Most of the data available on financial crime is produced without a credible methodology, said Levi, whose research was funded by the Economic and Social Research Council (ESRC).
“Typically, the information available on offending or threat is just a marketing hype. It comes from business consultants who want to scare companies and government into buying services aimed at dealing with problems that may be a lot smaller than claimed,” he said.
Even when public agencies do make a serious effort to produce data that they believe is carefully researched, it often lacks professional or public credibility, he added.
“In an age of cynicism, their efforts can be interpreted as an attempt to increase their budgets and powers. This is a crisis of authority and legitimacy.”
Large tax frauds are nearly always dealt with via a settlement payment whereas social security fraudsters get a criminal record for crimes involving much smaller amounts of money, he said.
Some persistent tax fraud offenders are unlikely to be discouraged if their only punishment when caught is to pay a financial settlement anonymously, Levi argued: “They need to be prosecuted so they are taken out of circulation and to show others that this kind of behaviour will be dealt with seriously.”
Levi said his research findings have been shared with the Financial Services Authority, the National Fraud Authority, the Association of Chief Police Officers and the European Commission.
Financial crime is one of the biggest business and social issues of our time, Levi argued: “If we are to make a better job of dealing with the problem we need to move beyond oversimplified forms like ‘organised crime’ to work out how online and offline fraud and laundering are enabled and what it takes to change these opportunities and motivations."
