WHITE COLLAR CRIMES

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By Somya Goyal

Introduction

White collar crimes are usually associated with socio economic crimes. White collar crimes are committed by persons who have social respectability and who are under the service of government. They are non-violent crimes.

Meaning

White collar crimes traces its origin in England   in 1943 in carrier’s case. In this case a bulk of cotton was stolen when it was getting transferred from one place to the other and it thus give a origin to a theory called as bulking bulk theory. White collar crimes are viewed as flip side of blue collar crimes which are known as traditional crimes.

Historical background

The term was first defined by Morris in 1934 he didn’t use the word white collar crime but indirectly tells its meaning he defines it as any anti-social activity which is different from general crimes committed by high professionals.

The term white collar crimes are coined by Edwin Sutherland. He defines white collar crimes as crimes which are committed by business class or the government officials during course of employment.

The main component of the white collar crimes according to him is that these types of crimes are committed by the people who have some social respect. Many sociologists and legal thinkers critic him on this point that there is no particular parameter which can defines that who constitutes respectable position in society and who not. Hence this point clearly stands vague.

Classification

Various types of white collar crime according to him are as follows:

  1. Ad hoc crimes

Where criminals are anonymous i.e. victims cannot know in actual who the criminal is. For example hacking, card frauds and tax invasion.

  • Abuses by breach of trust

Example embezzlement, misappropriation of funds etc.

  • Organizational crimes
  • Opportunist

E.g. commonwealth games scam, 2G Scam and Colgate scam

  • Crimes which are part of business transactions

For Example, making of copies of copyright materials in course of employment, crimes relating to domains and patents. 

Examples of white collar crimes

The examples of white collar crimes are as follows

Insurances fraud which may include car insurance, medical ( medical insurance, fake reports, abortion, fake sample of drugs, doctors charging high fees, fake advertisement of medicines, sex determination of child by the doctors on the compulsion of the patient to gain money), crimes in engineering( using of poor material ), crimes in legal profession ( file tampering, wrong witness, ethics violation), crimes in education department( fake scholarships, taking bribery for admission)or property insurances; bribery, tax evasion, stock and trading manipulation, identity theft, mail, computer frauds, wire, professional misconduct, fiddling, embezzlement, blackmailing, bank frauds, counterfeit, credit card frauds, extortion( forcing to sign any contract), forgery, money laundering, weight and measuring on large scale  etc.

Causes of white collar crime

Various causes of white collar crimes are as follows:

  1. Greediness
  2. Inadequate facilities
  3. Financially duress
  4. Raise social status
  5. Lack of evidence

Victims of white collar crime

The victims of white collar crime can be distributed among two categories

  1. Voluntary victims
  2. Involuntary victims

Voluntary victims are those victims who are promised ‘fast buck’ by the swindlers and involuntary victims include creditors, customers, employees, competitors and investors etc.

The theory of penalization and victimization are not in the mind of the offenders because their guilt has been ridden by the want of earning more money and become rich.

Difference between white collar and blue collar crimes

White collar crimes are direct in nature and they are anonymous e.g. scams while blue collar crimes are physical in nature and can cause physical harm e.g. murder, rape and etc..

  1. There is financial loss in white collar crimes on the other hand there is physical and emotional loss in blue collar crimes.
  2. White collar crimes cannot be easily detached by the officials and they take time to come to the surface while traditional crimes are easily detected in comparison to white collar crimes and can be investigated easily comparatively.
  3. In white collar crimes status alone is one of the main factors as its definition includes crime which is committed by the person of high social status while in case of blue collar crimes status is usually irrelevant.
  4. Traditional crimes are crimes against individuals as they cause physical and emotional loss while white collar crimes are crimes against whole society because they cause a huge financial loss to the country.
  5. Blue collar crimes are crimes which are committed at any age but white collar crimes are generally committed at later stage of life after the person has gained some social status in the society.
  6. Political interference is necessary to commit white collar crimes while it is totally irrelevant in cases of blue collar crime.
  7.  In case of former crimes constructive mens rea is a requisite while mens rea is the foremost essential requirement in case of traditional crimes.
  8. There is direct access in case of blue collar crimes while in white collar crimes there is no direct access for example card frauds.
  9. Investigation is easy in traditional crimes because of availability of evidences while the same is difficult in white collar crimes because of scarcity of evidences.
  10. White collar crimes are difficult to find in comparison traditional crimes.
  11. Blue collar crimes are committed by lower status people who are motivated by the feeling of revenge or by taking some rupees while the white collar crimes are committed by the people of high status
  12. Traditional crimes can be committed on immediate causes or by sudden provocation but in case of white collar crimes proper planning and plotting is needed.
  13. White collar crimes are always committed during course of employment. On the other hand traditional crimes can be committed at any stage whether during course of employment or not.

Remedial measures taken by Indian government

Some of the remedies taken by the government of India are as follows:

  1. Santhan committee was formed earlier to discuss and make chapters on the same.
  2. CAG department which audits report of every government department
  3. Central vigilance commission
  4. Central bureau of investigation
  5. Domestic vigilance department of units in every state
  6. Prevention of corruption act 1988
  7. Negotiable instrument act
  8. Information technology act 2005
  9. Indian penal code 1860
  10. Income tax 1961
  11. Companies tax act 1960
  12. Prevention of bribery act 1988
  13. Consumer protection act etc.

How white collar crimes affect the society?

Despite of being the fact that white collar crimes are less heinous than the traditional crimes but no doubt their impact is not less than blue collar crimes. Many of the people ends up in losing all their lifetime savings because of frauds committed. The white collar crimes shackle the economy of the country which in return impacts the livelihood of different sections of society. Many people commit suicide because they end up all their income. They lay their impact not only on individuals but also on big companies which turns out to be bankrupt as a result of billion dollar frauds by white collar criminals.

Throughout time we can come across with many debates whether white collar crimes are more heinous than traditional crimes but the fact remains same although they are not more heinous than blue collar crimes but for sure their impact is faced by public at large.  The white collar crimes can be more damaging to the society than the traditional crimes.

We can find white collar crimes at every field ranging from medical, income tax to black marketing and hoarding. Some of the most important white collar crimes scams committed in India which leaves its drastic impact on Indian society are Indian Coal allocation scam 2012, 2G spectrum scam 2008, Satyam scam 2009, Commonwealth games scam 2010 and PNB scam 2018 etc.

Why white collar crimes are under represented?

There is misconception that generally crimes are committed by the working class and middle and elite classes commits no crime. This misconception lies because of under representation of white collar crimes. The main reasons for their under representation are as follows:

  1. They are complex in nature and therefore are not easily traceable.
  2. They are tough to detect.
  3. Investigation is hard in such cases
  4. Individual victims are not there.
  5. White collar crime benefits both the parties concerned
  6. Due to lack of awareness they are not recorded.
  7. They are not prosecuted
  8. Institutional protection is there
  9. Offenders have better opportunities of not being found guilty.

Landmark cases of white collar crimes:

  1. 2G spectrum Case 2008

One of the biggest spectrums in the history of India. Former telecom minister A Raja was involved in the allocation of 2G license to telecom industries. A Raja violates the TRAI rules in order to gain money. The telecom ministry under him changed rules and eligibility criteria several times in the process of running of auction. Government has to face loss worth 176000 lakh crore because of it.

  • Fodder Scam Case

The case is regarding large scale embezzlement of government funds, made by producing fake bills to substantiate payments that were never made. The scam took its notorious name from the fact that it was rooted in animal and husbandry department of Bihar Government and the fraudulent transactions were made in the name of procuring cattle feed over a period of 20 years, under successive regimes. The main accused is Lalu Prasad Yadav and Jagnath Mishra, the latter was acquitted later.

  • Indian coal Allocation Scandal 2012

Manmohan Singh was then Prime minister. His government was accused that the PSU and Private companies has misallocated coal deposits without the competitive bidding by the government. The amount of this allocation was Rs. 186000 lakh crore

  • 2012 Waqf Board Land Scam

The Waqf board is a charitable institution established for the help of a poor Muslim community on which Anwar Manipadi, who was the president of the Karnataka State Minority Commission, presented a report, which stated that 27000 acres of land which was Waqf it was controlled by the board it was allocated by the board and the leaders to the government workers at a very low price. The value of the land was about 150000 lakh cores.

  • Commonwealth Games Scandal 2010

In this case, half of the amount which was allocated 70000 crore for the game was not spent. The central vigilance commission was also involved in the scam in which purchase of equipment was manipulated. The value of the equipment was shown increased. It was huge loot.

  • Telgi Scandal of 2002

The scandal was carried out in a secretive and dramatic way to make money in every denomination. The mastermind of this scam was Mind Abdul Telgi, who had mastered the art of printing of fake stamp papers. It was sold to banks and other institutions in which he was supported by government departments. His infiltration reaches spread to 12 states. The amount of his scam was estimated to be around 20000 cores.

  • Satyam Scam of 2009

Satyam is the biggest fraud in the history of corporate history, in which Ramalinga Raju, former chairman of the company, for several years tampered with the accounts of the company’s accountants, raising satyam’s revenue and profit figures, kept everyone in the dark. Due to this scam satym’s investors and shareholders had to face heavy losses. The amount of scam in the company was Rs. 14000 cores. Raju was imprisoned and fined for the scam. Tech Mahindra later took an important role in the company’s acquisition and reinstate satyam.

Conclusion

White collar crimes have been prevalent in society ever since 15 century and these are the crimes which are dealt not so harshly by  the law system the issue arises when we have certain law but which are not implemented. Without implementation they can’t be controlled because they are causing a huge loss they need to be stopped.

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