Comparative Analysis of White Collar Crime across

different jurisdiction (India,US,UK)

(Case Analysis & Assignment)

SUBMITTED BY : Aiswarya Nanda

REG. NO. 2141801008
BBA LLB(H) - A

SUBMITTED TO: Ms. Annwesha Nayak

SIKSHA ‘O' ANUSANDHAN

(Deemed to be University)
INTRODUCTION :

White-collar crime, a term coined by sociologist Edwin Hardin Sutherland in 1939, refers to
financially motivated, non-violent crimes committed by individuals or organizations for personal
gain. These crimes, often complex and sophisticated, pose significant challenges for detection,
investigation, and prosecution. The global nature of white-collar crime necessitates a
comparative analysis of its prevalence, types, and enforcement across different jurisdictions.

This assignment undertakes a comprehensive comparative analysis of white-collar crime in

India, the United States, and the United Kingdom. These countries, representing diverse legal
systems and economic contexts, provide a rich framework for examining the complexities of
white-collar crime.

India, with its rapidly growing economy and increasing globalization, faces unique challenges in
addressing white-collar crime. The US, with its well-established legal framework and robust
enforcement agencies, offers valuable insights into effective strategies for combating
white-collar crime. The UK, with its comprehensive legislation and emphasis on corporate
liability, provides a distinct perspective on addressing the complexities of white-collar crime.

This comparative analysis will explore the historical context and evolution of white-collar crime
legislation in each country, examining the similarities and differences in their approaches. It will
delve into the role of investigative agencies, penalties, and sentencing guidelines, as well as the
concept of corporate liability. By examining the strengths and weaknesses of each jurisdiction's
approach, this study aims to identify best practices and areas for improvement in combating
white-collar crime.

Through this comparative analysis, we can gain a deeper understanding of the global nature of
white-collar crime and develop effective strategies for prevention and prosecution. This research
will contribute to the development of a safer and more secure business environment, ultimately
promoting economic growth and stability.1

White-collar crime has emerged as a significant concern globally, with its complex and
sophisticated nature posing substantial challenges for detection, investigation, and prosecution.
This comparative analysis delves into the prevalence, types, and enforcement of white-collar
crime in India, the United States, and the United Kingdom, providing an in-depth examination of
the legal frameworks, investigative agencies, penalties, and corporate liability in each
jurisdiction.

1
White-collar crime. Corporate Finance Institute. (2023b, October 8).
https://corporatefinanceinstitute.com/resources/esg/white-collar-crime/#:~:text=White%2Dcollar%20crime
%20is%20a,commands%20well%20above%20average%20compensation.

1
The study explores the historical context and evolution of white-collar crime legislation in each
country, highlighting the similarities and differences in their approaches. It examines the role of
investigative agencies, such as the Central Bureau of Investigation (CBI) in India, the Federal
Bureau of Investigation (FBI) in the US, and the Serious Fraud Office (SFO) in the UK, in
detecting and prosecuting white-collar crimes.

The research also analyzes the penalties and sentencing guidelines for white-collar crimes in
each jurisdiction, including imprisonment, fines, and restitution. Furthermore, it investigates the
concept of corporate liability, exploring how companies can be held criminally responsible for
offenses committed by employees.

Through a comprehensive review of literature, case studies, and expert opinions, this study aims
to identify best practices and areas for improvement in combating white-collar crime. It
emphasizes the need for international cooperation, information sharing, and harmonization of
laws to effectively address the global nature of white-collar crime.

By providing a comparative analysis of white-collar crime across different jurisdictions, this

study contributes to the development of effective strategies for preventing and prosecuting
white-collar crime, ultimately promoting a safer and more secure business environment globally.

2
White collar crime in india :

White-collar crime in India has become one of the biggest concerns in recent years. With the
country's rapid economic growth and increasing globalization,people are coming under financial
pressure which is leading to commission of such crimes. Here's a look at white-collar crime in
India:

Types of White-Collar Crimes:

1. Corruption: Bribery, embezzlement, and nepotism are prevalent in India, with corruption
affecting various sectors, including government, business, and healthcare.

2. Fraud: Financial fraud, including bank fraud, credit card fraud, and insurance fraud, is on the
rise in India.

3. Cybercrime: With increasing digitization, cybercrimes like hacking, phishing, and identity
theft are becoming more common.

4.Money Laundering: India's complex financial system and lack of efficient regulation make it
vulnerable to money laundering.

5. Corporate Crime: Corporate fraud, insider trading, and tax evasion are significant concerns
in India's business sector.2

Causes of White-Collar Crime in India:

1. Lack of Effective Regulation:

Insufficient laws and regulations, along with poor enforcement, makes an environment lead to
white-collar crime.

2. Corruption: Widespread corruption due to the greed of people lead to WCC

3. Economic Pressure: Financial problems and pressure to perform can lead individuals to
engage in white-collar crime.

4. Lack of Transparency: Inadequate financial systems and lack of transparency make it hard
to stop WCC
2
White collar crime: Detail study. Legal Service India - Law, Lawyers and Legal Resources. (n.d.).
https://www.legalserviceindia.com/legal/article-530-white-collar-crime-detail-study.html#:~:text=Common
%20Types%20Of%20White%20Collar%20Crime%20In%20India%3A,companies%20by%20making%20f
ake%20representations.

3
Effects of White-Collar Crime in India:

1. Effect on the company: WCC cause huge loss to companies.In order to recover the loss,these
companies eventually raise the cost of their products which decreases the no. of customers for
that product.

2. Effect on employees: WCC endangers employees,they become conscious of their working

condition and think whether it's safe to work or not

3. Effect on customers: the most imp. Customer is whether the products which they are using
are safe or not 3

4.Effect on the society: WCC are harmful to the society for those people who should be cited as
a moral example and must behave responsibly are ones committing crimes .

Measures to Prevent and Control White-Collar Crime in India:

Strengthening Laws and Regulations: India must have strong laws and regulations which
must be strictly enforced in order to stop WCC

Improving Enforcement: Increasing the capacities of investigative agencies, such as the

Central Bureau of Investigation (CBI) and the Enforcement Directorate (ED).

Increasing Transparency: Increasing transparency in financial transactions and business

dealings.

Public Awareness: Educating the people of the country about the financial losses the country
faces due to the commission of such crimes

International Cooperation:
Collaboration with international agencies or contacting the external corpora can decrease White
Collar crimes.4

Examples of White Collar Crimes in India:

3
Asthana, S. (2022, February 3). White Collar Crimes:a detailed study of its types and its detrimental
effects. iPleaders. https://blog.ipleaders.in/white-collar-crimes/
4
Admin. (2024, April 29). White collar crime. White Collar Crime.
https://www.tookitaki.com/glossary/white-collar-crime

4
1. Satyam Scandal (2009): Ramalinga Raju, founder of Satyam Computers, admitted to
falsifying accounts and overstating profits by $1.5 billion.5

2. Coal Allocation Scam (2012):

Government officials and companies were involved in a scandal where coal blocks were
allocated without proper bidding, causing a loss of $33 billion.

3. Vijay Mallya Fraud Case (2016): Vijay Mallya, owner of Kingfisher Airlines, was accused of
defaulting on loans worth $1.4 billion and diverting funds for personal use.

White Collar Crime in US:

White-collar crime, a term coined by sociologist Edwin Sutherland in 1939, refers to financially
motivated, non-violent crimes committed by individuals, businesses, or government officials.
Typically, these crimes involve deceit, concealment, or violation of trust and are committed in
order to achieve financial gain. The scope and impact of white-collar crime in the United States
are vast, affecting individuals, corporations, and the economy at large. This essay delves into the
nature, types, causes, consequences, enforcement, and notable cases of white-collar crime in the
United States.

1. Nature and Definition of White-Collar Crime

White-collar crime is defined by its non-violent nature and association with high social status
and respectability. Unlike street crimes that often involve physical aggression or theft,
white-collar crimes are characterized by deceit and are usually committed in occupational
settings. They can include a wide range of illegal activities, such as fraud, embezzlement, insider
trading, money laundering, bribery, identity theft, and cybercrime. The primary goal of
white-collar crime is financial gain, achieved through manipulation or exploitation of the trust
that society places in individuals or organizations.6

2. Causes of White-Collar Crime

Greed and Financial Pressure:

5
Raj, P. (2024, July 19). Top white collar crime cases in India. Vakilsearch.
https://vakilsearch.com/blog/top-white-collar-crime-cases-in-india/
6
FBI. (2016, June 13). What is white-collar crime, and how is the FBI combating it?. FBI.
https://www.fbi.gov/about/faqs/what-is-white-collar-crime-and-how-is-the-fbi-combating-it#:~:text=White%
2Dcollar%20crime%20is%20generally,laundering%2C%20to%20name%20a%20few.

5
Individuals and corporations may commit white-collar crimes to achieve financial success or out
of greed. The pursuit of wealth, power, and status can drive unethical behavior, especially when
individuals face financial pressures or economic downturns.

Opportunity and Access: White-collar crimes are often committed by individuals who have
access to sensitive information, financial accounts, or other assets. The lack of strict oversight or
internal controls within organizations can create opportunities for such crimes.

Rationalization: Many white-collar criminals rationalize their actions by believing that their
behavior is not truly criminal, that it is a victimless crime, or that they deserve the rewards for
their efforts. This mindset allows them to justify their unethical behavior.

Lack of Effective Enforcement: In some cases, white-collar crime persists due to inadequate
enforcement or the perception that the legal system is lenient on such crimes. This can embolden
criminals to engage in illegal activities, believing that they are unlikely to be caught or punished
severely.7

3. History of White collar Crime:

Here's a brief history of white-collar crime in the US:

Early Years (1800s-1920s):

Embezzlement and fraud were common in the early days of American business.
Robber barons like Andrew Carnegie and John D. Rockefeller were accused of unethical
business practices.

Great Depression and New Deal (1929-1941):

The stock market crash of 1929 led to increased regulation of the financial industry.
The Securities Exchange Act of 1934 established the Securities and Exchange Commission
(SEC).

Post-War Era (1945-1970s):

White-collar crime increased with the growth of the US economy.

7
White collar crime - definition, what is white collar crime, advantages of white collar crime, and latest
news. cleartax. (n.d.). https://cleartax.in/glossary/white-collar-crime

6
Cases like the "Salad Oil Scandal" (1963) and the "Penn Central Railroad Scandal" (1970)
highlighted corporate fraud.

Deregulation and Corporate Scandals (1980s-1990s):

Deregulation of industries like finance and energy led to increased white

4. Authorities :

Department of Justice (DOJ): This department ensures easy access to justice and within less
period of time.

Federal Bureau of Investigation (FBI): It investigates the criminal cases which are violating
the US laws.They provide other services like fingerprinting,training etc. to the other enforcement
agencies.

Securities and Exchange Commission (SEC): Regulates and enforces laws against securities
fraud, insider trading, and market manipulation.

Commodity Futures Trading Commission (CFTC): Oversees fraud and manipulation in

commodity and protects the customer funds and lowers the risk of the customers.

Internal Revenue Service (IRS) - this the authority for Investigation of tax evasion, money
laundering, and provide assistance to American tax payers.

Financial Crimes Enforcement Network (FinCEN): This authority investigates,enforces

regulations and charges penalties on the people who doesn’t obey the laws .8

In the US, the Securities and Exchange Commission (SEC) and the Racketeer Influenced and
Corrupt Organizations Act (RICO) play crucial roles in combating white-collar crime:

4.United State Systems :

SEC:

Regulates securities markets

Enforces securities laws
Protects investors
8
The surest way to legal research!TM. SCC Online®, Legal Research Solution. (n.d.).
https://www.scconline.com/?gad_source=1&gclid=Cj0KCQjw_sq2BhCUARIsAIVqmQtJ4IVoyjd-1evPPIhg
PAlP8SBRnIiPbRW3d4ysj9oWrZn8D4igNVoaAjxWEALw_wcB

7
Investigates and prosecutes securities fraud
Imposes penalties and sanctions

RICO:

Targets organized crime and corruption

Prohibits racketeering activity
Allows for civil and criminal penalties
Enables prosecution of individuals and organizations
Provides for treble damages and attorney fees

Relationship between SEC and RICO:

SEC investigations can lead to RICO charges

RICO can be used to prosecute securities fraud
SEC and RICO statutes can be used in conjunction
RICO's broader reach can help SEC tackle complex cases

6. Notable White-Collar Crime Cases in the U.S.

Several high-profile WCC cases have shaped public perception and legal responses:

Enron Scandal (2001): Enron, once a leading energy company, engaged in widespread
accounting fraud to hide its financial losses. The scandal led to the company’s bankruptcy, the
dissolution of its accounting firm Arthur Andersen, and the conviction of key executives.

Bernie Madoff Ponzi Scheme (2008): Bernie Madoff orchestrated one of the largest Ponzi
schemes in history, defrauding investors of an estimated $65 billion. Madoff’s scheme unraveled
during the 2008 financial crisis, leading to his arrest and a 150-year prison sentence.

7. Future Trends and Challenges

White-collar crime continues to evolve with changes in technology, business practices, and the
global economy. Emerging trends include:

Cybercrime and Data Breaches: As technology advances, so do opportunities for cybercrime.

Data breaches, ransomware attacks, and online fraud are likely to increase, posing new
challenges for law enforcement and cybersecurity experts.

8
Globalization and Cross-Border Crime: The global nature of business and finance means that
white-collar crime can have international dimensions. Coordinating enforcement efforts across
borders is crucial to combating money laundering, tax evasion, and other crimes.

Artificial Intelligence and Automation: The use of AI and automation in financial systems
could lead to new forms of white-collar crime, such as algorithmic trading fraud or exploitation
of automated decision-making processes.

White collar crime in UK :

1.History of White collar crime in UK

Early Years (1800s-1945)

White-collar crime existed in the UK during the 19th and early 20th centuries, with cases of
fraud and embezzlement
The Larceny Act (1861) and the Forgery Act (1861) were passed to address property crimes,
including white-collar offenses
The UK's first insider trading laws were introduced in the Companies Act (1929)

Post-War Era (1945-1980s)

White-collar crime increased in the UK during the post-war period, with cases like the "Guinness
Share Trading Scandal" (1986)
The Prevention of Fraud (Investments) Act (1958) and the Companies Act (1967) aimed to
prevent and prosecute white-collar crime
The UK's first regulatory body, the Securities and Investments Board (SIB), was established in
1985

Big Bang and Deregulation (1980s-1990s)

The "Big Bang" deregulation of the financial industry in 1986 led to increased white-collar crime
Cases like the "Barings Bank Collapse" (1995) and the "Robert Maxwell Scandal" (1991)
highlighted corporate fraud and embezzlement
The Financial Services Act (1986) and the Companies Act (1989) aimed to strengthen regulation
and enforcement

Modern Era (2000s-present)

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The UK's regulatory framework was reformed with the establishment of the Financial Services
Authority (FSA) in 2000
The FSA was replaced by the Financial Conduct Authority (FCA) and the Prudential Regulation
Authority (PRA) in 2013
Cases like the "Libor Scandal" (2012), "HSBC Money Laundering Scandal" (2012), and "PPI
Mis-Selling Scandal" (2011) continue to highlight the need for effective regulation and
enforcement

2.Authorities of WCC in UK:

Serious Fraud Office (SFO): Investigates serious frauds and corruption in UK by delivering
justice to the victims of WCC

Financial Conduct Authority (FCA): Ensures that the financial services firms and individuals
carrying out businesses are not engaged in ang frauds. It provides protection to customers by
promoting healthy competition.

National Crime Agency (NCA): It Investigates and serious crimes, including white-collar
crime.Their main objective is to investigate the cases of serious crimes.

HM Revenue & Customs (HMRC) :It is a department of UK which collect taxes from people to
fund the UK’s public services.

Crown Prosecution Service (CPS): It helps the SFO, FCA, and other agencies to investio the
cases of White Collar Crime.

Financial Reporting Council (FRC) : Regulates auditors, accountants and investigates the cases
of corporate fraud and accounting irregularities and ensures binding with the accounting and
legal requirements.9

Police Economic Crime Units: Many police forces in the UK have dedicated economic crime
units that investigate and prosecute white-collar crime.

These authorities work together and cooperate with each other to investigate and prosecute
white-collar crime in the UK, and often collaborate with international agencies to deal with the
cases across differ borders.

9
White Collar Crime explained: Lawyers - Solicitors: London. White Collar Crime Explained | Lawyers -
Solicitors | London. (n.d.). https://www.rahmanravelli.co.uk/expertise/white-collar-crime/

10
3.Notable White Collar Crimes in UK:

Robert Maxwell Scandal (1991): Media mogul Robert Maxwell embezzled £440 million from
his companies' pension funds.

Guinness Share Trading Scandal (1986): Four businessmen were convicted of manipulating
Guinness shares, leading to a £100 million loss.

Libor Scandal (2012): Banks manipulated the London Interbank Offered Rate (Libor), leading to
a £6 billion fine.

Tesco Accounting Scandal (2014): Tesco overstated profits by £263 million, leading to a £129
million fine.

Carillion Accounting Scandal (2018): Carillion's accounting practices were criticized, leading to
the company's collapse and a £6.4 billion debt.10

Comparative analysis:

Similarities:

Prevalence: White-collar crime is a significant problem in all three countries.

Types of crimes: Fraud, embezzlement, bribery, and corruption are common in all three
countries.
Impact: White-collar crime has severe economic and social impacts in all three countries.

Differences:

India:

Corruption: Corruption is a significant issue in India, with a high corruption perception index
(CPI) score.
Lack of enforcement: Weak enforcement and inadequate laws contribute to the prevalence of
white-collar crime.
Growing economy: India's growing economy and increasing globalization create opportunities
for white-collar crime.

10
Morandin, P. (2022, October 25). Top 10 white collar corporate crimes. Criminal Defence Lawyers
Australia.

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US:

Sophisticated crimes: The US experiences sophisticated white-collar crimes, such as Ponzi

schemes and insider trading.
Strong enforcement: The US has strong enforcement agencies, such as the SEC and FBI, to
combat white-collar crime.
High-profile cases: The US has seen high-profile white-collar crime cases, such as Enron and
Madoff.

UK:

Financial hub:The UK is a global financial hub, making it vulnerable to white-collar crime.

Regulatory framework: The UK has a robust regulatory framework, with agencies like the FCA
and SFO.
Cross-border crimes: The UK experiences cross-border white-collar crimes, such as money
laundering and terrorist financing.11

Comparison of statistics:

India: Estimated annual loss due to white-collar crime: ₹50,000 crores (approximately $7 billion
USD)
US: Estimated annual loss due to white-collar crime: $300 billion
UK: Estimated annual loss due to white-collar crime: £144 billion (approximately $190 billion
USD)

11
White collar crime: Unraveled. (n.d.-d). https://www.ijcrt.org/papers/IJCRT2305106.pdf

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CONCLUSION:

In conclusion, the comparative analysis of White-Collar Crime (WCC) across India, the US, and
the UK reveals a complex landscape of similarities and differences. While all three countries face
significant challenges in combating WCC, India struggles with corruption, the US grapples with
sophisticated schemes, and the UK navigates the complexities of its financial hub. Despite these
differences, common threads emerge, including the need for enhanced international cooperation,
robust regulatory frameworks, effective prevention and detection measures, and public
awareness and education. By learning from each other's experiences and best practices, India, the
US, and the UK can develop more effective strategies to combat WCC and promote a safer and
more secure business environment. Ultimately, this comparative analysis highlights the
importance of collaboration, knowledge sharing, and continuous monitoring to stay ahead of
emerging WCC threats and protect the integrity of economies and societies.

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CASE ANALYSIS

1.R v Ghosh (1982) 3 WLR 110

Facts:

Dr. Ghosh who is a surgeon, was accused of forged patients' records to profess extra fees from
the NHS.
He was pronounced guilty of stratagem to defraud and was condemned to 12 months'
imprisonment.

Issues:

Whether Dr. Ghosh's actions contains deception?

Whether the advisory group should have been directed to contemplate the defendant's subjective
understanding of dishonesty.

Judgement:

The Court of Appeal validates Dr. Ghosh's conviction, but illuminates the test for deceit.
Lord Lane CJ stated: "The test of dishonesty is not entirely instinctive. It is an amalgamation of
a subjective and objective test."

Argument:

Prosecution: Dr. Ghosh intentionally counterfeited records, showing dishonesty.

Defense: Dr. Ghosh solely considered his actions were justified, so he was not dishonest.

Analysis:

The court established a two-stage test for dishonesty:

1. Was the defendant's conduct dishonest by the standards of reasonable and honest people?
2. Did the defendant realize that their conduct was dishonest by those standards?
This test balances subjective intention with objective standards, ensuring that dishonesty is not
solely defined by the defendant's personal beliefs.
The Ghosh test has been influential in shaping UK law on dishonesty and white-collar crime.

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Impact:

R v Ghosh has been cited in numerous cases, including R v Saunders (1996) and R v Hayes
(2015).
The test has been applied in various contexts, such as fraud, bribery, and money laundering.
The case highlights the importance of considering both subjective intention and objective
standards when determining dishonesty in white-collar crime cases.

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2.Vijay Mallya Money Laundering Case

Facts:

Vijay Mallya, entrepreneur and owner of Kingfisher Airlines, borrowed ₹9,000 crores from
Indian banks.
He supposedly redirected funds to personal accounts and shell companies.
In 2016, the Enforcement Directorate (ED) filed a money laundering case in opposition to
Mallya.
Mallya made a run to India in 2016 and was taken into custody in the UK in 2017.

Issues:

Whether Mallya has illegally obtained money to repay loans and fund personal expenses.
Whether he redirected funds from Kingfisher Airlines to his private accounts and shell
companies.
Whether the ED had ample evidence to prove money laundering has been done by him.

Judgements:

In 2017, the UK court permitted Mallya bail, mentioning insufficient evidence.

In 2018, the Indian Supreme Court held Mallya guilty of contempt for not disclosing assets.
In 2019, the UK High Court approved Mallya's deportation to India.

Arguments:

Prosecution: Mallya laundered money to avoid reimbursement and fund his own expenses.
Defense: Mallya had no motive to launder money; funds were used for lawful professional and
business purposes.

Analysis:

The case calls attention to the challenges of prosecuting white-collar crimes in India.
The ED's investigation and proof collection were essential in building a sound argument.
The UK court's extradition acceptance shows international cooperation in combating money
laundering.
Mallya's case serves as a deterrent to others engaging in similar financial crimes.

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3.Healthsouth scandal :

Facts:

HealthSouth, a healthcare services company, was involved in a scam from 1996 to 2002.
CEO Richard Scrushy and CFO Weston Smith conducted the fraud.
The company exaggerated earnings by $1.4 billion.
Scrushy sold $100 million in stock before the fraud was found.

Issues:

Accounting fraud and manipulation of financial statements.

Insider trading and stock sales by executives.
Deficiency Of internal jurisdictions and corporate governance.

Judgements:

Scrushy was exonerated of all charges in 2005, but later sentenced for bribery in 2006.
Smith pleaded guilty to fraud and cooperation with investigators.
HealthSouth paid $325 million in fines and resolution.

Arguments:

Prosecution: Scrushy and Smith arranged the fraud to dilate stock prices and enhance
themselves.
Defense: Scrushy claimed he was unconscious of the fraud and Smith did all of these by
himself.

Analysis:

The HealthSouth scandal highlights the significance of internal controls and organizational
governance.
The case shows the results of accounting fraud and insider trading.
Scrushy's exoneration and later sentence on unconnected charges raise questions about
accountability.

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