects of Informational
and Interpersonal Justice’, Social Justice Research, 19: 345-64
156
Murphy and Harris (2007), 911
157
Although it should be noted that Chinese courts still regularly hand out suspended death
sentences for fraud cases involving large sums or a perceived threat to social order. Recently
two executives found guilty of defrauding investors out of $127m were executed. ‘China
Executes Two for Defrauding Investors’, Associated Press, (New York August 06 2009)
http://www.law.com/jsp/law/international/LawArticleIntl.jsp?id=1202432826454&src=EMC-
Email&et=editorial&bu=Law.com&pt=LAWCOM%20Newswire%20Update&cn=LAWCO
M_NewswireUpdate_20090806&kw=China%20Executes%20Two%20for%20Defrauding%2
0Investors accessed 24 August 2009:
158
Gobert and Punch (2003), 221

34
Symbolic sentencing often appears to be the order of the day in contemporary white-
collar crime and fraud cases. Bernie Ebbers was sentenced to 25 years in jail in July
2005 for orchestrating a $11 billion accounting fraud as C.E.O. of WorldCom. He was
convicted of securities fraud, conspiracy and seven counts of filing false reports with
regulators, 159
In June 2009 Bernard Madoff was sentenced to 150 years in prison for a ponzi
scheme which defrauded investors of $68 billion160
. He admitted his crimes to his
family, entered a guilty plea at trial and apologised to his victims before sentencing.
There was loud cheering in court as his sentence was announced.161
In fact the sentence received by Madoff is not the longest for this type of white-collar
fraud,162
with US courts particularly punitive, handing down sentences of up to 845
years.163
The judiciary frequently refer to symbolism as an important aspect of sentencing. In
the Madoff case Justice Chin cited three reasons for the importance of symbolism in
his sentencing – retribution, deterrance and victim satisfaction.164
In a recent UK case,
on imposing a six year custodial sentence the judge referred to his ‘public duty to
deter not only [the defendant] but others from defrauding others’.165
159
‘WorldCom Chief Is Given 25 Years for Huge Fraud’, New York Times, (New York July
14 2005) http://www.nytimes.com/2005/07/14/business/14ebbers.html?_r=1 accessed 24
August 2009
160
United States v. Bernard L. Madoff, 09 Cr. 213 (DC)
161
‘Fraudster Madoff gets 150 years’, BBC News, (London 29 June 2009)
http://news.bbc.co.uk/1/hi/business/8124838.stm accessed 24 August 2009
162
‘The 10 longest white-collar prison sentences’, The Times, (London, 29 June 2009)
http://timesbusiness.typepad.com/money_weblog/2009/06/the-10-longest-sentences-for-
whitecollar-crime.html accessed 24 August 2009
163
‘It Could Have Been Worse For Madoff’, Forbes Online, (New York 29 June 2009)
http://www.forbes.com/2009/06/24/bernie-madoff-prison-sentence-business-beltway-
madoff.html accessed 24 August 2009
164
Madoff Sentencing Transcript at 48:
http://www.usdoj.gov/usao/nys/madoff/20090629sentencingtranscriptcorrected.pdf accessed
24 August 2009
165
Financial consultant defrauded British ‘expats’, Serious Fraud Office, (London 23 June
2009) http://www.sfo.gov.uk/news/prout/pr_626.asp?id=626 accessed 24 August 2009

35
But one must question the efficacy of continually imposing sentences of such
magnitude. Justice Chin maintains that fraudsters must know that ‘they will be caught
and that they will be punished to the fullest extent of the law’. However, as I have
shown above, it appears from most statistical data that a very low percentage of fraud
is ever discovered, let alone investigated and successfully prosecuted. Bernard
Madoff was not deterred by the 25 year sentence meted out to Bernie Ebbers, nor the
24 years imposed on Jeffrey Skilling.166
Madoff handed himself in only when he
knew the game was up, and arguably to receive a more leniant sentence due to
cooperation.
(b) Fines
Levi notes that fraudsters are willing to go to prison for periods of time if the rewards
on their release are worth it.167
Thus the tradition of confiscation and compensation,
rather than prison, for fraud offenders has potential if general deterrence is, as it is
often held out to be, the main aim of the criminal justice system. The prospect of a life
of relative austerity, moving out of their comfortable neighbourhood, having to use
public transport, moving their children to public schools and taking fewer holidays
may have a greater impact on rational decision-making behaviour of potential white-
collar offenders.
Fines have clear benefits in that they are relatively cost-free to administer and save on
the expense of holding an inmate in prison,168
which has been estimated to cost
approximately £40,000 per year. 169
A major argument against the use of fines for white-collar criminals is that they tend
to reflect the gravity of the breach of the law, rather than the outcome of the breach of
166
United States v. Jeffrey K. Skilling
167
Levi (2006), 28
168
169
Prison Service Journal, No. 165, May 2006, available at:
http://www.hmprisonservice.gov.uk/resourcecentre/prisonservicejournal/index.asp?id=5066,3
124,11,3148,0,0. Accessed 24 August 2009; ‘The real cost of prison’, The Guardian, (London
28 June 2008)
http://www.guardian.co.uk/commentisfree/2008/jul/28/justice.prisonsandprobation accessed
24 August 2009

36
the law. Generally low level fines hit small firms and individual fraudsters harder than
larger offenders.170
For example in 1988 British Petroleum was fined £750,000 for
safety violations in a year it made a profit of £1,391,000, the fine amounting to
approximately one-half of one percent of BP’s after-tax profit.171
However, fines
alone are not sufficient. Replacing criminal charges with fines would amount to a
‘morally neutral tax on law breaking’ which Brathwaite sees as resulting in a game of
economic trade-offs where cheating will be rife.172
However by focussing on
restitution for victims and genuinely tailoring fines based on the ability of offenders
(be they corporate or individual) to pay (as recommended in the Fraud Review
Report),173
this should not be the case. Karpoff and Lott174
find that the ‘reputational
cost of corporate fraud is large and constitutes most of the cost incurred by firms
accused or convicted of fraud’ and that this should be taken into account when
sentencing.
Whatever the utility that harsh penal and financial sentences may have for restitution
and just deserts, they do little to prevent crime or protect the public from offenders as
the apprehension and conviction rates for corporate criminals are extremely low.
Furthermore, the consistently high incidence of fraud in the UK clearly shows that
these sentences alone are not an adequate deterrent.
Braithwaite notes the ‘perceptual deterrence’ literature of Paternoster and Iovanni175
supporting the many studies which have shown that improved detection makes more
difference as a potential deterrant than increased punishment that might or might not
be delivered by stronger laws or harsher sentencing.176
170
Tombs, S. and Whyte, D. (2007b), ‘Safety Crimes’, Cullopton: Willan
171
172
173
‘Regulatory sanctions should change the behaviour of the offender, ensure there is no
financial benefit from non-compliance, be responsive (appropriate to the offenders and the
regulatory issue), be proportionate to the nature of the offence and the harm caused, aim to
restore the harm caused and aim to deter future non-compliance.’ Fraud Review (2006), 163
174
Karpoff, J. and Lott, J. (1993), ‘The Reputational Penalty Firms Bear from Committing
Criminal Fraud’, Journal of Law and Ecomomics, 36, 758-9
175
Paternoster, R. and Iovanni, L. (1986), ‘The Deterrent Threat of Perceived Severity: A Re-
examination’, Social Forces, 64: 751-77
176
Braithwaite, J. (2009), ‘Restorative Justice for Banks through Negative Licensing’, Brit. J.
Criminol., 49(4), 439-450

37
It is precisely because the opportunities for fraud are so huge and the chances of being
caught are so small that it occurs with such regularity. The Attorney General’s Fraud
Report 2006 states as major objectives the proper recording of all known and reported
fraud, the increased reporting of known but unreported fraud and increased exposure
and better estimating of undiscovered fraud.177
Much lower and middle ranking fraud against individuals and small businesses are
largely uninvestigated, although it is hoped that by adding fraud to the National
Policing Plan, increasing police cabability, increasing civilian investigative capacity
and public/private partnerships can improve the figures.178
The focus on community
involvement indicates that restorative justice and reintegrative methods could be used
detect and sentence fraud cases.
(c) Zero-Tolerance
Ideally, therefore, adopting a ‘zero-tolerance’179
approach to white-collar fraud in
order to increase the likelihood of apprehending and deterring all potential fruadsters
would be the correct path to take? Not so. While creating a society that is intolerant
and ashamed of crime may lead to its decrease, restorative practices are more
productive at inducing the remorse and shamefulness that prevents crime, and
averting the humiliation that causes it, than zero-tolerance.180
Despite the inability of prosecutors to take on large numbers of cases, selecting the 10
cases per year that send out the widest ripples through the clout a guilty verdict may
deliver to the authorities to settle thousands of other matters on the strength of a
precedent, seems a more resaonable approach.181
Furthermore, if white-collar fraud is
177
178
179
‘An incoherent, uncivil and dangerous criminal policy’. See Dixon, D. (1999), ‘Beyond
zero tolerance’. Paper presented to 3rd
National Outlook Symposium on Crime in Australia,
Canberra: Australian Institute of Criminology; Cunneen, C. (1999), ‘Zero-tolerance policing
and the experience of New York City’, Current Issues in Criminal Justice, 10, 299-313
180
Braithwaite, J. and Drahos, P. (2002), ‘Zero Tolerance, Naming and Shaming: Is there a
Case for it with Crimes of the Powerful?’ The Australian and New Zealand Journal of
Criminology 35(3), 269-288
181
Braithwaite and Drahos (2002), 271

38
as prevelant as the above figures imply, then imprisoning 5-10% (or more) of the
business population is unaffordable and moreover, socially undesirable.
(d) The Role of Morals in Offending
McPhearson concludes that ‘there are too many subtle opportunities to cheat, and too
few police officers, to make it plausible that the only effective motives supporting
moral behaviour are the prospects of financial or criminal penalties for immorality’.182
This implies that a person’s moral beliefs can set certain behaviour as off-limits,
regardless of utility calculations. An ability to justify an action to one’s self as
morally acceptable may then lead to cost/benefit calculations. The context and
circumstances of a firm, including a culture of cheating may spur-on an individual to
cross the line of legality. 183
Thus in a rational choice model of white-collar fraud,
moral considerations can be a more effective method of self-control due to their
determination as to whether more rational cost/benefit factors enter the criminality
equation.184
Restorative Justice explicitly engages the conscience and morality of
offenders by encouraging them to understand the implications of their actions on the
lives of their victims.
(e) What works?
‘Not only must Justice be done; it must also be seen to be done’.185
Public anger and the need of politicians and the legal classes to be ‘seen’ to be doing
something may weigh against non-penal sentences for what are serious crimes, but
one must look at ‘what works’ – what is efficient and cost-effective and what
achieves favourable outcomes for the victim, the offender and the community at large.
182
McPhearson, M. S. (1984), ‘Limits on Self-Seeking: The Role of Morality in Economic
Life’, in D. C. Colander (ed.), ‘Neoclassical Political Economy: the Analysis of Rent Seeking
and DUP Activities’. Cambridge, MA: Ballinger Publishing Co.
183
Paternoser and Simpson (1996), 554-556
184
Paternoser and Simpson (1996), 579-580
185
R v Sussex Justices, Ex parte McCarthy [1924] 1 KB 256, [1923] All ER 233, per Lord
Hewart CJ

39
The ‘what works’ movement in criminology was led by Sherman et al in the 1990s186
following a mandate from the US Congress to ‘employ rigorous and scientifically
recognized standards and methodologies’ in evaluating crime prevention programmes.
In crude terms it is simply the search for evidence-based interventions. It involves
identifying hot spots, high-risk spaces, times and groups of people, and targeting
smartly atuned preventive and rehabilitative measures at the hot spots187
. In the UK
this rationale was adopted by the New Labour government who used it to focus not
only on criminal activity, but also on ‘anti-social’ behaviour’ and ‘poor parenting’.188
Braithwaite, however, pours scorn on the idea that strengthening the criminal law by
expanding its scope, increasing police powers, easing burdens of proof and raising
penalties will reduce crime.189
He maintains that it is incorrect, in light of a financial
crisis, to insist that regulation must be tightened and that better laws on hedge funds
and derivatives are needed. In fact he equates these arguments to inferring that
‘tighter regulation of gas chambers would have fixed the Third Reich’.190
Levi notes that neither probability nor severity is a ‘continuous variable affecting
deterrence’ and that for some high-status offenders ‘the process is the punishment’.
Conviction or even bad publicity alone, irrespective of sentence level can deter.191
Braithwaite talks about the ‘deterance trap’,192
a fault that many corporate crime
policy makers fall into which involves basing penalties on expected rational utility
models presuming that a large enough penalty will deter the average white-collar
offender. But this could bankrupt a corporation or individual and result in collateral
damage to innocent workers, creditors and local communities.
186
Sherman, L., Gottfredson, D., Mackenzie, D., Eck, J., Reuter, P. and Bushway, S. (1997),
‘Preventing Crime: What Works, What Doesn’t, What’s Promising: A Report to the United
States Congress’. Washington, DC: National Institute of Justice
187
Sherman et al (1997), 440
188
189
190
191
Levi (2006), 6
192

40
The way forward, accoding to Braithwaite is to replace narrow, formal, and strongly
punitive responsibility with broad, informal, weak sanctions, targeting gatekeepers
and others (for example auditors, underwriters, insurers, ethics committes) who don’t
necessarily benefit from a transaction, but facilitate it, are depended on by the
offender for the fraud, or are expected to detect fraud.193
Many informal sanctions will
deter more than few formally punitive sanctions.194
Braithwaite and Pateroster & Simpson concede that traditional deterrence cannot be
abandoned under a restorative justice system as sometimes restorative justice and
appeals to morals and ethics will repeatedly fail. Penalties should be responsive to
how restorative the offender is proving to be.195
With that in mind, it must be
emphasised that a single meeting or conference is unlikely to change an individual’s
perspectives instantly. Restoration must be a continuous process.196
It could be argued that in defining ‘restoration’ for offenders it must not involve
reducing reoffending. Rather than considering outcomes only, the process of holding
them accountable, accepting responsibility, involving them in the exercise that leads
to a decision about how to deal with their offending and thereby allowing them to feel
respected and fairly treated is equally as important. Allowing them to apologise, make
amends and address the root causes of their offending could quite plausably lead to
less reoffending.197
As noted above the lack of convictions in cases of white-collar fraud is not
encouraging. However as the cases currently focussed on can involve large numbers
of victims and more often than not numerous offenders and accomplices, there is a
real opportunity to invoke restorative justice techniques. Victim participation should
also be higher than in other cases as victims should have no particular fear of meeting
their offender (other than their embarrassment at being duped).
The Alternatives:
193
Braithwaite (2002), 113; Paternoser and Simpson (1996), 577
194
195
196
Roche, D. (2003), ‘Gluttons for Restorative Justice’, Economy and Society, 32(4), 641
197
Morris (2002), 606

41
This final section will propose a number of varied initiatives involving the use of
restorative justice and reintegrative shaming. Some are modified versions of current
means of sanctioning white-collar fraud and deviance which could be applied without
unreasonable inconvenience to the CJS as it stands. Others may require more
substantial resources and a more serious reconfiguration of notions of justice and
success, beyond the traditional emphasis upon offender reform to include the
satisfaction of all the parties involved with regard to procedural and substantive
justice, the impact upon the various parties and the nature of restoration and
reintegration.198
(a) Plea Bargains / ‘Discussions’
There is an opportunity to include restorative processes as part of the newly
established plea discussion agreements. While plea bargains are a prominent feature
of US law where over 98% of criminal defendants plead guilty (compared with 66%
in the UK199
), the relatively recent case of R v Goodyear200
allowed for the first time
in the UK a formal process by which a defendant could seek a formal indication of
sentence in open court. Much consultation was undertaken in the aftermath of this
decision by the Attorney General’s Office and in May 2009 guidelines were released
on plea ‘discussions’ in cases of serious or complex fraud.201
Aside from agreed evidence and factual basis for the plea, a sentence
recommendation, as agreed mutually between prosecution and defence, would be
submitted to the court. This would cover custodial or community penalties,
198
199
Figures from The Attorney General's Office (April 2008), ‘The Introduction of a Plea
Negotiation Framework for Fraud Cases in England and Wales: a Consultation’, 9 available
at:
http://www.attorneygeneral.gov.uk/Fraud%20Review/The%20Introduction%20of%20a%20P
lea%20Negotiation%20Framework%20for%20Fraud%20Cases%20in%20England%20and%
20Wales-%20a%20Consultation.pdf accessed 25 August 2009
200
R v Goodyear (Karl) [2005] EWCA Crim 888
201
The Attorney General (May 2009), “Guidelines on Plea Discussions in Cases of Serious
or Complex Fraud’ Available at:
http://www.attorneygeneral.gov.uk/attachments/AG_s%20Guidelines%20on%20Plea%20Dis
cussions%20in%20Cases%20of%20Serious%20or%20Complex%20Fraud%20doc.pdf
accessed on 25 August 2009

42
compensation orders, fines, costs, confiscation orders, Financial Reporting Orders,
disqualification, Serious Crime Prevention Orders and any other voluntary steps
already taken by the defendant to mitigate his/her offence.202
The judge retains
discretion to accept, amend or reject the recommendations.
This plea framework is for use in fraud cases only, fraud being defined as ‘any
financial, fiscal or commercial misconduct or corruption which is contrary to the
criminal law’.203
The framework recognises the potential savings in resources from
avoiding full ‘paper-heavy’ fraud trails. Another consideration in bringing forward
this initiative is the positive effect a quick and efficient trial can have on fraud
victims, some of whom can be suicide risks due to their feelings of foolishness,
embarrassment and responsibility at having been taken in by a fraudulant act which
has had such detrimental effects on them and their family. An early guilty plea avoids
the ordeal of victim witnesses being necessitated to testify in court as well as allowing
for early restitution.204
Van Ness & Strong205
point out that victims have an interest in securing a plea that
will maximize the potential restitution ordered and while the interest of the state in
obtaining a quick agreement may be at odds with the victim's interest in restitution,
the two should not be mutually exclusive. In fact restitution may go some way
towards satisfying a prosecutor’s need to punish.
Restorative initiatives may further assist victims who do not have the opportunity to
address their offender in the course of a trail due to the plea bargain (In the course of
a guilty plea there is usually an opportunity for a victim to address the court before
sentencing). Victim-offender mediation in the aftermath of a successful plea
negotiation may allow for a sense of closure. Having already accepted their guilt as a
prerequesite to the plea process, it would not be particularly onerous on the offender
for them to apologise sincerely and engage in some constructive dialogue in person
with those they have offended against, should the victims be prepared to do so.
202
The Attorney General's Office (April 2008), 16
203
The Attorney General (May 2009), 1
204
The Attorney General's Office (April 2008), 19
205
Van Ness and Strong (1997), 148

43
Victim involvement in the process of agreeing a sentence recommendation should not
be ruled out. While there are obvious confidentiality matters regarding the evidence
presented and issues raised during these discussions, as well as the danger of a victim
insisting on a massively disproportionate sentence, these are only minor difficulties
provided the discussions are presided over and over-rideable by a judge.
This would considerably assist a victim in feeling that they are included in the justice
process. In light of the fact that the UK Government’s efforts to make the victim
central to the criminal justice system have been ridiculed of late as a ‘damaging
misrepresentation of reality’ by the Commons Justice Committee, this is particularly
relevent.206
It is important to be aware of the potential for lighter sentences delievered at trial to
undermine the system of plea negotiation207
, but this is no reason not to include
restorative elements as part of sentencing in fraud cases that go to trial. A reasonable
certainty of a discounted tariff as part of plea negotiations should encourage it’s
uptake.
(b) Sentencing Circles
A further criticism of the Commons Justice Committee was that the CPS must be
more neutral than a victims advocate, but rather an ‘independent arbiter’ representing
the public interest.
Establishing a system of sentencing circles for white-collar fraud cases involving
victims, offenders and their respective communities of care would be a way of
amending this. Seeking consensus on sentencing plans that address the concerns of all
206
House of Commons Justice Committee, ‘The Crown Prosecution Service: Gatekeeper of
the Criminal Justice System’, Ninth Report of Session 2008–09, 36 available at
http://www.publications.parliament.uk/pa/cm200809/cmselect/cmjust/186/18602.htm
207
Sentencing Law and Policy - A Member of the Law Professor Blogs Network:
http://sentencing.typepad.com—alternative-sentencing-in-the-federal-criminal-justice-
system.html accessed on 25 August 2009

44
involved, these circles also often involve representatives of the local community208
.
As noted above, however, with the relative transience of those who commit white-
collar fraud as well as the global nature of many of their offences, local community
inclusion may not always be possible or useful.
In the case of white-collar fraud the offender’s community of care may consist of
family members, work colleagues or, if applicable, neighbours and friends from the
local community.
Although primarily used in aboriginal communities, a variant of the sentencing circles
concept is transferrable to fraud-cases. Unlike other restorative justice initiatives,
these circles are not diversionary, but are run in partnership with the established CJS,
replacing or adding to the sentencing regime. It is usually at the discretion of the
presiding judge whether or not to refer sentencing to a panel depending, among other
factors, on the motivation of the offender.209
Similarly the judge ultimately imposes
the sanctions and the agreed sentence may merely be advisory. The circles can
include justice professionals representing the court (and in the absence of eligible
community representatives, the public interest) as well as outside professionals who
may be called in to advise the ‘inner circle’.210
(c) Community Sentences
208
209
Lilles, H. (2001), ‘Circle Sentencing: Part of the Restorative Justice Continuum’ in
Morris, A. and Maxwell, G. (eds.), ‘Restorative Justice for Juveniles, Oxford: Hart
Publishing, 177
210
Stuart, B. (1996), ‘Guiding Principles for Designing Peacemaking Circles’ in Schiff, M.
(eds.), ‘Restorative Community Justice’, Cincinnati, OH: Anderson Publishing ,194

45
It has been shown that offenders who embark on community sentencing (including
employment focussed programmes) are 35% less likely to re-offend.211
There can be a
danger in advocating community sentences to corporations in that those actually
responsible for the offence may be high-up executives who delegate the task lower-
level staff, thereby avoiding any individual involvement. This is yet another reason to
prefer individual responsibility to corporate responsibility in white-collar fraud cases.
Focusing too much on community orders may lead the state to rely on them as a
means for co-opting private industry or individuals into undertaking projects the state
is unwilling or reluctant to pay for.212
However, ensuring that the costs relating to any
community sentences are not disproprtionate to the offence may alleviate this.
Gobert and Punch (2003) worry that allowing corporations or individuals to undertake
community service may enhance the offender’s reputation. They cite the example of
the endowment of a university chair or the building of a hospital, library or
community centre, whereby an individual’s name/brand would be associated with the
initiative (possibly due to its being named after the individual) long after the illegal
activity that led to the community service had been forgotten. Free publicity may
result for the individual or corporation who would forever be associated with
responsible ethical practices and public-spiritedness.213
This is precisely the type of result that we should encourage as a society if we are
serious about reintegrative shaming. Allowing for a certain amount of controlled
public humiliation and dressing-down during the time of indictment, prosecution, and
restorative conferences, showing offenders the good that can be done by their works
and allowing them to get credit for it and become permanently immersed in the
community is an ideal means of reintegration into society. Victims may even reach
the point of requesting that offenders be released on bail or given more lenient
sentences in order to (continue their) work.214
(d) Serious Crime Prevention Orders Plus
211
McGuire, M. (1995), ‘What Works: Reducing Reoffending: Guidelines from Research and
Practice’, Chichester: Wiley
212
213
214
Van Ness and Strong (1997), 147

46
The Anti-Social Behaviour Order (ASBO) appears to have been adopted for dealing
with white-collar crime in the UK through the use of the Serious Crime Prevention
Order, established under the Serious Crime Act 2007 as a civil order that will
‘enhance and tailor anti-fraud sanctions’.215
They have been described as a ‘high class
ASBO’ by the Director of the SFO.216
However these orders could be extended to
allow for restorative responses to certain types of errant behaviour or ‘sharp practice’
which has detrimental effects on the credibility of the whole banking and investment
system. Instead of jailing or rendering an offender disqualified from working in a
certain capacity for an extended amount of time, work could be allocated to an
offender allowing them to utilise their expertise, under supervision, in a local
community centre, sports club or other local amenity/cause. Depending on the success
of the work programme the offender may have his/her record cleared allowing them
to once again work in their chosen fields. As with conventional ASBOs, they would
be backed up by criminal sanctions in the event of their breach.
(e) Deferred Prosecution Agreements
Deferred Prosecution Agreements (DPAs) in the United States were established by
the Department of Justice in the aftermath of the collapse of Arthur Andersen. They
aim to protect innocent third parties from the collatoral damage that the collapse of a
corporation can do and are used to ensure the co-operation of corporate entities in the
prosecution of individual employees.217
They are also a means by which regulators
can essentially force certain conditions and best-practice reforms on corporations with
the threat of prosecution hanging over any non-compliance. Corporations have very
little leverege to negotiate the terms of DPAs as they fear the possible corporate death
sentence that an indictment, let alone a successful conviction can bring. Thus DPAs
can be enforced even with relatively little ‘hard’ evidence of misfeasance.218
215
National Fraud Strategy 2009, 26 available at:
http://www.attorneygeneral.gov.uk/attachments/NFSA_STRATEGY_AW_Web.pdf accessed
25 August 2009
216
Richard Alderman, SFO Director, guest lecture at LSE, 22 January 2009
217
They appear to follow the logic of Fisse and Braithwaite (1983) in seeking a ‘soft target’
in a corporation.
218
Meeks (2006), 105

47
There are some concerns regarding inequality of arms, consistency and judicial
oversight of DPAs,219
but (as can be the case with restorative agreements following a
conference) unfair, disproportionate or unduly onerous terms can be over-ruled by a
judge.
Recently the SFO has pledged ‘wherever possible’ to fine or seek civil remedies,
rather than engage the criminal law, for firms that voluntarily self-report bribery and
corruption issues.220
There is no reason why this could not apply for instances of
suspected fraud involving corporate or individual offenders. Corporations could
report on and assist in the prosecution of deviant employees, avoiding a criminal
sanction for the corporation, in a similar manner to Deferred Prosecution Agreements
in the US. For cases of fraud outside a corporation ‘whistle-blowers’ (close business
associates or family members) may be offered some form of immunity or greatly
reduced sentence should their co-operation lead to the prosecution of the leading
actor.
(f) The Annual General Meeting as a Restorative Conference
Disregarding, for a moment, any instance of fraud, AGMs often resemble a badly run
restorative conference. Masses of disgruntled investors and shareholders take on the
role of victims as directors (a smaller group of individuals sitting together at a top
table, as defendants in a witness box) take on the role of offenders.
The victims/investors act as a community of care for each other assisting in shaming
and berating the directors/offenders. This scenario can often regress into a shouting
match with a discredited (in the eyes of the ‘victims’) chairman of the board
attempting to control the vitriol coming from the floor.
219
Meeks (2006), 107
220
‘SFO unveils plans for US-style negotiations’, The Times, (London 22 July 2009)
available at: http://business.timesonline.co.uk/tol/business/law/article6722383.ece accessed
24 August 2009

48
When things go drastically wrong, as in the current global recession or when
allegations of fraud emerge, management can be ‘hung, drawn and quartered’ in
public at these meetings, at times being pelted with eggs and publicly humiliated and
stigmatised by the very people who put them under immense pressure to do whatever
was necessary to continually increase profits in the first place.221
Directors will depart
less likely to be concerned with the long-term welfare of shareholders in the future
and shareholders will leave, with the same impression they began with, of directors as
inhuman oligarchs concerned with nothing but lining their own pockets and of
capitalism as the ‘legitimate racket of the ruling class’.222
Taking a restorative and reintegrative approach to AGMs may in fact increase the
satisfaction for all parties involved, regardless of whether the outcomes differ and
despite the limited overall potential of this initiative which would apply only to public
companies obligated to hold annual general meetings.223
221
‘AIB offers apologies to shareholders and admits bad mistakes’, The Irish Times, (Dublin
May 14 2009), available at:
http://www.irishtimes.com/newspaper/frontpage/2009/0514/1224246463600.html accessed
24 August 2009
222
Quote attributed to Al Capone
223
Companies Act 2006, Chapter 4, Section 336

49
Conclusion
It is vital to approach white-collar fraud in a manner that allows for the reintegration
of offenders back into the community for the benefit of the community. Marking
deviance as unacceptable, while keeping faith in the ethical and moral potential of an
individual can foster a culture of forgiveness in society and potentially create an
ethical culture in business. Using restorative methods for low level regulatory
offences through to serious criminal offences is vital if restorative justice is to be
taken seriously by the whole of society.
Restorative justice is not seen as a ‘soft’ option for offenders. Victim involvement (if
possible) is vital, but a restorative process must not be allowed to turn into a lynch
mob. For RJ to reach its full potential it must involve the whole of society making a
concerted effort at changing our lenses in terms of our approach to offending and
offenders.
This will inevitably cause some distress to fraud victims who legitimately expect
(based on our CJS’s current overtly punitive approach to offending) more retributive
sentences. But RJ and the opportunities it creates in cases of corporate fraud for
restitution (both for individual and community victims), as well as the value it places
on restoring offenders and thereby reducing overall crime rates must be emphasised.
Furthermore, research has consistently suggested that it is emotional, rather than
material or monetary restoration that victims seek.224
Politicians and community leaders must ‘develop a credible coalition’225
and step up
to the challenge of implementing and encouraging a change of approach to offenders,
fostering forgiveness and facilitating their genuine reintegration into society.
Garland226
acknowledges a ‘remarkable upsurge of interest’ on the part of academics,
reformers and govt. ministers, but currently restorative justice initiatives ‘play only a
224
Marshall and Merry (1990); Umbreit et al (1994); Strang (2001). Cited in Morris (2002),
604
225
Van Ness and Strong (1997), 158-59
226
Garland, D. (2001), ‘The Culture of Control: Crime and Social Order in Contemporary
Society’, Oxford: Clarendon,169

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