Table Of Content

Corporate Compliance Crime, Convenience and Control Petter Gottschalk Christopher Hamerton Corporate Compliance · Petter Gottschalk Christopher Hamerton Corporate Compliance Crime, Convenience and Control Petter Gottschalk Christopher Hamerton Department of Leadership School of Economic, and Organizational Behaviour Social and Political Sciences BI Norwegian Business School University of Southampton Oslo, Norway Southampton, UK ISBN 978-3-031-16122-3 ISBN 978-3-031-16123-0 (eBook) https://doi.org/10.1007/978-3-031-16123-0 © The Editor(s) (if applicable) and The Author(s), under exclusive license to Springer Nature Switzerland AG 2022 This work is subject to copyright. All rights are solely and exclusively licensed by the Publisher, whether the whole or part of the material is concerned, specifically the rights of translation, reprinting, reuse of illustrations, recitation, broadcasting, reproduction on microfilms or in any other physical way, and transmission or information storage and retrieval, electronic adaptation, computer software, or by similar or dissimilar methodology now known or hereafter developed. The use of general descriptive names, registered names, trademarks, service marks, etc. in this publication does not imply, even in the absence of a specific statement, that such names are exempt from the relevant protective laws and regulations and therefore free for general use. The publisher, the authors, and the editors are safe to assume that the advice and information in this book are believed to be true and accurate at the date of publication. Neither the publisher nor the authors or the editors give a warranty, expressed or implied, with respect to the material contained herein or for any errors or omissions that may have been made. The publisher remains neutral with regard to jurisdictional claims in published maps and institutional affiliations. This Palgrave Macmillan imprint is published by the registered company Springer Nature Switzerland AG The registered company address is: Gewerbestrasse 11, 6330 Cham, Switzerland Contents 1 Introduction 1 References 8 2 Corporation Conformity and Compliance 15 Research Perspectives on Compliance 16 Legalistic and Formalistic Approaches 21 Compliance Audits and Risk Assessment 23 Fraud Examinations of Compliance Failures 24 Maturity Model for Corporate Compliance 29 References 32 3 The Theory of Convenience and Compliance 37 Individual Convenience Orientations 38 Financial Motive for Executive Deviance 40 Organizational Opportunity for Deviance 43 Personal Willingness for Deviant Behavior 44 Disturbing Offender Crime Convenience 46 Traditional Criminological Perspectives 48 References 49 v vi Contents 4 Lack of Compliance from Convenience 55 Astellas Cultural and Compliance Failings 56 Danske Bank Money Laundering in Estonia 57 Fuji Xerox Customer Fraud in New Zealand 61 Nordea Bank Tax Evasion in Luxembourg 64 Swedbank Money Laundering in Lithuania 68 Telenor in Vimpelcom Uzbekistan Corruption 71 References 72 5 Barriers to Corporate Compliance 75 The Complexity of Rules and Regulations 76 Deficiencies in Compliance Functions 77 Deterioration by Social Disorganization 80 Heroic Status of the Chief Executive 87 Inter-Bank Cooperation Challenges 89 References 96 6 Roles of Compliance Officers 103 Statements by Compliance Violators 104 Survey of Officers in the United States 107 The Yara Corruption Scandal in Libya 108 References 110 7 Restoration of Compliance and Control 113 The Trust Repair at Siemens in Germany 115 Financial Crime Specialists in Compliance 120 References 123 8 Crime Signal Detection Perspectives 127 White-Collar Crime Characteristics 129 Organizational Crime Detection Functions 131 Crime Detection by Whistleblowing 136 Empirical Crime Signal Detections 142 Characteristics of Crime Signal Detection 148 From Crime Convenience to Detection 155 Case Study of Betanien Foundation 157 References 163 Contents vii 9 Change Management for Corporate Recovery 171 Organizational Reconstruction Approaches 172 Recommendations by Fraud Examiners 173 Preventive Measures in the Literature 180 Detective Measures in the Literature 185 Corporate Case Study of Siemens 187 References 188 10 Change Measures for Corporate Control 195 Recommendations in the Literature 197 Investigations by Fraud Examiners 205 Four Change Management Themes 208 Reduction in Crime Convenience 212 References 215 11 Strategies for Wrongdoing Investigation 227 Investigative Fraud Examination 228 Investigation Knowledge Strategy 232 Information Sources Strategy 235 Value Shop Configuration Strategy 240 Computer Systems Strategy 245 Crime Investigation Principles 248 Investigation Maturity Levels 258 Case Study of Gartnerhallen 261 References 264 12 Profiling of Potential Offenders 269 Structural Model of Convenience 270 Profiling Offender Motive 271 Profiling Offender Opportunity 275 Profiling Personal Willingness 278 References 281 Conclusion 287 viii Contents Appendices 291 Bibliography 325 Index 363 List of Figures Fig. 3.1 Structural model of convenience theory 41 Fig. 5.1 Convenience themes in the Norfund case with lack of inter-bank cooperation 95 Fig. 8.1 Receiver knowledge after whistleblowing 157 Fig. 10.1 Illustration of the categorization process conducted by Hals and Sandvik (2019) 210 Fig. 10.2 Recommended change management effects on convenience 213 Fig. 11.1 Knowledge organization of investigation in the value shop 241 Fig. 11.2 Stages of knowledge management systems in white-collar crime investigations 246 Fig. 11.3 Maturity model for internal investigations by fraud examiners 259 Fig. 12.1 Structural model of convenience themes 272 ix List of Tables Table 8.1 Detection of white-collar crime 142 Table 8.2 Comparison of journalist and non-journalist-detected criminals 143 Table 8.3 Financial crime categories by detection sources 144 Table 8.4 Characteristics of stimulus in detection of white-collar crime 152 Table A.1 Sample of reports of investigations by fraud examiners (Investigation reports listed separately in the reference section at the end of this chapter) 291 Table A.2 Investigated organizations and investigating firms 303 Table A.3 Change management recommendations from investigating firms 313 xi