International Journal of Law, Policy and Social Review
www.lawjournals.net
Online ISSN: 2664-6838, Print ISSN: 2664-682X
Received: 20-07-2023, Accepted: 06-08-2023, Published: 21-08-2023
Volume 5, Issue 3, 2023, Page No. 46-50
An overview on white collar crime
Sarada Saha
Assistant Professor of Kolkata Police Law Institute, West Bengal, India
Abstract
White collar crime is not visible and non violent in many different respects. Offences are typically not revealed within
occupational and organisational routines are therefore it is difficult to detect the victims observers or law enforcers and
therefore few offenders are tried and sentenced in open court. White collar crime is absent from public and academic
discussions of Crime and criminal policy. The main objective of this Article is to expose the extent impact and failure to fully
criminalise the crimes of the 'powerful'. The main purpose these crime is to obtain money and property avoid losing existing
property or gain a personal or commercial advantage. White collar crime even include organisational crimes. At the end of the
day, it can be clearly said that white collar crime cause much bigger crimes. This Article has given stress on precautionary
measures in order to detect and prevent white collar crime.
Keywords: Invisible, non-violent, organised crime, money laundering, corporate crime
Introduction collective and organized effort by a corporation to increase
White Collar Crime is mainly non-violent crime committed its profit at any cost.
for financial gains and it leads to distress and loss to other White collar crime is a part of a collective and organized
person. It has to be remember that white collar crime, is also effort to serve the economic interest of a corporation is
not a victimless crime. On the other hand it destroys known as corporate crime. In many cases, it is seen that
families, companies and leave the victim suffering and corporate crime are conducted by bogus entities that pose a
weeping. The term white-collar crime is a generic term and legal corporation or partnership. Although corporation
the term includes corporate fraud, money laundering, insider cannot be incarcerated they can be criminally punished with
trading, embezzlement etc. Generally it is seen that white fines and other section. In this case criminal liability is
collar crime is committed by sophisticated segment of based on the act or omission of the company’s employees
society. White collar crime consists of some essential and executive [2].
impediments White collar crime is mainly associated with the educated
1. White collar crime is non-violent in nature. and affluent class. The word ‘white collar’ has been first
2. It is an act or omission which is resulting in injury. coined by Edwin Sutherland, a sociologist. Sir Edwin
3. The intension of committing white collar crime is to Sutherland has defined the crime as that type of crime which
defraud or deceive other. is being committed by the respective section of person and
4. White collar crime causes wrongful loss to the victim those who hold high social status during the course of their
and wrongful gain to the perpetrator. occupation. Various management defined white collar
5. White collar crime causes financial enrichment of the worker as ‘shirt and tie’ setters. Nowadays another things
wrongdoer. that facilitate white collar crime is ‘internet’.
6. White collar crimes cause financial distress to the
victim. Historical Background
7. White collar crime is not dependent on the application In the year 1473 in England, a case known as ‘Carries’s
of physical force [1]. Case’ where white collar crime was committed the fact of
the case was that as principal entrusted an agent with the
White collar crime is mainly committed by the person who responsibility of transporting the wool from one place to
often by the virtue of their occupation exploits social, another. Thereafter, the agent broke the trust of principal by
economic or technological power for personal or corporate stealing some of this wool. In this case the English Court
gains. Basically the term ‘white collar crime’ has been punish the agent by adopting a doctrine of ‘breaking the
coined in 1939 by the American Criminologist Edwin bulk’ which mean that the agent whose status was that of a
Sutherland. Advancement of commerce and technology bailee to whom the possession of goods has been transferred
have broadened the scope of white collar crime. tried to break it open and misappropriate the contents.
White collar crime include price collusion, falsifying reports Thereafter, the growth of industrial capitalism has taken
of tests on pharmaceutical product to obtain manufacturing criminality into another level. Out of greed and in order to
licenses, and substituting cheap, defective material for attain more the bourgeois institution are committing more
costlier components specified in the construction of roads or crime. In order to stop these, in the year 1890 the Sherman
building but charging the customer for the full cost of the Antitrust Act was passed in America. The said act made the
specified materials. At time such activities can be attributed monopolistic practices illegal. Even penalties was imposed
to individual employees or executives acting on their own on the offender of white collar crime in Great Britain along
initiative, but it is often the case that they represent a with various competition or antitrust laws was adopted.
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In the year 1939, Edwin Sutherland for the first time coined 2. Greed: There is a saying that ‘there is ample for a
the term ‘white collar crime’. He has defined ‘white collar man’s need but never enough for a man’s greed’. The
crime’ as that of crime which is being committed by person ever increasing wants of man is one of the sole factor
who hold high status in the society during the course of their behind the commission of such offenses.
occupation.
In the year 1934 Albert Morris stated that when the person 3. Convincing Power of the Perpetrators: The offender
who are holding high social strata when committing any can easily convince the victim as they do not involve
illegal activity during the course of their occupation, they violent streaks that characterize traditional crimes.
must be punished by putting that illegal activities under the
category of crime. 4. Necessity: In many cases it is found that the offender in
Sir Edwin Sutherland drew the distinction between blue order to overcome financial hurdles for supporting their
collar crime and white collar crime. Thereafter, in the year family out of necessity commits white collar crime.
1941, finally, the concept of ‘white collar crime’ got its
recognition in criminology. 5. Satisfying one’s ego: Sometimes the offender commit
this type of crime in order to satisfy one’s ego.
White Collar Crime vs Blue Collar Crime
Meaning 6. Lack of Proper Implement of Law: Inability to
The offenders white collar crime need to have knowledge execute existing laws in a strict manner often results in
before committing the crime, but in case is blue collar crime rise of such acts.
the offenders can commits the offence physically. The
concept of blue collar is age old concept. But the concept of 7. Advancement of Technology: Advantage of
white collar crime is new concept rather it is a new species technologies is another reason behind rapid growth of
of crime. white collar crime. Internet is another contributing
factor for growth of this type of crime [4].
Mens Rea
In case of white collar crime mens rea is not an essential Impact of White Collar Crime
ingredients and in case of white collar crime social White collar crime have a large impact on the society and it
condition that is poverty, personal condition of the offender does not only affect the criminals. It is also known as socio-
is also not a factor. Whereas mens rea is an essential economic crime because it has direct effect on the society,
ingredients in blue collar crimes and social condition that is when due to white collar crime huge losses on business is
poverty, illiteracy, personal condition also plays a vital role committed it has a direct impact on the consumers and the
in case of blue collar crimes. society. There are various numbers of frauds and scams that
had been exposed in our country like banking scam, fodder
Direct access to the targets scam etc. Due to these frauds and scams the economy of our
As white collar criminals are the person who are holding country has shambled. The impact of white collar crime on
high position in their company so it is easier for them to the society is great. There is loss in every field, from the
have direct access to their target. But the offenders of blue costs of commodities to the securities and insurance. One
collar crime have to pass through various hurdles in order to financial fraud can affect the businessmen, the investors and
reach to their target point. the government. One financial fraud will cause harm to the
reputation of the company, lack of profit and gain of losses.
Mask / Veiled Offender
The offender of white collar crime does not have to come Classification of White Collar Crime
face to face with the victim so their indentity remains White collar crime is generally divided into two categories:
concealed. But in case of blue collar crimes, the offender 1. Individual Crimes: Crimes which is done for personal
has to came face to face with the victim, otherwise he gains or enrichment are called individual white collar
cannot inflict injury to the victim, thus indentity of the blue crime when any particular individual commits any
collar offender gets revealed. crimes for his wrongful gain and for wrongful loss of
others.
Nature of Harm
Sometimes in case of white collar crime the harm is 2. Corporate Crimes: White collar crime is part of a
inflicted not only an individual but to the other institution collective and organized effort to serve the economic
and organization as well. But, generally in case in blue interest of a corporation is known as corporate crime. In
collar it is seen that harm is inflicted on the individual or the some cases corporate crimes are conducted by bogus
individual’s family [3]. entities that pose a legal corporation or partnerships.
Although corporations cannot be incarcerated, they can
Reason Behind Committing White Collar Crime be criminally punished with fines and other sections.
There are various reason behind committing white collar Criminal liability is based on the acts or omissions of
crime. The reasons are stated below: the company’s employees and executives.
1. Lack of Awareness: White collar crime is a new
concept and it is different from traditional type of There are several ways in which white collar crimes can be
crime. Many times it is seen that victims fails to executed. Those ways are stated below:
understand its and are easily fooled at the hands of such 1. Bank Fraud: Act committed or omitted to defraud a
perpetrators. bank institution.
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International Journal of Law, Policy and Social Review www.lawjournals.net
2. Bribery: It is an act which is committed with the gain benefits from a health insurance submits false
intention to create undue influence over a party holding information.
some eminent position or in order to accelerate and
conceal certain act in order to defraud other. 15. Racketeering and RICO: It is defined as running an
illegal business such as drug trade prostitution ring or
3. Black Marketing: Act involving the sale of illegal illegal gambling activity. RICO stand for the Federal
things or selling legal things in an illegal way, for Racketeer influenced and Corrupt Organization Act,
minting money. which is a confusing law that allow government to go
after large mafia style crime organization.
4. Corporate Fraud: Act done by corporate entities
which involve accounting schemes that are conceived 16. Cheque Kiting: It is done when someone writes a
to deceive the investor auditors and analysts about the cheque for more than the funds available in his or her
true financial condition of a corporation. account and cashes it or places it in a new account. He
or she fill the old fund with money before the cheque
5. Insider Trading: Act that involves trading in a public clear in order to get an interest free loan during the time
company’s stock by someone who has non-public, before cheque clears.
material information about that stock for any reason.
6. Money Laundering: It is an act by which large amount 17. Computer Fraud: A new form of white collar crime,
of money is being minted and that is generated by way computer fraud includes hacking, piracy, phishing and
of criminal activity such as terrorist funding or spamming schemes and illegal removal or tampering
trafficking and thereby making them appear to have with data.
come from legitimate sources.
With the advancement of technologies the commission of
7. Mortgage Fraud: Deliberate misrepresentation and white collar crime has increased at alarming rate.
deception involving lending practices that target certain
borrowers. Indian Legislative Regime
In India various legislation have been passed in order to
8. Pump and Dump Schemes: This is another type of combat white collar crime.
white collar crime whereby investors are encouraged to
buy shares fraudulently in a company in order to inflate Essential Commodities Act, 1955: This act basically gives
the price artificially and then selling one’s own shares power to the government to issue order for controlling the
while the price is high. sale and purchase price of essential commodities. After
many cases of price gouging and hoardings, they added
9. Self-dealing: Basically this refer to the conduct of a masks and sanitisers under the Act. The price for these
trustee or other fiduciaries that consist of taking goods was also fixed later. The Ministry of Consumers
advantages of their position in a transaction and acting Affairs advised the state government to take measures to
for their own benefit rather than in the interest of the maintain the demand and supply balance of sanitisers.
beneficiaries of the trust. Contravention of the order can lead to imprisonment up to
seven years or fine.
10. Wire Fraud: A crime in which a person plots a scheme
to defraud on obtain money based on false Industrial (Development and Regulation) Act, 1951: The
representation. This criminal act is achieved using main objective of this Act is to take necessary steps for the
analog or electronic communication techniques. regulation and development of important industries. The act
brings under commerce in certain commodities. The Control
11. Felony Embezzlement: Embezzlement is generally a of Central Government the development and regulation of a
misdemeanor, but becomes a felony when the amount number of industries listed in the first schedule. This act
of money or property is over specified amount. provides necessary means to the Central Government to
implement its industrial policy. This Act also regulate the
12. Falsifying Documents: This type of crime occurs when pattern and direction of industrial development. A system of
someone lies or omits important information an official licensing is introduced under the Act to regulate planning
forms or documents in order to receive some sort of and future development of new undertaking on sound lines.
gain. This can include lying on various forms including
police reports, passport application and tax forms as Import and Export (Control) Act, 1947: This Act impose
well as forging a signature. restrictions on import and export of goods.
13. Tax Evasion: Tax evasion is committed with an Income Tax Act, 1961: This Act was introduced with the
intention to conceal one’s actual taxable income and intention of widening the net of the tax and giving them
one’s original position to the authorities. It means to extensive power or there was no time limit prescribed under
hide the money obtained from the illegal means in order the Black Money Act.
to reduce one liability to pay tax and to show low
income. Commodities Act, 1955: This another legislation to combat
white collar crime. This Act is enacted for the interest of
14. Health Care Fraud: Health care fraud is basically that general public for control of production, supply and
type of fraud which occurs,when someone in order to distribution of track and commerce in certain commodities.
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crime. Not only legislation but also judiciary has an
Foreign Exchange (Regulation) Act, 1973: The FERA Act important role in curbing white collar crime.
is a legislation that was enacted with the purpose to regulate
certain dealing in foreign exchange, impose restrictions on 1. SEBI vs Burman Plantation and Others
certain kinds of payment and to monitor the transaction The Learned Counsel on behalf of SEBI stated that the
impinging the foreign exchange and the import and export company is being wrongly accused as the company was not
of currency. in a position to pay its debts, including payment to its
investors. When the advertisement by the company was put
Prevention of Corruption Act, 1988: This act focuses to to question, the council said that the advertisement was
serve a consolidated provision of IPC, CrPC in order to deal given in 2003, while the order was passed in 2004, when the
with the issues relating to the increased cases of bribery and company was not in a position to payback its debts. The
corruption within India. The main object of this act is to sum of money which the investors were claiming was not
restrict the government servant to engage in any unlawful cited. The main claim of the counsel made the legislatures
activity. raised the punishment from 1 year to 10 years and also
increased the fine which may now extend to 25 crores by
Company’s Act, 2013: The provision under this act amending the laws under Sec 24(1) of SEBI Act.
provides a list of activities that falls within the purview of
fraud and specific sanction have already been assigned to 2. Anokh Ekka vs Central Bureau of Investigation
the same. Moreover, the nature of all the acts that have been Anokh Ekka was accused of money laundering after
enlisted to be considered as non-cognizable in nature and acquiring a large amount of movable and immovable
rules for speedy trail of the same has also been stated under properties in his name and that of his family within a three
the Act. year period after becoming the minister. The defendants
were found guilty of plundering and laundering a large
Prevention of Money Laundering Act, 2002: The main quantity of public funds of Supreme Court. He postponed
objective of this Act is restricting any form of activities that the verdict and tampered with the evidence against him. He
came under the ambit of money laundering. As India is till was also accused of misusing the legal system and
considered as one of the greatest hub for the generation of attempting to defraud the court system.
large volumes of black money and thereby range of
activities are being carried out on the perspective of turning 3. Arun Kumar Mishra vs Directorate of Enforcement
the same into legal or genuine money. In this above mentioned case five persons opened a
fictitious account with the Punjab National Bank and made
Indian Penal Code, 1860: Indian Penal Code contain the personal gains while causing PNB to lose a significant
arrangement to check violation like Bank Fraud, Insurance amount of money. This offence did not come under the
Extortion, Charge and Misrepresentation and so on. Section purview of any section of the Prevention of Corruption Act,
463 to 474 of IPC deals with offence related to white collar the money laundering case was dismissed. Ex-post facto
crime and they include defilement and remuneration, laws has no legal force. It is a basic right under the stated
nourishment and medication contaminated, tax avoidance, Article not to be tried under a legislation that did not exist at
dark advertising, profiteering, storing, tax erosion, human the time the offence was committed. The court stated that if
trafficking, digital wrong doing and so on. money laundering has been proven against the petitioner,
then the Enforcement Directorate can bring a new case
Information and Technology Act, 2000: This Act is against him under the statute in effect at the time [6].
mainly enacted to tackle the crime related to computers and
technology. The main object of this act is to regulate and Conclusion and Suggestions
authenticate the information exchanged while doing White collar crimes are the crime which causes a harm to
commercial transaction. This Act also contain penalties the economy of the country as a whole. It threatens the
where any unauthorized data is downloaded assessed, country’s economy by bank fraud, economic thefts evasion
copied. of tax etc. It not only affects the financial status of a country
or a person, but it has also a negative impact on the society.
Securities Exchange Board of India Act, 1992: The SEBI There is no proper definition of white collar crime in Indian
is the regulatory agency in charge of enacting and amending laws. These socio-economic crimes should not be taken
regulation governing unfair activities in the financial leniently by the government. There should be more stringent
market. This act ensures that all essential information is punishment in order to prevent the white collar crime. Most
available to participants while also ensuring that no of the people are not aware about these crimes so there is
sensitive information is disclosed in process. Under the said urgent requirement of public awareness with the
act, the penalties for doing corrupt activity such as insider advancement of technology the white collar crime has
trading have been outlined. The Amended Act also talk extended at an alarming rate. No technology is bad unless
about punishment. and until we know the right key to use it.
These are the various act by which white collar crime can be Suggestion to prevent white collar crime
combat. The main object of these Act is to tackle the crime. In India where there is mass illiteracy large scale starvation
This act also contains the penalties so that it has a deterrent and ignorance affect the life of the people, white collar
effect on the offender of white collar crime [5]. crime are increasing in large proportion. There is high need
to control these crime, however, some of the remedial
Role of Judiciary in Combating White Collar Crime measures for combating white-collar crime are stated as
Judiciary has played a vital role in combating white collar below:
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1. Creating public awareness against the crimes through
the media of press, platform and other audio-visual
aids. Intensive legal literacy programmes may also help
to reduce the incidence of white-collar crime to a
considerable extent.
2. Special tribunal should be constituted with power to
award sentence of imprisonment.
3. Stringent regulatory laws and drastic punishment
should be enforced to combat white collar crime.
4. A chapter should incorporated in the Indian Penal Code
on ‘white collar crime’.
5. Offenders of white collar crime should be dealt sternly
by prescribing stiffer punishment keeping in view the
gravity of injury caused to society because of these
crimes.
6. The Central Vigilance Commission should monitor the
working of the officials sitting at top position and also
cross-check their works, so as to ensure transparency in
the system.
7. The electronic and print media should be utilized in the
right way to spread awareness about white collar
crimes. The general people need to be aware of such
crime and also they need to be aware of the remedies.
8. The government may establish a separate body which
would look into the matter of crimes and criminality
prevailing in the country. The independent body could
be named as the National Crime Commission.
The media has a key role to play in reducing the rate of
increasing white collar crimes. It has been noted that most
of the white collar crimes go unreported. So in order to
combat white collar crime media have to be active in this
regard [7].
References
1. https://bnblegal.com visited on 27.7.22
2. https://www.britannica.com visited on 27.7.22.
3. https://blog-ipleaders.in visited on 28.7.22
4. Mansi Batra, “White Collar Crime: Detailed Analysis”,
published by B&B Associated, New Delhi
5. https://taxguru.in visited on 01.08.22.
6. https://www.legalserviceindia.com visited on 2.8.22.
7. https://blog-ipleaders.in visited on 3.8.22.
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