WHITE COLLAR CRIME

What is a white-collar crime?

White-collar crime is a type of non-violent crime in which financial gain is often the primary motivation for the criminal act. White-collar criminals typically hold a professional job that confers power and/or status, as well as one that pays significantly more than the industry standard.

During the 1930s, sociologist and criminologist Edwin Sutherland is generally regarded as the person responsible for the development of the term "white-collar crime." It was he who first came up with the term "persons of respectability" to refer to those who are generally seen as having a high social position. He came up with this term in order to characterize the various forms of criminal behavior that are frequently carried out by "persons of respectability." At the end of the day, Sutherland was the person most responsible for the establishment of the Bloomington School of Criminology at the State University of Indiana.

The top levels of society were believed to be incapable of engaging in such criminal conduct prior to Sutherland's invention of the notion of white-collar crime. White-collar crime was first introduced by Sutherland.

When Sutherland initially wrote a book on the subject, several of the largest firms in the United States successfully fought to have the book substantially restricted. Such a concept was so strongly ingrained in society at the time that the lawsuit was successful.


Scope of white-collar crime in India:

In India, as in the rest of the globe, white-collar crimes such as fraud, bribery, and corruption are among the most widespread types of criminal activity. A report titled "The changing dynamics of white-collar crime in India" was published by The Business Standard on November 22, 2016, and it stated that in the last 10 years, the Central Bureau of Investigation (CBI) has found a total of 6,533 cases of corruption, out of which 517 cases were registered in the last two years. The majority of these cases were found in the public sector.

According to the statistics, the value of the transactions that were conducted with fraudulent or duplicate PAN cards totaled 4,000 crores. With 999 instances being recorded online, Maharashtra demonstrated a significant growth in the number of cases being reported online. The report also revealed that about 3.2 million consumers had financial losses as a result of the theft of their card details from YES Bank ATMs that were handled by Hitachi Payment Services. These ATMs were located all over the world.

One category of white-collar crime, known as cybercrime, has experienced explosive expansion in recent years as a direct result of developments in both business and technology. The low likelihood of being identified and detained by law enforcement is likely driving the rise in the number of cybercrimes.

Over the course of several years, India has moved up the ranks on the corruption perception index (CPI) maintained by Transparency International.

India was ranked 85th in 2014, but it moved up to the 76th position in 2015 as a result of many efforts taken to combat white collar crimes. India moved up three spots to 78th rank on the list of 180 countries in 2018, according to a research published by The Economic Times. This is a gain of three points from India's position in 2017.

Along with issues related to poverty and health, India is a developing nation, and white-collar crime is quickly becoming a key contributor to the country's lack of progress. The recent rise in instances of white-collar crime in India is a risk to the overall progress of the country's economy.

These offenses call for prompt action on the part of the government, which must not only pass stringent laws but also ensure that they are carried out accurately.

Reasons for the growth of white-collar crimes in India:

The proliferation of white-collar crimes in India may largely be attributed to several factors, the most prominent of which being greed, intense competition, and a dearth of appropriate legislation designed to curb the commission of such offenses.


Blue-Collar vs. White-Collar Crimes

The numerous kinds of illegal endeavors that a criminal is able to participate in are what differentiates white-collar crime from blue-collar crime. Blue-collar crime is more common than white-collar crime.


Because the persons who commit blue-collar crime typically have fewer resources at their disposal, the crimes they commit, such as robbing, burglarizing, and so on, tend to be more direct. White-collar criminals, on the other hand, are more frequently in a position – such as being a loan officer in a bank – that allows them to commit vast and complex fraud schemes.



Types of White-collar Crime:

1. Fraud

The term "fraud" refers to a broad category that includes a variety of con tricks that are used to cheat people out of their money. The offer to send someone a large amount of money (for example, $10,000) if they will simply send the fraudster a small amount of money (for example, $300 -

the fraudster may describe the lesser number as being a processing or finder's fee) is one of the most popular and easiest to understand. The con artist will, of course, keep the money that is sent to him, but he will never send the money that he had previously promised to send.


2. Currency Schemes

These schemes, in their most fundamental expression, refer to the process of estimating the value of a currency at some point in the not-too-distant future. The valuation, on the other hand, does not take into account any hard evidence in its formulation.

According to a study titled "Trend and Progress of Banking in India" that was issued by the Reserve Bank of India and published by the Financial Express in January 2019, it was claimed that the banks lost a total of 41,168 crore rupees during the financial year of 2018.

This number indicates a 72 percent increase from what it was in 2017, and it demonstrates that the losses incurred by the banks continue to rise as a whole. The increase may be attributable to fraudulent schemes that target different kinds of currency. The research indicates that fraud has developed into a substantial issue as a consequence of a ninetieth percent increase in the number of occurrences of such cases found in the credit portfolios of financial institutions. The majority of fraudulent activity, according to the findings of the research, is centered in off-balance sheet operations, foreign exchange transactions, bank accounts, and cyber-security.


3. Insider trading

Insider trading is defined as any sort of trading that is conducted with the benefit of the trader possessing material, non-public information that provides them with an advantage in the financial markets.

For instance, a worker at an investment bank might be aware that Company A is getting ready to purchase Company B. This is something that might be common knowledge in the industry. It's possible that this is something that everyone already knows. The worker has the option of purchasing shares in Firm B with the presumption that the price of the company's stock would significantly increase once it is widely known that the company has been acquired. This is because the worker believes that the price of the stock will dramatically increase once it is widely known that the company has been acquired.


4. Money laundering

Criminals who handle significant sums of cash frequently require the services of those who specialize in money laundering.

It entails passing the cash through a number of different accounts before finally depositing it into legitimate businesses. Once there, the cash becomes intertwined with the genuine revenues of the legitimate business, at which point it can no longer be traced back to having originated from the commission of a crime.


5. Double-dipping

Once a victim, always a victim. Double-dipping is a swindle. First-time offenders might keep victims' information and pass it on to others, helping them commit fraud.

The first offender may phone you again, and you may vent about the initial deception. The scammer offers to return your money for a charge. Again, one loses money.

India Today produced a story in 2016 revealing the double dip scam in political parties, where politicians changed black money into white money for 40% fee. Political parties were brokering unreported wealth. In Ghaziabad, Noida, and Delhi, politicians converted black money into white.

Such situations when politicians engage in wrongdoing are prevalent since they have powerful positions with diverse abilities. They tend to manipulate things and generate illicit profits, which are money meant for public welfare. The average person suffers most.


Recent white collar crime cases in India

SEBI v. Burman Plantation and Others

The learned counsel representing SEBI argued in front of the High Court of Allahabad that the company is being wrongly accused because the company was not in a position to pay its debts, including payments to its investors.

The argument was based on the fact that the company was unable to pay its debts. When the advertisement that was handed out by the company was called into question, the council stated that the order was granted in 2004, when the company was not in a position to reimburse its obligations, and that the advertisement had been given out in 2003.

In addition, the amount of money that the investors asserted they had invested was not mentioned anywhere in the text. The primary argument provided by the attorney persuaded the lawmakers to enhance the term of imprisonment from one year to ten years and to boost the maximum amount of the fine, which can now reach 25 crores, by modifying the laws in accordance with section 24(1) of the SEBI Act. At long last, the accused, Ravi Arora, was found responsible for his actions.


Measures to curb white collar crimes

1. It is of the utmost importance that the most important investigative agencies in the country, such as the Central Bureau of Investigation, the Enforcement Directorate,

the Income Tax Department, the Directorate of Revenue Intelligence, and the Customs Department, be strengthened by the establishment of stringent regulatory policies. The Central Vigilance Commission ought to be responsible for keeping an eye on the activities of the officials who hold top positions and also for performing work-related checks on the officials' activities, with the goal of ensuring that the system is open and honest. This responsibility should be given in order to ensure that the system is open and honest.


2. As the means through which these types of white-collar crimes are committed advance, so too should the training of the officers responsible for investigating them.

It is common practice that aging officers, despite having sufficient experience to comprehend the nature and methods, are unable to make use of the technology for the purpose of following the suspect. This occurs when there is a lack of training. In light of this, it is imperative that each and every investigating officer receives training in such a way that it equips them with the skills necessary to efficiently solve any case, regardless of how convoluted it may be.


3. It is of the utmost importance to include tough regulations into the system in order to eradicate the occurrence of crimes of this nature. The reduced severity of the punishment, both in terms of the amount of the fee and the length of time spent in jail, encourages criminals to continue their behavior.

4. In order to expeditiously resolve these matters, special courts and tribunals operating on a fast track should be established over the entirety of the country. A person who has been found guilty should be able to be sentenced to either a financial penalty or incarceration by the tribunal. White-collar crime would experience a lower rate of occurrence as a result of these actions.


5. In order to raise awareness regarding white collar crimes, both electronic and print media should be employed in the most effective manner possible. The general public needs to be educated about these types of crimes and made aware of the fact that they can happen anywhere, from a humble eatery to a large global corporation. Additionally, students need to be aware of the possible solutions that are available to them in the event that they become victims of such crimes.

6. Criminals who conduct these types of offenses should be subject to stringent legislation, a heavy punishment, and a lengthy prison sentence. Also, in order for this to take place, the Indian Penal Code from 1860 needs to be revised so that it includes provisions for white-collar offenses. For instance, the International Criminal Code may have a special chapter devoted to "white collar" offenses..


7. It is important to make use of both internet and print media in the most efficient way possible in order to accomplish the goal of increasing people's knowledge of white-collar crimes. The entire public has to be taught about these types of crimes and made aware of the fact that they may happen anywhere, from a modest diner to a huge worldwide organization. In addition, the general public needs to be made aware of the fact that these types of crimes can happen anywhere.

In addition, students have a responsibility to educate themselves on the many options for redress that are open to them in the event that they become victims of such crimes.


CONCLUSION

Crimes committed by professionals and carried out without the use of physical force are known as "white collar crimes." Despite their lack of lethality, white collar criminals frequently seek control or a sense of entitlement in their victims. These crimes are also committed by subordinates who are paid low, while the mastermind behind them is typically a wealthy person who holds a high social rank. White collar crimes are frequently motivated by peer pressure or the ethos of the company.

The rate of criminal activity has been shown to increase in tandem with both the modernization of our culture and the advancement of technology around the world. The rate of white-collar crime has skyrocketed. These crimes are widespread, from medicine to education. Online fraud is also rising. Crimes and corruption have hindered India's economic growth as a developing nation. Investigators require training to learn how to track down criminals, else it's a difficult, time-consuming job. As white collar crimes are perpetrated by those with higher social status, the investigating officers' actions should be reviewed to maintain openness.

Government must pass stringent legislation to reduce such crimes. The system should have rigorous laws for punishing the accused and quickly resolve most cases. If not, people would lose faith in the system because these crimes are perpetrated by role models. The media can help reduce white-collar crime. Most white-collar crimes are unreported. If the media becomes more active in publicizing frauds and scams at higher levels and revealing how people in higher positions in a corporation use their powers arbitrarily, this will assist in reducing the occurrence of white collar crimes.


References

  1. https://shodhganga.inflibnet.ac.in/bitstream/10603/43935/8/08_chapter%202.pdf

  2. Para 4; A.I.R. 1987 SC 1321

  3. 1964 A.I.R. 295 SCR (4) 224

  4. Anosh Ekka v. Central Bureau of Investigation

  5. Arun Kumar Mishra v. Directorate of Enforcement

  6. People v. Fort , 138 Mich. App. 322 (Mich. Ct. App. 1984)

  7. SEBI v. Burman Plantation and Others, (2013)

  8. Abhay Singh Chautala v. C.B.I., (2011)

  9. Binod Kumar v. State of Jharkhand and Others, (2011)

  10. D.K. Gandhi v. M. Mathias, 6th August, 2007

  11. Jacob Mathew v. State of Punjab, (2005) 6 SCC 1 (para 18)

  12. Galaxy Nirmaan Pvt. Ltd. v. Acit, new Delhi, 19th May, 2017

  13. Emperor v. Kanayalal Mohanlal Gujar, (1939) 41 BOMLR 977



This article is written by Vidhisha Agrawal of SVKM NMIMS Navi Mumbai.

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