WHITE COLLAR CRIME

DEFINITIONAL EVOLUTION OF WHITE-COLLAR CRIME

• This thought evolved with the Criminologist and Sociologist Edwin H. Sutherland, in the year 1939
who popularized the term white collar crimes by defining such a crime as one committed by a
person of respectability and high social status in the course of his occupation.

• Sutherland also included crimes committed by corporations and other legal entities within his
definition. Sutherland ‘s study of white-collar crime was prompted by the view that criminology
had incorrectly focused on social and economic determinants of crime, such as family background
and level of wealth.

• It is true to the common knowledge that there are certain professions, which offer lucrative
opportunities for criminal acts, and unethical practices, which are very often, overlooked by the
general mass of the society. There have been crooks and unethical persons in business, various
other professions, who tend to become unscrupulous because of no reason apart from the thirst of
gaining more and more for themselves.

• These deviants have least regard for ethical and moral human values. Therefore, they carry on their
illegal activities with impunity without the fear of loss of respect and prestige. These crimes are of
the nature of white-collar crimes’, which is the essential outcome of the development of the
competent economy of the twenty-first century.

• With the advent of technology and growth of education, white-collar crimes are on the rise, being
protected by professionals finding loopholes in the judiciary and support from the government
indirectly.

• This has created a nexus where people from almost all walks of life have started forming group to
do white collar crimes and being protected by professionals in law.

• This has lead to a situation where the small timers have become white-collar criminals. Talking
about the prevalence of white-collar crimes in India, they are spreading like a rapid fire in every
sphere of society.

• Though corruption, one of the species of white-collar crimes, has been the most talked about issue
in all spheres-social, economic and political, not much stringent steps/actions have been taken to
curb this menace.
 • According to Prof. Sutherland it is “crime committed by persons of respectability and high social
status in the course of their occupation”. Further improvements were done and redefined as “a
person of the upper socio-economic class who violates the criminal law in the course of his
occupational professional activities”.

• Thus, misrepresentation through fraudulent advertisements, infringement of patents, copyrights and

trade-marks etc, are frequently resorted to by manufacturers, industrialists and other persons of
repute in course of their occupation with a view to earning huge profits. He pointed out that these
types of crimes are more dangerous to the society than ordinary crimes because the financial loss
to society is far greater than the financial loss from burglaries, robberies, etc. His definition touches
only in a limited area and is very restrictive, as it does not include crimes outside a person’s
occupation.

• Herbert Edelhertz defines it as “an illegal act or series of illegal acts committed by neo-physical
means and by concealment or guile, to obtain money or property, to avoid the payment or loss of
money or property or to obtain business of personal advantages”’

• According to Paul M.Whisenand they are, illegal acts characterized by quite, deceit and
concealment’ and are not dependent upon the application of physical force or violence or trends
thereof. Further, they may be committed by individuals acting independently or by those who are
part of a well- planned conspiracy.

• The objective usually is the obtaining of money, property or services; avoiding the payment or loss
of money; Property or services; or securing the business or personal advantage.”

• “White collar criminality in business is expressed most frequently in the form of misrepresentation
in financial statements of corporations, manipulation in the stock exchange, commercial bribery,
bribery of public officials directly or indirectly in order to secure favourable contracts and
legislation, misrepresentation in advertisements and salesmanship, embezzlement of funds in
receivership and bankruptcies. These are what Al Capone calls “the legitimate rackets”. These and
many others are found in abundance in the business world”.

CAUSES OF WHITE-COLLAR CRIME

Greed

• The father of modern political philosophy, Machiavelli, strongly believed that men by nature are
greedy. He said that a man can sooner and easily forget the death of his father than the loss of his
 inheritance. The same is true in the case of commission of white-collar crimes. Why will a man of
high social status and importance, who is financially secure, commit such crimes if not out of greed?

Easy, swift and prolong effect

• The rapid growing technology, business, and political pressure has introduced the criminals to
newer ways of committing white collar crimes. Technology has also made it easier and swifter to
inflict harm or cause loss to the other person. Also, the cost of such crimes is much more than other
crimes like murder, robbery or burglary, and so the victim would take time to recover from it. This
would cut down the competition.

Competition

• Herbert Spencer after reading ‘On the Origin of Species’ by Darwin, coined a phrase that evolution
means ‘survival of the fittest’. This implies that there will always be a competition between the
species, and the best person to adapt himself to the circumstances and conditions should survive.

Lack of stringent laws

• Since most of these crimes are facilitated by the internet and digital methods of transfer payments,
laws seem reluctant to pursue these cases as investigating and tracking becomes a difficult and
complicated job. Why it becomes difficult to track it is because they are usually committed in the
privacy of a home or office thereby providing no eyewitness for it.

Modern technology

• With modern technology ease of business is one of its expectations, in a sense, it also applies to
white-collar crimes which have allowed them to reach out to a larger number of people and commit
large scale crimes without being noticed by the law. Many have fallen victim to different scams
such as the credit card scam, moreover, the pandemic opened up a new market for them by
exploiting the medical field and creating a black market for Covid medications such as
“Remdesivir” and over a hundred cases were lodged against the illegal sales and use of this
medicine and in most cases, the Doctors and Hospital staff were involved. The need and greed of
people have driven them to the extent of exploiting any possible field.

Lack of awareness

• The nature of white-collar crimes is different from the conventional nature of crimes. Most people
are not aware of it and fail to understand that they are the worst victims of crime. People who are
victims of these crimes fail to comprehend the notion of the crime and understand the exact offence
 which has been committed and whom to approach or lodge a complaint against because most of
the time it involves a large corporation and there may be little or no evidence to essentially produce
a criminal and in certain crimes such as scam or fraud people may not even realise that they have
fallen victim to a crime such as a bank fraud where yearly there are over thousand cases registered.
And in a scam, such as a double-dip scam the victim may fall prey again because the information
of the victim is stored and passed on to another scammer. Especially in metropolitan cities these
cases are rising but we lack the awareness to become victims of such crimes, a wider reach is
required and awareness campaigns by the government may help people understand the severity of
these crimes and the loopholes these criminals use and may help reduce the rate of white-collar
crimes in future.

TYPES OF WHITE – COLLAR CRIMES

Bank Fraud

Fraud is a crime committed with an intention to deceive and gain undue advantage. Bank Fraud is
a fraud committed on the banks. It is committed by the fraudulent companies by making fake
representations. It is also related to the manipulation of the negotiable instruments like cheque bouncing,
securities, bank deposits etc. Bank fraud is concerned to the public at large because there is a relation of
trust between the banks and the public. It is the most common type of white-collar crime and also a corporate
crime. It harms public as well as the government of the country.
Bribery

Bribery is also a very common type of white-collar crime. By bribery we mean giving money or
some goods to the person at a high position in return of a Favor. In simple words bribery is when one man
gives money to the other which is in authority. It is done for the purpose of insisting him to do something
or to prevent him from doing something. It is the most common income of most of the public officials of
our country.

Cybercrime

Cybercrime is the biggest cause leading to this type of crime in India. It is the latest problem
prevailing in the cyber world. Cybercrime is the crime which is related to ‘computer networks. With the
rapid increase of advancement of technology there is also a rapid increase in the crime related to the
technology. Cybercrime involves the persons who are expert in computer related technology. And it is
committed against the victim directly or indirectly to cause a harm to his reputation or to harm in physical
or mental way using internet, networks and other technological sources.
Money Laundering

Money laundering is a crime in which the criminals disguise the identity of the money. In this
crime, criminals try to hide the original ownership of the money and the place where they obtained that
money by illegal means. Laundering is done with the intention of making that money came from legal
sources. In simple words money laundering means to show the illegitimate money as legal money. For
instance, if a person obtain money from black marketing, trafficking of illegal goods the money will be
considered ‘dirty’ and he cannot deposit into the banks as it may seem suspicious if he directly deposits
money into the financial institutions because he had to create statements and records stating that where the
money came from. Money laundering involves three steps;

• Firstly, the owner of the money obtains the money from some illegal means and deposit into the
bank by some way.

• Then through multiple transactions the transfer of money is being done.

• They return the money into banks to make it legitimate.

Tax Evasion

Tax evasion is committed with an intention to conceal one’s actual taxable income and one’s
original position to the authorities. This concealment of income is done to reduce the tax liability in the
eyes of government. In simple words it means to hide the money obtained from the illegal means in order
to reduce one’s liability to pay tax and to show low income to the tax authorities. Tax evasion has a negative
impact on the social values as it demoralized honest tax payers and they might also want to do tax evasion
also it gives economy power in the hand of few undeserving people.
Identity Theft

Identity theft is one of the easiest types of crime these days. Due to advancement of technology, it
is very easy to access personal information of anyone. Identity theft is the crime in which the criminal
access unauthorized information such as name, address, phone number etc. and use this information to gain
money. In simple words identity theft is committed by using some other person identity to commit fraud or
to gain money by illegal means.

CHARACTERISTICS OF WHITE – COLLAR CRIME

• white-collar crimes are committed by people who are financially secure and perform such
illegal acts for satisfying their wants. These crimes are generally moved by the greed of the
people.

• Poverty is considered as a major cause for underdevelopment in India. Poverty is a cause for
financial and physical the duress among the major chunk of population. Since people are so much
in need of money, they easily get attracted by the false representations made to them. They forget
to look into the veracity of the representations being made to them.

• The gravity of white-collar crimes is more intense than other traditional crimes. White collar crimes
cause one great loss at all levels, i.e., financial, emotional, etc. Corporate mishaps, like false
pharmaceutical tests, costs more lives than the crime of murder.

• With the advancement in technology, faster growth rate of industries and business, and political
pressure have introduced the offenders to newer, easier and swifter methods of committing such
crimes.

• With the introduction of the people to the internet and digital world, where big transactions take
place within seconds and where reaching out people from all over the world is a matter of few
minutes, criminals have got an incentive to commit more crimes and hide anywhere in the world.

• Our law enforcement agency also become reluctant to deal with such crimes as these cases are very
complicated and tracing a suspect is a difficult job. The investigation in case of white-collar crimes
is much more consuming than that in traditional crimes.

• Even when the offender of the white-collar crime has been caught, the judiciary fails to punish
them. The major reasons behind the failure to hold these criminals accountable for their wrongful
acts are:

• The legislators and the ones implementing the laws belongs to the same group or class to which the
offender belongs and therefore land up assisting these criminals instead of taking actions against
them.

• The investigating officers put in less effort in doing their job as they are not able to connect the
small evidences that they get. And despite efforts they don’t get major evidences in such cases as
everything is done online and tracing things or person becomes difficult.

• We don’t have laws on such types of crime and therefore offenders are left free. In many cases due
to loopholes in law, it becomes favourable to the offenders.
 • The existing laws do not provide stringent punishment that would prevent people from being
involved in such types of crimes. The suspects do not have any incentive to not participate in these
types of crime.

SOCIO – ECONOMIC OFFENCES IN INDIA

• The idea of socio-economic offences in India outlined in India’s 47th Law Commission Report is
critical. According to the study, socioeconomic crimes are social offences that have an impact on
the health, morals, social, or overall well-being of the community as a whole, rather than just the
individual victim. Economic offences are those that are harmful to society’s economy and
endanger not only individual money but the entire economic structure of a country. White-
collar crimes are perpetrated by members of the affluent and well-to-do classes.

• A socio - economic offence, on the other hand, maybe committed by anybody. Socio-economic
offences not only broaden the scope of white-collar crime as understood by Sutherland and
acknowledged by others, but also have broader implications.

SANTHANAM COMMITTEE REPORT 1964

• The Santhanam Committee on Corruption, established in 1964, merited recognition for its
extensive investigation work and recommended report. The committee’s name, Ministers, members
of Parliament, and state legislatures were expressly mentioned in his code of behaviour for anyone
in positions of power, authority, or trust in our society. There should be no use of position for
personal or family gain, no activities driven by party, religion, caste, or community concerns, and
no unofficial dealings with businessmen or hospitality or gifts taken from them or other private
individuals.

• In India, the 29th Law Commission Report recommended that the Santhanam Committee Report
of 1964 be considered. According to the committee report, the Penal Code does not deal
satisfactorily with activities that may be regarded as social offences due to the particular conditions
under which they are committed and which have now become a dominating characteristic of some
strong parts of modern society. Two characteristics could be seen in the majority of the detected
offences: pecuniary advantage and unjust enrichment. It proposed that a new chapter be added to
the IPC to deal with socio-economic offences.

• Later, in the 47th Law Commission Report, a new composite category of socio-economic offences
was established. The three primary types are unlawful economic operations, illegal commercial and
related transactions, and avoidance of public taxes or monetary responsibilities. The notion of
 socio-economic crimes is highly significant in the Report, and the prominent aspects of these
violations are explored in detail.

FEATURES OF SOCIO – ECONOMIC OFFENCES

• Motive - Unlike traditional crimes, the act of committing the crime is motivated by extreme greed
or a desire for riches.

• Emotion - Whereas typical crimes are committed for emotional reasons, these sorts of offences
have no emotional basis or relationship between the victim and the perpetrator.

• Target victim - In most cases, the victim is the state or a group of individuals, most notably those
who are consumers of particular goods or services, shareholders or holders of other assets, and so
on.

• Mode of operation - The primary motivator for committing such a crime is deception, not coercion.

• Mental element - Such offences are generally committed on purpose.

• Protected interest

• The preservation of individual members’ property, money, or health, as well as national

resources, as well as the broader economic system as a whole, from exploitation or waste
by people or organizations, is a social interest.

• Social interest in increasing the country’s wealth through implementing rules governing
taxes and dues, foreign exchanges, international business, and the like.

CATEGORIES OF SOCIO – ECONOMIC OFFENCES IN INDIA

• Actions planned and carried out to impede or inhibit the country’s economic development and
health,

• Income tax evasion,

• Misuse of position and authority by public officials, which is most likely to result in corruption,

• All offences including breach of contract and delivery of goods that do not meet the requirements
as promised,

• All black marketing and hoarding-related actions,

 • Activities involving food and medication adulteration. Misappropriation and theft of government
property and finances,

• The activities associated with the trafficking of licenses, permits, and so forth.

CAUSES OF SOCIO – ECONOMIC OFFENCES

• Industrial revolution: The transition from an agricultural to an industrialised country brought

Sabout changes in the country, which resulted in offences shifting their pace from traditional to
these new ones.

• World War II: Post-war conditions in the countries were deplorable, resulting in alterations in the
regular functioning of society. As a result, new practices gave rise to new offences.

• Business: When new firms began to develop in the country, it generated a sense of intense
competition among them. Everyone wanted to outdo each other in any way possible.

• Technology: One of the factors that influenced our country’s preference for beer is also to blame
for such offences. The rise of technology and scientific advancements has resulted in a decline in
faith in the almighty.

• Lack of morals: As people’s dread of the ultimate judgment or the world beyond all humanly things
faded, so did their morals and ethics. As a result, there has been a rise in deception and greed and
thirst for worldly satisfaction.

• Laissez-faire: The state opted to leave things alone, and the absence of public discontent resulted
in serious consequences that are now visible in our country. However, with appropriate research
and attention, these crimes in the country may be controlled.

• Absence of intense and coordinated public resentment.