Crime against Banks Fell Sharply in '83, FBI Says; Embezzlement, Fraud Losses Down Nearly 30%

By Lieberman, Robert B. | American Banker, August 13, 1984 | Go to article overview

Crime against Banks Fell Sharply in '83, FBI Says; Embezzlement, Fraud Losses Down Nearly 30%


Lieberman, Robert B., American Banker


WASHINGTON -- The Federal Bureau of Investigation's statistics for 1983 indicate significant reductions in reported crimes against financial institutions.

Reported fraud and embezzlement losses declined nearly 30% last year to about $282 million from $401 million in 1982, according to the statistics recently released by the FBI. About 83% of those crimes were committed by employees of financial institutions and 17% by outsiders, the FBI said.

The FBI's figures also indicated that violent crimes against financial institutions declined and involved fewer fatalities last year than in 1982. Crimes against bank customers using automated teller machines, however, increased.

FBI sources and banking industry observers cited several factors behind the sharp decline in white-collar bank crime.

Some reductions have been made in both internal and external crime, for instance, because financial institutions are becoming increasingly aware of a need to protect themselves by notifying regulators and the FBI of suspicious dealings at their institutions and by taking preventive measures.

Also, the number of bankers enrolling in crime-prevention seminars -- many of which discuss ways to crack down on computer-related fraud -- has increased "tremendously" according to Keith D. Marshall, director of security programs at the Bank Administration Institute.

"Managers are being required to pay more attention to the internal security of financial institutions," said Ronald D. Butler, assistant chief of the FBI's white-collar crime division. Recent successful efforts by federal law enforcement agencies to combat white-collar crime may also be discouraging such incidents, he said.

The FBI is relying more heavily now on notification from regulators and institutions of possible white-collar crime, Mr. Butler said.

That the FBI is playing less of an active role in uncovering such crimes is reflected in the number of investigations of fraud and embezzlement initiated by the agency, which decreased from 9,409 in 1982 to 7,811 in 1983.

However, the FBI had the same number of agents and support staff investigating bank crime last year as it did the year before, Mr. Butler said.

The recent economic upswing has not been a major factor in the decline in bank crimes, one FBI soaurce suggested. Yet bank crime can be heavy in areas where unemployement is high, he said.

Mr. Butler cautioned that the total losses recorded in the FBI's white-collar crime statistics could have been much higher.

As investigations continue into possible illegal activities at several failed banks, including the Penn Square Bank of Oklahoma City, the total dollar value of white-collar crime could reach of exceed 1982 levels, observers say.

A recent House Commerce subcommittee report criticized regulators and law enforcement agencies for not investigating whether many other recent bank failures occurred because of possible criminal dealings. …

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