WHITE COLLAR CRIMES
Introduction : It is common that certain professions offer profitable opportunities for
criminal acts and unethical practices which hardly attract public attention. There have
been many unethical persons in business , various other professions and even in
public life. They become unethical because of their neglect at school, home and
other social institutions. These kind of people have no regard for honesty and other
ethical values. Therefore, they carry illegal activities without the fear . The crimes of
this nature are called WHITE COLLAR CRIMES and they are essentially an
outcome of competitive economy of mid twentieth century.
MEANING OF WHITE COLLAR CRIME :
The famous Criminology Professor Edwin H. Sutherland coined the tem "White
Collar Crime' as "the crime committed by a person of respectability and high social
status in course of their occupation".
Sutherland further pointed out that a white collar crime is more dangerous to society
than ordinary crimes because the financial loss to society from white collar crimes is
far greater than the Financial loss from burglaries, robberies etc.
It is a crime that is committed by salaried professional workers or persons in
business and that usually involves a form of financial theft or fraud.
With the development of technology, White Collar Crime has become a global
phenomenon and in India it is increasing at a tremendous pace because of the
increase in the economical and industrial growth. There has been an unusual and
unexpected increase in the growth of computer specific white collar crime which
brings a great challenge for the law enforcement agencies as these crimes can be
committed from anywhere in the world by any anonymous person.
There are many professions where criminal and unethical practices are often going
unnoticed. In order to gain more for themselves, some unethical professionals
indulge into illegal activities without fear of loss of respect and prestige.
White Collar Crime can also be called as the crime of educated and professional
elites. The people who are committing this crime have usually a better understanding
of technology, their respective field, disciplines etc.
HISTORICAL BACKGROUND
The concept of white collar crime found its place in criminology for the first time time
1941 when Sutherland published his research paper on white collar criminality in the
American Sociological Review.
Prior to Sutherland, scholars like W.A. Bonger (1916), E.A. Ross (1907), Sinclair
(1906) and Steffens (1903) have also laid emphasis on the misdeeds by business
men and elites. Kar Manx and Friedrichs Engels have also contended that powerful
people commit crimes too.
American Sociologist E.A. RoSs (1907) coined the term 'criminaloid' focusing on the
businessmen who indulged in criminal activities under the shadow of responsibility.
In 1935, Albert Moris drew up the list of the 'criminals of the upper world", which
included bankers, manufacturers, politicians, contractors, stock brokers and law
enforcement officials.
However, the work of Sutherland was considered pioneering rather compared to
others.
OTHER CRIMES VS. WHITE COLLAR CRIMES
White collar crime is not a new phenomenon and has been in existence from many
centuries. It can be found in all types of businesses, professions and industries.
The Supreme Court of India in State of Gujarat vs. Mohanlal Jitamalji Porwal and
Anr has differentiated between the general crimes and white collar crimes.
In the above-mentioned judgement, Justice Thakker had stated that murder can be
committed in the heat of moment but these economic offences are committed with a
cool caculation and planned strategy to gain personal profits.
The characteristics of white collar crime mentioned below distinguishes it from other
crimes.
1. Direct access to the victim because of offender's high position:
Because of his/her position the offender has direct access to the victim.
E.g. when a thief commits a theft in a house, he first breaks the door or window and
then commit the crime. Therefore, before committing theft, a
thief must first gain access to the house by entering it. Whereas this is not in the
case of white collar crimes because the white collar offenders have easy and valid
access to their targets;
2. No information about the offender:
Most of these crimes are committed by offenders without coming face to face with
the victim;
3. Political Connections: Most of the offenders have big political connections and
somewhere the politicians are also involved in the said crimes
Therefore, it is difficult to take any action against such offenders
4. Harm to Society : These types of offenders can cause great harm to the public as
well as to the institutions and organizations.
CAUSES OF WHITE COLLAR CRIME
1. Greed: High class people are financially stable, however, they still commit crime
because of their greed to earn more. And for this purpose, they even choose illegal
ways to have an economic gain.
2. Competition: Darwin in his theory of evolution has stated that "survival of the
fittest" is necessary and thus there will always be competition for survival. However,
some people for their own greed and in order to get ahead of their peers commit
crimes.
3. No fixed laws or punishments: After committing the crimes most of the offenders
get away without getting any punishment because there are not enough laws to deal
with such kinds of crimes. In many cases, because of the supreme political
connections most of the offenders get away without any punishment. Moreover, in
many cases there are no witnesses for the said offences as such offences
are committed in private.
Types of White Collar Crimes
There are different types of white collar crimes. Some of them are as follows:
Bank Fraud: Bank Fraud means to engage in such activities in order to defraud a
bank or using illegal means to obtain assets held by financial institutions.
Blackmail: Blackmail means demand for money by threatening some person to
cause physical injury or exposing his secrets.
Bribery: Bribery means offering money, goods or any gift to someone in order to
have control over his actions. It is a crime whether someone offers or accepts a
bribe.
Computer Fraud: Computer frauds are such frauds which involve hacking or
stealing information of some other person.
Embezzlement: When someone entrusted with money or property uses it for his
own use, it is embezzlement.
Extortion: When a person illegally obtains someone’s property by actual or
threatened force.
Insider-Trading: When someone uses the confidential information to trade in shares
of publicly held corporations.
Money-Laundering: Money Laundering means the concealment of origin of illegally
obtained money.
Tax fraud: Tax fraud means evading tax by providing wrong information in tax forms
or illegally transferring property in order to avoid tax.
White Collar Crime is pervasive in almost all the professions and occupations in the
society. These crimes are common to the business world and Indian trade and
violation of Foreign Exchange Regulation Act and export and import laws are
resorted to make huge profits.
1. Medical Profession:
White collar crimes in the medical profession is not a new phenomenon and has
been into existence from very beginning. Some of the offences which are considered
as white collar crime in the medical profession includes providing false medical
certificates, llegal abortions, seling of banned drugs and medicines to patients or
chemists. Moreover, the people in medical profession makes misleading claims
through advertisements in newspapers and television.
2. Education:
Nowadays, education is only considered as a source of making money Educational
institutions are least bothered about providing quality education to the students. In
order to make money for themselves, many educational institutions are engaged in
the business of providing fake educational certificates. In government institutions, the
teaching staff are often found to be indulged in corrupt activities. Teachers hardly
teach their students in school and often blackmail them to take private tuitions.
R
3. Engineering & IT
Sub-standard materials are being used for construction of buildings, roads and
dams, which not only endangers life of many citizens but also result into huge losses
to the government. Any illegal access of computer and internet services is known as
Internet fraud. This kind of fraud is very common these days and the most vulnerable
to such incidents are the people who use internet and mobile banking services.
4. Business
Edwin Sutherland researched on large number of companies and corporations in the
United States and conducted that most of them were involved in illegal contracts,
infringements against copyrights and trademarks, unfair trade practices, bribery etc.
these types of crimes are generally committed by big businessmen and tycoons. The
Sanathanam Committee Report on Prevention of Corruption expressed great
concern about the problem of hoarding, profiteering and black marketing. It was
observed by the committee that Indian business build up secret stocks of foreign
exchange abroad, violating the Import and Export Laws.
Adulteration of edible foodstuffs is also frequently committed by businessmen which
us injurious to public health. Some if the common adulterants used in various edibles
and articles of foodstuffs are :
● injurious colors such as sarcil, saccharin etc. in preparation of ice cream and
multi
● addition of blurring paper or soapstone in panir
● geri, ratanjot and powdered husk of rice or bran in powdered chillies and
spices
Fake Employment Placement Rackets is also one of the example of white collar
crimes in business. A number of cheating cases are reported in various parts of the
country but the so called manpower consultancies and employment placement
agencies which receive the youth with false promises of providing them white collar
jobs on payment of huge amount ranging from 50 thousand to two lakhs of rupees.
5. Society
White collar crimes are not only restricted to professions. Individuals, whether
belonging to higher class or middle class are also part and parcel of such crimes.
E.g. Often individuals misrepresent the details about their income in order to pay low
income tax, which is considered as a crime.
Non-payment of taxes or non-compliance of tax paying polides is referred to as Tax
evasion. The tax evaders are either punished with huge fines or imprisonment or
both.
Moreover, the offenders in certain cases try to hide the source and destination of
income received by them. This offence is known as Money Laundering and it is done
with the intention of making it seem that the money have come through legitimate
means.
White Collar Crime in Legal profession:
In India, the lawyer's profession is not looked with much respect these days. There
are two obvious reasons for this. The deteriorating standards of legal education and
unethical practices resorted to by the members of legal profession to procure clients
are mainly responsible for the degradation of this profession which was once
considered to be one of the noblest one. The instances of producing false evidence,
engaging professional witnesses, violating ethical standards of legal profession are
the common practices which are quite often practised by the legal practitioners.
Contributing factors for white collar crime : Of all the factors, the economic and
industrial growth throughout the world has perhaps been the most potential cause of
increase in white collar crimes in recent years. The changing socio- economic
scenario of the society coupled with increase in wealth and prosperity has furnished
opportunities for such crimes.
White Collar Crimes in India
White Collar Crimes are rapidly increasing in our country with the advancement of
commerce and technology. The recent developments in the technology have given
new dimensions to computer related crimes known as cyber crimes. As such, the
white collar crimes are increasing with the development of new websites. The areas
affected by these crimes are banking and financial institutions, industry, business etc.
Thus crime is an act or omission which constitutes an offence and is punishable
under the law. As the white collar crimes are increasing on daily basis, it injures the
society on a large scale because the laws are not properly administered and
therefore there is a need to curb the factors that are helping in the commission of
such crimes.
The Santhanam Committee Report showed a picture of white collar crimes
committed by persons belonging to high status. The report of the committee states
that the big industrialists, businessmen, government officers are responsible for
white collar crimes in India.
After the independence, the first case of white collar crime was Mundhra's Case.
India's first Prime Minister Jawahar Lal Nehru set up a commission headed by
Justice M.C. Chagla to investigate the matter. Justice Chagla concluded that
Mundhra had sold imaginary shares to LIC by defrauding the insurance company to
the tune of INR 1.26 Crore. Mundhra was sentenced to 22 years in prison.
Another incident took place in the beginning of 21 century was the Satyam Scam.
This scam involved the fraud of INR 7,000/- Crores. Few years back, CBI arrested
many Trinamool Congress leaders for the alleged involvement in INR 24.60 billion
chit fund scam.
LEGAL FRAMEWORK
The legal framework in India is not so comprehensive to deal with the issue of white
collar crime. There are no strict laws which can punish the offender as most of the
offenders get away because of the lack of evidence. The other difficulty is that the
members of the legislature who have been given the responsibility to make and
implement rules are themselves indulged in these heinous crimes.
The main reasons for which these white collar criminals or occupational criminals go
unpunished are because:
● the law makers of the country are from the same social group;
● the effort made by the police against these criminals is highly low;
● of easy bail and mild sentences; and
● the impact of white collar crimes is not on a specific individuals thus it creates
a casual attitude of the society towards white collar crimes.
The delayed justice which is administered by our judiciary is also one of the reasons
of rise in white collar crimes. Since white collar crimes are on a rise, it is highly
important for the judiciary and the police to distinguish between white collar crimes
and traditional crimes.
REMEDIAL MEASURES:
In a country like india where large scale starvation, mass illiteracy and ignorance
affect the life of the people, white collar crimes are bound to multiply in large
proportion. However, some of the remedial measures for combating white collar
criminality may be states as follows:
● Creating public awareness through electronic and print media etc.
● Constitution of special tribunals
● Special chapter should be incorporated in IPC.
● Urgent need of National crime Commision
● Strict laws should be made
CONCLUSION
White collar crimes are a big global concern and is increasing at an alarming rate.
Various studies have proved that the financial loss to the society from white collar
crime is much more than the other crimes. India is a developing country and white
collar crimes are not only a detriment to the economic growth of the country but also
spoils the image of our country. It can be easily understood that to eliminate white
collar crime is not easy at all because it has been into existence from many
centuries, however, we along with government and legal entities should try to reduce
such crimes.
