White-collar crime pays The Maxwell scandal: Leading article

Suppose that violent crime in Britain reached new peaks and that pensioners were being mugged at the rate of 40 a minute. Suppose that this went on for an entire year and that the average "take" from each assaulted pensioner was pounds 20. Imagine the national breast-beating, the newspaper headlines, the outrage from Tory MPs demanding the return of the rope, the birch, the thumbscrews or any other instrument of cruelty they could dream up. Think of the contempt that would greet any excuses for the muggers: difficult childhoods, over-bearing fathers, distressed wives, children worrying about their fathers going to prison.

The scale of the crimes is almost exactly analogous to those committed on the Maxwell pensioners (pounds 425m went missing); the scale of the reaction is quite different. Our society persists in regarding white-collar crime as somehow less deserving of censure than simple burglary or mugging. Last week, Mr Justice Buckley decided that Kevin Maxwell, along with another former executive in his father's companies, should not face a second trial on fraud charges, after he had been acquitted in an earlier one. His reasons included the "obvious distress" of Mrs Maxwell and the sheer expense of such trials. Let it be clear that nobody was proposing to put Mr Maxwell on trial twice for the same crime: the second trial involved distinct charges relating to a distinct company and they were separated from those in the first trial only because a judge insisted a single jury could not cope with them all. Let it be clear, too, that Mr Maxwell is a liar: that, at least, was the conclusion of Mr Justice Millett when he delivered his judgment in a civil case over shares in Berlitz, the language company. Mr Maxwell, he said, "lied to many different people on many different occasions"; he was like the office boy who puts the firm's petty cash on a "certain winner" in the Derby.

Yet Mr Maxwell, and all the other people who assisted his father in the biggest fraud of the century, has escaped without a day in prison. This might be accepted with more equanimity if Mr Maxwell were now to live quietly at home doing a little charity work and freelance accountancy. But we can be almost certain that, like his father, he will bounce back. Before very long, he will be building a new business empire, discussing "investment opportunities" with City banks and finance houses, jetting the world, posing for glossy magazines. In the cosy world of the rich, little stigma is attached even to convicted business villains (witness the amazing revival of Ernest Saunders of Guinness fame), never mind those who have narrowly escaped.

What is at fault here is not the law but the culture. The well-heeled and their spokespeople are fond of denouncing the "dependency culture" that afflicts the hapless underclass. The Daily Mail almost wet its knickers with excitement last week because Peter Lilley's hotline had netted 20,000 fraudsters, causing them to be deprived of their social security benefits. "Some of the frauds unearthed are so serious that they will almost certainly lead to prison sentences," the paper reported. No trouble with convictions there, you may be sure; no tear-jerking stories about children wondering if their fathers will return home; no worries that people may be too ill or senile or mentally upset to stand trial. We hear about such difficulties only in connection with crimes that flourish in the culture of the privileged: insider dealing, misuse of funds, tax evasion.

Insider dealing, for example, is widely dismissed in the City as a victimless crime. It is nothing of the sort: if one person is wrongfully making money, somebody else is wrongfully losing it. In the US, traders have been handcuffed on the dealing floor and marched away. Suspects, threatened with lengthy jail sentences, squealed on their accomplices. The message is clear: the rewards of white-collar crime may be high but the risks of being caught are higher. In London, by contrast, the few prosecutions of insider dealing (which is just a special form of fraud) were, in popular City opinion, unfair and ill-founded. Now, the Stock Exchange has all but given up pursuing the miscreants. So the British message is also clear. If you commit fraud, make it a big one, so that the costs of convicting you become prohibitively expensive. Get yourself an articulate, middle-class wife. And wear a suit.