Analysis of criminal case using the Criminology Theory

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Summary of the article

The article “Ponzi Scheme gets 12 years” by Chau Lam is a narrative of how Mr. Brian Callahan pleaded guilty of securities fraud and was sentenced to 12 years imprisonment and restitution amounting to $67.6 million. Mr. Lam had collected $100 million from 40 investors with a promise to re-invest the monies in funds such as stocks, bonds, and mutual & hedge funds. Instead, Mr. Callahan used the investors’ monies fund his lavish lifestyle, repay existing investors, and pay debts on the Panoramic View Resort and Residences. He had hoped to be sentenced to one year imprisonment and was shocked when the pronouncement of 12 years was made by Judge Arthur Spatt. Unfortunately, the 40 victims that were affected by Mr. Callahan’s crime must suffer loss for his crimes. In as much as they will receive part of their investments, they will still lose a large portion of their investments. It is a great relief, though, that the law will punish him for his crimes (Lam 2018).

The Criminology Theory

Criminology is the study of the reasons why people commit crime. The appropriate criminology theory in this case is the Rational Choice Theory. This theory states that people act in their self-interest. They weigh the consequences of their crime vis-à-vis the benefits that they will receive from their actions. Whenever they find that the benefits are worth more than the risk they are taking, they proceed on to execute their crime (Clarke & Derek, 43). Unfortunately, in this era of individualism where people only consider their own selfish interests, such crimes have increased.   

Why the theory chosen best explains the Criminal Act

The Rational Choice Theory best explains the Ponzi scheme case because of two reasons. First, we are told that Mr. Callahan used the monies he received to fund his lavish lifestyle. On the other hand, many victims suffered because of his actions. Thomas Claus, one of the victims in the fraud case, lost $905,000 which was his family’s inheritance from his deceased father. They hoped to get returns from the investment for the purpose of taking care of their aging 77-year old mum, Mary. Another victim called Ostry, who has cancer, lost his Palm Beach house and couldn’t even afford to pay his autistic son’s school fees. Instead of thinking about the effect that his actions would have on the investors, Mr. Callahan just thought about enriching himself and his company. Thus, he acted out of self-interest. Secondly, Mr. Callahan had pondered about the outcome of his actions. It is no wonder he surrendered to the police by himself to face prosecution and thereafter judgment. This is a feature of the Rational Choice Theory.

Which aspects of crime cannot be explained by the theory you chose?

The theory does not explain the motivation for his crime. Especially since Mr. Callahan knew that if he was caught, he would lose everything. It also does not explain the fate of those connected to him such as the brother who was fully aware about his crimes. What motivation did the brother have to continue supporting him in his crime knowing that if his brother was caught, then he would be charged for being an accomplice? The Social Learning Theory is capable of explaining people’s motives in committing crime.

Work Cited

Lam, Chau. “Panoramic View co-owner sentenced to 12 years for Ponzi scheme.” Newsday. Accessed on November 30, 2018 from

Clarke, Ronald V., and Derek B. Cornish. "The rational choice perspective."Environmental criminology and crime analysis. Willan, 2013. 43-69.

December 12, 2023
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