To understand two of the more prominent competing American visions of justice, just look at Superman and Batman. These two iconic superheroes face very different kinds of crime: Superman, the resident alien and adopted son of low-income farmers, finds his chief adversary in the powerful businessman Lex Luthor. Batman, orphaned child of privilege, takes on a rogue’s gallery of lone violent psychopaths.

Batman's method for fighting street crime is relatively mundane for the comic book world; he uses traditional detective techniques, acrobatics and fancy gadgets -- but no superpowers. It's an efficient approach for catching the odd criminal, joker, penguin. But is it possible to combat Lex Luthor -- or any high-charged corporate criminal with money, connections and muscle --without Superman’s powers?  

When it comes to white collar crime, perhaps we've gotten off track by thinking we need a superman to tackle embezzling bankers, ponzi schemers and cunning CEOs who blend in easily among their law-abiding peers. Maybe we'd be best served to take a page from Batman's book. What would it look like if we repurposed the best tactics for targeting street crime to take Wall Street villians?

Putting A Price On It

How much does white collar crime actually cost? In 2004, the Federal Bureau of Investigation and the Association of Certified Fraud Examiners pegged the annual toll of white collar crime as somewhere between $300 and $660 billion. But since many white collar crimes go unreported, and sometimes even the victims don’t know they’ve been scammed, the actual figure could be much larger. Some estimates spiral as high as $1 trillion per year.

“The estimates out there are sort of all over the board, and not very consistent in terms of methodology,” says Mark Cohen, a professor at Vanderbilt Law School who studies, among other things, white collar and corporate crime.

Unfortunately, when trying to examine white collar crime, the roadblocks to cost estimation – lack of data, underreporting, confusion about how exactly to define what constitutes a ‘white collar crime’ – crop up again and again.

But on the other hand, an exact figure might not really be necessary.

“What are numbers going to do for us?” Cohen says. “The key questions are things like, ‘is white collar crime causing significant harm’ and ‘what can be done about it?’”

Stop And Frisk On Wall Street?

In 2012, the New York City Police Department made more than 533,000 “stop-and-frisk” street interrogations that mostly targeted blacks and Latinos. Only about 1 out of every 1,000 stops recovers a weapon. But both the police department and the mayor’s office say the policy works not just in ferreting out illegal guns, but by scaring criminals into leaving weapons at home.

So, if the rate of return doesn’t matter so much as the appearance of a deterrent, why not pursue a similar strategy for corporate crime?  What’s good for the goose in the Bronx should theoretically be good for the gander on Wall Street.

In the wake of the Bernie Madoff scandal, in which the wealth manager swindled an estimated $64.8 billion from clients in the largest Ponzi scheme in history, the U.S. Securities and Exchange Commission voted in 2009 to institute surprise inspections for investment advisers. Investment managers would have to open their books to outside accountants at least once a year to verify that client money was actually still being held safely – since one of the key ingredients in Ponzi schemes like Madoff’s is to use client investments to pay other clients.

But the rule that eventually passed was a scaled-down version of the original proposal from then-SEC chairman Mary Schapiro, who at first wanted 10,000 fund managers to be subject to surprise visits. That number was downsized to 1,600 managers after various executives met with Schapiro and another SEC commissioner, Bloomberg Businessweek pointed out.

It’s unclear what sort of effect the surprise SEC inspections of money managers is having – the inspection results, and any subsequent referrals to the agency’s enforcement division, are non-public, an SEC spokesperson said in an email.

Lead Them Not Into Temptation

In a 2008 paper, University of Arizona public policy professor Neil Vance and then- U of A grad student Brett Trani outlined possible ways reduce white collar crime through what’s known as “situational prevention.”

Situational prevention tactics on the street can manifest in any number of designs. The main goal is reducing the opportunities that people have to commit crime. This can be as simple as putting in more windows and streetlamps in public spaces, thus reducing the number of blind spots and concealed areas. It’s akin to the “broken windows theory” – the idea that by improving the environment of a neighborhood, through removing graffiti, picking up trash and, of course, fixing windows, you create a space that is less conducive to crime.

Situational prevention of white collar crime is not about increasing surveillance of workers, or micro-managing them, Vance and Trani say. The onus is more on designing the organization of a company so that there is less opportunity for workers and officers to behave badly.

For instance, the fraud at Enron could have been avoided, had the Arthur Andersen consultants, who were earning handsome fees from the company, been kept separate from the Arthur Andersen auditors, the pair argues.

“Consider the pressures on a new audit associate if a senior partner from the consulting division assures him/her that it is acceptable to sign off on a fraudulent financial statement,” Vance and Trani wrote. “Rather than wish for more virtuous leaders or different members in an organization, reducing the opportunity for misconduct is more effective in advancing ethical conduct.”

One situational crime prevention tactic might be reinstating the Glass-Steagal Act, which had set up a wall between commercial and investment banks. Thanks to the removal of that wall in the late 1990s, corporate officers may find it all-too-tempting to bet the funds of clients on risky market ventures. (Whether or not the existence of Glass-Steagal would have prevented the recent financial crisis is debatable).

The easier the opportunity, the easier it may be for people to justify a little fraud here or there, the thinking goes.

Psycho Banker, Q’est-ce que c’est?

While criminologists don’t have as good a handle on profiling white collar criminals as they do with drug dealers or rapists, there is some suggestion that the traits that lead to success in business may also be red flags for psychopathy. The guy in the corner office that everyone thinks of as a driven, no-nonsense go-getter could easily be labeled an egocentric, manipulative, and unempathetic by a psychologist.

Criminologist Robert Hare, the creator of the famous “Psychopathy Checklist,” once interviewed 203 corporate professionals, and found that about 4 percent scored at or above the threshold for psychopathy. The prevalence of psychopathy in the general population is thought to be around 1 percent.

Hare cautions against reading too much into his research – it’s not showing that every successful business man is a brooding sociopath. The proportion of psychopaths in financial services could be lower than 4 percent, or higher, depending on how big a group you study and who you look at. But for wary companies, Hare and his colleagues have developed a version of his psychopathy test called the  Business Integrity Scan, or B-Scan, that can spot signs of psychopathy in the workplace.

Scanning potential executives for psychopathic traits might not be too far-fetched of a hiring practice, since a fair amount of corporate crime stems from on high. An analysis of 347 SEC fraud cases between 1998 and 2007 conducted by the Committee of Sponsoring Organizations found that the agency fingered the CEO or the CFO for some level of involvement 89 percent of the time.

"Why wouldn't we want to screen for [psychopathy]?" Hare said, in reference to executives, after a speech in 2002, according to the Canadian Press. "We screen . . . police, teachers. Why not people who are going to handle hundreds of billions of dollars?"

Get ‘Em While They’re Young

On the street, at-risk youth are often targeted for intervention with community programs and and after-school activities. In a similar vein, why not target workers before they enter the workforce, and nip white collar crime in the bud before it starts?

“Whether there’s a good analogy there, I don’t know,” Cohen says. “Education and prevention activities could, in theory, be productive [in business schools].”

There does seem to be a niche to be filled, as illustrated in a Slate article penned by professors from the Columbia Business School and the Kellogg School of Management last September.

“At present, the ethics curriculum at business schools can best be described as an unsuccessful work-in-progress,” the authors wrote.

Another approach to make business school students or young workers walk the straight and narrow path could be cognitive-behavioral therapy. CBT, which focuses on addressing dysfunctional emotions, thinking patterns, and behavior, has been shown to reduce recidivism among criminal offenders.

At the recent annual meeting of the American Association for the Advancement of science, Jens Ludwig, the director of the University of Chicago’s Crime Lab, described a CBT intervention used among a population of juvenile offenders in Chicago. The aim of the exercise was to correct what’s called a “hostile attribution bias” – kids raised in poverty are more likely to be yelled at, bullied, and looked down upon, so naturally they’re more likely to suspect that others are out to get them. Being predisposed to see other people as hostile also makes you more likely to get into trouble.

Ludwig speculated that some white collar criminals may have nursed their own kind of hostile attribution bias, born from ambition, ego, and being steeped in a competitive business culture. The lack of data makes it hard to be sure, though, and at the moment, there’s not much incentive for companies to monitor their employees for wayward thinking patterns.

However, “if the head of Goldman Sachs would go to jail if anyone at Goldman Sachs did anything wrong, you can bet they’d be CBT-ing the hell out of everyone,” Ludwig says.

Too Big To Jail?

It’s no great secret that when bankers behave badly, they usually aren’t punished. Neal Shover, a professor of emeritus of sociology at the University of Tennessee-Knoxville, isn’t surprised. Nor does he expect that to change.

“These are people who can call their [Congressional] representative or get an appointment with him, or fly him to Antigua,” Shover says. Corporate officers have “the opportunity to impress upon elected representatives on why it would be unfair, unreasonable, and threatening to economic markets to increase penalties” for white collar crimes.

Plus, many corporate crimes can be written off as bad business decisions.

“With someone held up at gunpoint, it’s hard to argue that there’s a legitimate social purpose,” Cohen points out. “With corporate crime there is concern you’re stifling legitimate business operations.”

In the past, financial collapses have been used as an opportunity to enact reforms and regulations, or to come down hard on white collar criminals. If history’s indicative, it’s only really in the crucible of crisis that bold moves can be forged. Glass-Steagal was a reaction to the Great Depression; the Sarbanes-Oxley Act, which put tougher standards in place for accountants and the board of public companies, was enacted in the wake of the Enron,Tyco and WorldCom scandals.

When U.S. federal judge Denny Chin sentenced Bernie Madoff to 150 years in prison in 2009, he wrote that “the message must be sent that this kind of manipulation of the system is not just a bloodless crime that takes place on paper, but one instead that takes a staggering toll.”

The latest recession has brought the Dodd-Frank reforms, but there’s little indication that this law will correct either the problem of banks being “too big to fail” or its executives being “too big to jail.”

“I think, to a great extent, we wasted the Great Recession,” Shover says.

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