Why Banks Make Better Criminals Than People

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Pedestrians walk past an embossed Bank sign at the entrance of a branch of the Swiss banking giant UBS on October 13, 2012 in Zurich. UBS could shed 10,000 jobs in the near future, according to a report in the Tages Anzeiger daily. The company could announce the layoffs when it presents its quarterly results on October 30, the newspaper said. (Photo by Afabrice Cofrini/AFP/Getty Images)

Pedestrians walk past an embossed Bank sign at the entrance of a branch of the Swiss banking giant UBS on October 13, 2012 in Zurich. UBS could shed 10,000 jobs in the near future, according to a report in the Tages Anzeiger daily. The company could announce the layoffs when it presents its quarterly results on October 30, the newspaper said. (Photo by Afabrice Cofrini/AFP/Getty Images)

People are pretty bad at robbing banks. According to the most recent Bank Crime Report from the U.S. Federal Bureau of Investigation, there were 5,014 attempted or successful robberies, 60 burglaries, and 12 larcenies at financial institutions in 2011. Most of these (4,495, about 90%) were at commercial banks, with a handful committed at credit unions, savings and loans institutions, and mutual savings banks.

Some sort of loot (mostly cash) was taken in 89% of the 5,086 total incidents, and all told, people took off with $38.4 million worth of stuff. This may seem like an impressive haul at first glance, but it works out to about $7,500 per incident. Consider that the conviction rate for bank robbery is over 50%, and it’s starting to look like your average bank robber is just hopelessly inept. You couldn’t even make minimum wage as a bank robber without all but guaranteeing your arrest.

So if you really want to rob a bank, you need to go above and beyond the scope of traditional robbery, burglary, or larceny. If movies have taught us anything, it’s that most great crimes are inside jobs orchestrated by calm and calculating wolves in sheep’s clothing. Instead of using firearms or brute force, these criminals have found a way to hide in plain sight and have figured out how to use the system against itself, to the detriment of many and for the benefit of the few.

This, at least, is how William Black, formerly a top banking regulator and now a professor at the University of Missouri, Kansas City, put it in a 2013 TEDx talk. The people who really know how to pull a heist — who can get away clean with millions — are not outsiders, they are the very people in control of the bank. They are the people responsible for executive decision making and they commit what Black calls control fraud.

“Control fraud is what happens when the people who control, typically a CEO, a seemingly legitimate entity, use it as a weapon to defraud,” Black says.

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