29 January 2016

Musings On Criminal Sophistication

The lion's share of crimes are extremely simple and unsophisticated.  Theft or burglary or robbery of tangible personal property or currency.  Assault or murder or rape with guns or knives or clubs or their bare hands.  Arson committed was gasoline and matches or a cigarette lighter.

Little or no specialized skill or training is required.  The crime itself is usually committed over the course of less than an hour.  Most of the crimes involve just one, or just a few offenders, and just one or just a few victims.  Sometimes there is some premeditation, but just as often, the crimes are opportunistic or impulsive.

The economic returns from these crimes are often small and are increasingly falling.

A small share of crimes are don't fit this mold.  Perhaps the paradigmatic examples of sophisticated crimes are Ponzi schemes, securities frauds, and cyber crimes that steal credit card and financial account information from large numbers of people associated with a credit card merchant.

These crimes require criminals to have high level information technology, legal and financial operations knowledge, are often committed over periods of time months long or longer, are much more likely to involve some manner of deceit than physical force, and give rise to losses that are many orders of magnitude larger than run of the mill unsophisticated crime.

Another class of sophisticated crimes involve "organized crime" usually involving some form of vice and/or tax evasion.  This don't require quite the same skill levels as truly sophisticated crime, but do required coordinated action from very large numbers of offenders within in the organization, often with collusion from public officials.

Most crimes are unsophisticated crimes committed by unsophisticated criminals because most criminals are capable of committing any other kind of crime.  Sophisticated criminals, in contrast, only commit very lucrative crimes, because they have the skill set necessary to engage in decently playing economic activity.  And, because sophisticated crime is so much more rare, the targets tend to be much softer.

My impression is that while organized crime may make up a quite substantial share of all criminal activity (perhaps more than half by economic value or impact) that really sophisticated crimes don't (perhaps 5% by economic value or impact).  But, this intuition may simply be a function of many of those crimes going unsolved and unpublicized because they are hard to solve and tend to have less of a visceral impact on public sentiment when they are discovered.  Given the much larger losses typical associated with each instance of truly sophisticated crimes relative to unsophisticated ordinary crimes, the percentage of criminals who are sophisticated must be smaller still (perhaps less than 1% of the total).

The fact that the number of sophisticated criminals is small, and their impact is large, suggests that focused investigation, prosecution and incarceration of these offenders might have more impact than similar efforts directed at unsophisticated criminals, because one instant of impulsive or opportunistic action by someone with few skills can replace an unsophisticated criminal who is taken off the streets in an instant.

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