White-collar crimes often have extensive consequences for victims, stakeholders as well as society as a whole. However, it is often problematic to defne and measure these types of crimes or to quantify the efects (Friedrichs 2010). Bankruptcy fraud is one particular subform of white-collar crime, committed within the framework of a (formal) business activity. In Sweden, ofenders have committed dishonesty or carelessness towards creditors, favoritism to (certain) creditors, or accounting fraud. An insolvent frm has therefore exploited an economic opportunity in order to gain some form of fnancial or business advantage (Alalehto and Larsson 2009; Delaney 1992; Friedrichs 2010). A substantial number of whitecollar crimes takes place within the small business sector (Croall 1989; Korsell 2015), and this is also true in a historical perspective—for example, a majority of the people convicted for bankruptcy fraud in early twentieth century Sweden were small-scale entrepreneurs. The understanding of how white-collar crimes would afect other agents and interests is incomplete. All other things being equal, it could be expected that the trend of bankruptcy frauds has a positive relationship with the bankruptcy trend: if bankruptcies decrease (increase), bankruptcy frauds should also decrease (increase). This interpretation suggests that variations in bankruptcies ‘cause’ variations in bankruptcy frauds. In the present article, we reverse this view, hypothesizing that the economic system—and agents within this system— would be afected by this form of economic crime. Drawing on recent research in the criminology and economics literatures, we develop a framework for an analysis of the difusion of bankruptcy frauds to other economic agents. Empirically, we investigate the potential efect of bankruptcy frauds on economic activity—more specifcally, on the bankruptcy volume. Our case concerns Sweden and the period of analysis is long, stretching from 1830 to 2010. The bankruptcy system has been regarded as a cleansing mechanism that sorts out ineffcient frms from the market (e.g., Miller 1991). However, this may not always be the case; it can also be conceived as a fnancial institution. As frms themselves can fle for bankruptcy, the bankruptcy system can be used to redistribute assets and evade payment of debts and obligations. The aim of this particular type of bankruptcy is usually to continue the business within the framework of an entirely new frm. The bankruptcy clears the frm of debt, while the costs are taken by the taxpayers and by creditors with unprivileged claims—usually other frms. This is usually not a legal violation, but rather a strategic means for reconstructing a business, or for making a proft (Akerlof et al. 1993; Delaney 1992). Bankruptcies in general would also have potentially damaging efects on other economic agents. Economists have developed models on the consequences of critical events in the economy: interlinkages between frms would have potential domino efects. Failure of fulflling debt commitments may lead to ‘bankruptcy chains’—a bankruptcy spreads to other frms, which may create a vicious cycle of bankruptcies (Gatti et al. 2006, 2009). Since bankruptcy frauds are integrated in the bankruptcy system, interlinkages and networks in the economy represent a source of difusion of both bankruptcies and of bankruptcy frauds. According to the criminology literature, bankruptcy frauds have potential difusion efects that are analogous to the efects of bankruptcies and ‘strategic bankruptcies’: a bankruptcy fraud committed by one frm may ruin other small businesses, such as suppliers and creditors (e.g., Alvesalo and Virta 2010; Croall 2004a). In essence, ‘bankruptcy for proft’ and criminal behavior amongst both large, established businesses (e.g., Akerlof et al. 1993; Levi 2008a; Pontell 2005) and by small businesses and entrepreneurs (Baumol 1990; Desai and Acs 2007; Gottschalk and Smith 2011), if reaching a cumulative level, would thus disturb the mechanism for entry and exit in the economy.