Blog Details

" In a way, fraud in business is no different from infidelity in marriage or plagiarism in scholarly work, even people committed to high morale standard succumb "

Crimes committed by a person out of his greed, unlike the crimes committed out of one’s need as in traditional or blue-collar crime, involve deceit, unlike violence for illegitimate procurement of the money. At times we as a society pitch into the commission of various white-collar crimes even if we loathe such sought of activities like bribing a person to get the task done easily, and such crimes cannot be committed unless there is any demand for such illicit services, though both white collar crime and traditional crimes have a common origin that is common law and both being principle of adaptation of theft, fraud etc. The term white collar crime was first introduced by sociologist Edwin Sutherland in the year 1939, earlier the upper class of society were considered incapable of committing crimes; these crimes are not that easy to detect because of the sophisticated schemes, and persons committing such crimes are very influential, and it is not that hard for them to fabricate the facts and conceal it from the general public, Sutherland emphasized that these crimes are executed by an individual in the course of their occupation and breaching trust to discern it from the traditional or blue-collar crime, for example, if a doctor kills his friend that won't be considered as a white collar crime but if he handovers a fake medical certificate to someone that would be considered as a white collar crime.

Status does not delimit these crimes; even a respectable and privileged person can commit heinous crimes such as murder, and even a non-privileged person can commit white-collar crimes such as tax evasion.

Earlier in the United States, law believed in the principle of caveat emptor, which states that the purchaser must enter into a deal with open eyes and guard himself against the chicanery of the vendor; this sought attitude promoted more and more white-collar crimes during the period of depression in the 1930s even the American President Roosevelt insisted on the withdrawal of the principle of caveat emptor in the matter dealing with white collar crimes.

The Multi thousand crore scam of India committed by Harshad Mehta came to light in the year 1991, which involved many people holding respectable positions in certain banks which, included several eminent banks, State Bank of India played the biggest role in it, and this scam showed the dereliction of Indian Banks and even after that came the stock market shares scam in the year 2001 by Ketan Parekh

White collar criminals are clever and influential as compared to ordinary criminals; most of the white collar crimes are anonymous, not personal, and most importantly, indirect, while on the other hand, ordinary crimes are direct and involve physical actions and can be easily detected, in white collar crimes losses may not be immediately visible.

The financial loss of white-collar crime is often greater than the loss of all traditional crimes combined, and it does have a large impact; most traditional or blue-collar crimes are the result of revenge, and unlike them, white-collar may not require any criminal intent.

Even if a person committing a white-collar crime is well aware of his acts, he won’t be afraid of it because the punishment allotted to such crimes is not as severe as of a traditional or blue-collar crime. All they have to do is to pay some fine with a short term of imprisonment.

Commonly heard white collar crimes are ; computer fraud that is the act of stealing credit and debit card information from the user, according to an article of business standard the biggest data thread that happened in our country was because of the compromise in the system of Hitachi who manufactured ATM machines, because of  which about three million cards were exposed to danger and  because  of which many banks such as ICICI, Yes bank etc got effected, another type of white collar crime is insurance fraud in which a person damages his property on purpose to gain some better advantage , one can also commit these crimes by Abusing his position like a government official or any other person asking for bribe or a corporate official who fixes price to drive his competitors out of the market , everyone would like to save their taxes from the government and  for that they might end up with the practice of Tax Evasion by hiding their assets and source of income even though unintentionally , professionals like Doctor , lawyers and engineers are habitual offenders of these crimes like if a person needs to show his leave in his office as a genuine one he just need to ask a  Doctor to deliver him a fake medical certificate , a lawyer can fabricate the facts of a case or can  make witnesses to be on his side , an engineer who is authorized to pass a project for a contractor can pass it for bribe without even realizing that how many life’s he would be putting in risk ,  according to the survey report of ministry of health up to seventy percent of food consumed in this country is adulterated , hoarding and black-marketing are the most common crimes committed in our country whenever there is a shortage of goods in the market traders hold their product and then they sell them at an unreasonable price, in a report of Santhanam committee they observed that Indian businessman build secret hoards of foreign exchange abroad by under invoicing of the exports and over invoicing of imports violating the foreign exchange regulations and import export laws , in his study Sutherland found that a large number of businesses in the United States were involved in illegal contracts, conspiracies in restraint of trade, misleading advertisements  , unfair labor practices and bribing public officials , by hacking one can exploit the details of a person , they can hack commercial websites thus paralyzing whole business.

As of now, there are no special acts targeting white-collar crimes, but the existing ones like The companies act 2013, Information Technology act 1961, Indian penal code 1860, Commodities act 1965, Prevention of Corruption Act 1988, Prevention of Money Laundering Act 2002, Negotiable Instrument Act 1881,  Special Court ( trial of offences related to transactions in security act ) 1992 and the Import and Export Control Act  1950

Section 451 of the companies act states that when a company or an officer to that company commits an offence for which they have been previously penalized and faced imprisonment commits the same offence within the time spam of three years then that company and all those officers involved in the commission of the offence for the second time will be punished with twice the amount of fine but it would not be applicable if they have committed it after three years , punishment for furnishing false evidence have been provided under section 449 of the Companies Act 2013 either upon an examination on oath , solemn affirmation, any matter arising under this act or in any affidavit deposition , that person shall be punished with Imprisonment  or fine of which imprisonment may extent to seven years and fine may extent to ten lakh rupees, section 448 of the companies act states that if a person deliberately makes a false statement and it is in his knowledge that he is about to give a false statement  or omits a material fact knowing it to be material then he would be held liable for this act , false statement that is referred in this section can be through certificate , report , financial statements , prospectus or any other document required for the purpose of this act , there are many other rules in these existing acts that covers crimes related to white collar crimes.

In the case of Central Bureau of Investigation vs Jagjit Singh 2013, it was held that socio-economic offences are great social wrongs they have immense societal impact, and the ultimate victim is society; such sought of interest does not only create a hazard in the financial interest of the society but also creates a  deep dent in the economic spine of the nation, in Central Bureau of Investigation vs Maninder Singh the court held that the development in science and technology have led to an enormous increase in economic crimes like phishing, ATM frauds etc. which involve a huge amount of public and government money.

Lack of fraud prevention and investigation measures is causing huge economic loss; only half of the companies in India have background screening; in my view, we are lacking adequate laws and policies covering these whiter collar crimes, and most of the people committing these crimes are highly influential and can easily pressurise the investigating authorities, these authorities need to be given some more powers, and the punishment for these white collar crimes should be more severe,  majority of white collar crime in India remains unreported because of the coverups by these influential criminals.