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The concept of white-collar crime was firstly introduced by E.H. Sutherland. His work in the field of this area attracted the attention of criminologists. He said that there are anti-social activities that are being carried by the persons of upper strata besides traditional crimes such as robbery, dacoit, murder, theft, rape, kidnapping, etc. These activities for a long time were accepted as the necessary tactics used by the professionals for the success of their business. Thus, if any person wants to file the complaint against such activities, the complaint was remaining unheard.
After the analysis of Sutherland, in 1934, Morris drew the intention that anti-social activities that are being used by the high-status persons in the course of their business or profession must be brought within the category of crime and these activities should be punishable.
E.H. Sutherland emphasized that the “upper world crimes” which are done by the high-status person in the course of their profession should be termed as “White Collar Crimes” and the traditional crimes should be termed as “Blue Collar Crime”. The distinction could be based on the extent of presumed respectability.
For example, if a person belongs to the respectable class and possessing good reputation in the society, sells shoddy goods to another person, he is committing the White Collar Crime, but if a person who is unknown to their victim, do the same thing, he will not be doing the white-collar crime.
What is the White-Collar Crime?
White-Collar Crime is a nonviolent crime which is committed by a person of high status for financial gains. The motive behind the whiter collar crime is to obtain or avoid losing the money, property, services, or to secure the business.
Examples of White Collar Crimes
White-collar crimes include securities fraud, tax evasion, and embezzlement, money laundering, and corporate fraud.
Classifications of white-collar crime
Broadly the white-collar crimes can be classified into four major categories, such as:-
- Ad hoc– The offender pursues his objective having no real contact with the victim. For example, hacking on the computer, credit-card frauds, etc.
- White-collar crimes including the breach of trust or faith. Example, misuse of funds, embezzlements, etc.
- The use of the high position to commit crimes also comes in the category of white-collar crime. Example, 2G scam, Coalgate Scam, etc.
- Violation of trademark or copyrights also comes under this.
What are the contributing factors in white-collar crime?
Under the 29th report of the Law Commission, it was observed that the modernization and technological developments and monopolistic trends in the business world are the major factors in white-collar crimes.
How the white-collar crimes different from other crimes?
The major keyword to differentiate between white-collar crimes and other crimes is “invisibility’ ‘trust’ ’insider’ ‘knowledge’ ‘expertise.
Types of white-collar crime
There are various types of white-collar crime
Fraud is one of the most widely recognized kinds of white-collar crime. It works by plotting confusion and duplicity to secure financial or data gain however unlawful methods. It typically happens when an individual pays for goods or services yet doesn’t get what he has paid for.
Computer and Internet Fraud
Computer and Internet fraud is characterized as unauthorized access to PC and Internet services. The access is taken for the misinterpretation of the facts which leads to initiate the loss. It can be done by many methods like alteration of the documents, putting the viruses, rewrite the software codes, etc.
The punishment for cyber fraud is two years of imprisonment and a fine of 10 lakhs.
It is part of the White-collar crime and also known as stock fraud or investment fraud. This fraud can be done in many ways. Under this fraud, the person will give you false information about the service which he is providing to the victim. Security fraud can be done in the name of stockbroker, brokerage firm or organization, etc. This crime mainly includes fraud information, withholding the key information, bad advice, etc.
This is an illegal activity where the person or the company hide their original tax liability and avoid paying the true taxes. Tax evasion is subject to the criminal offense. It can be both ways, the person can pay more than his actual tax or less than his actual tax. Tax evasion is essentially a resistance of tax-paying policies or maintaining a strategic distance from payment by unlawful methods. This is more common in the categories of persons such as traders, lawyers, doctors, contractors, etc. The Income Tax department feels difficult to know about the real income of the professionals because it is very rare that the person shows his original income. It is also said that the actual tax paid by these professionals in only a fraction of the total income. The rest of the money goes into circulation in the form of “Black Money”.
It is an illegal process to convert black money into white money by concealing the origin or black money by passing through bank transactions.
In simple words, money laundering is the process of taking the cash earned from illegal ways like selling the drugs, gambling, and making the cash appears like it is earned from legal ways. The process which converts the black money into white is called money laundering.
The money laundering is done in three steps placement, layering, and integration.
It is the process to move the dirty money into legitimate money and away from its source. People use to send money abroad. Placement of money can be done in many ways like exchange currency, placing the money into offshore organizations, etc.
It is the second stage of money laundering. In simple words, it is the process to move the country through multiple countries so fast that banks fail to detect it.
It is the final stage of money laundering where the money is successfully put back into the economy. People usually buy property from this money because it is a very simple way to use that money.
White-collar crimes in certain professions
There are also some professions which provide sufficient opportunities for the white-collar crime:
The making of false medical certificates, helping illegal abortions, manufacturing of fake drugs, etc. comes under the white-collar crimes.
The passing of the substandard work and maintenance of bogus records of work-charged labor are examples of white-collar crimes.
The instances of fabricating false evidence, professional witnesses, etc. are examples of white-collar crimes.
Section 197 of the CrPC 1973 provides an umbrella for the corrupt public officers who were accused of any offense alleged to them while acting in the discharge of their official duty.
In India where large scale starvation and illiteracy, is very crucial problems for the administration of criminal justice. However, there are some remedial measures which should be used against the white-collar crimes-
- Creating public awareness through the media, press, or other audio-video aids against white-collar crimes.
- Constitution of special tribunals with powers to award the sentence in the cases of white-collar crimes.
- There should be drastic punishment for these crimes. It may help to reduce white-collar crime.
- A separate chapter should be added for white-collar crime in the Indian Penal Code.
- The punishment for white-collar crimes should be prescribed keeping in view the gravity of the injury caused to the society because of these crimes.