White-Collar Crime

History of White Collar Crime

The concept of white-collar crime was first 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 out 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 wanted to file a complaint against such activities, the complaint remains unheard.

After the analysis of Sutherland, in 1934, Morris drew the intention that anti-social activities that are being used by 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.

Classes and powers of criminal court

E.H. Sutherland emphasized that the “upper world crimes” which are done by high-status people in the course of their profession should be termed “White Collar Crimes” and the traditional crimes should be termed “Blue Collar Crimes”. The distinction could be based on the extent of presumed respectability.

For example, if a person who belongs to the respectable class and possesses a good reputation in society, sells shoddy goods to another person, he is committing a White Collar Crime, but if a person who is unknown to their victim, does 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 money, property, or 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 white-collar crimes can be classified into four major categories, such as:-

1. Ad hoc– The offender pursues his objective having no real contact with the victim. For example, hacking on the computer, credit-card fraud, etc.
2. White-collar crimes including the breach of trust or faith. Examples, are misuse of funds, embezzlements, etc.
3. The use of the high position to commit crimes also comes in the category of white-collar crime. Example, 2G scam, Coalgate Scam, etc.
4. Violation of trademarks 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 modernization 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 keywords to differentiate between white-collar crimes and other crimes are “invisibility’ ‘trust’ ’insider’ ‘knowledge’ ‘and expertise.

Types of white-collar crime

There are various types of white-collar crime

Fraud

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 initiating the loss. It can be done by many methods like alteration of the documents, putting the viruses, rewriting the software codes, etc.

The punishment for cyber fraud is two years of imprisonment and a fine of 10 lakhs.

Security Fraud

It is part of the White-collar crime and is 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 a stockbroker, brokerage firm organization, etc. This crime mainly includes fraud information, withholding key information, bad advice, etc.

Tax evasion

This is an illegal activity where the person or the company hide their original tax liability and avoids paying the true taxes. Tax evasion is subject to a criminal offence. 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 to 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 is only a fraction of the total income. The rest of the money goes into circulation in the form of “Black Money”.

Money laundering

It is an illegal process to convert black money into white money by concealing the origin of 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 drugs, and gambling, and making the cash appear like it is earned in legal ways. The process which converts the black money into white is called money laundering.

Money laundering is done in three steps placement, layering, and integration.

Placement

It is the process to move the dirty money into legitimate money and away from its source. People used to send money abroad. Placement of money can be done in many ways like exchanging currency, placing the money into offshore organizations, etc.

Layering

It is the second stage of money laundering. In simple words, it is the process of moving the country through multiple countries so fast that banks fail to detect it.

Integration

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 white-collar crime: 

Medical profession

The making of false medical certificates, helping illegal abortions, manufacturing of fake drugs, etc. comes under white-collar crimes.

Engineering

The passing of substandard work and maintenance of bogus records of work-charged labour are examples of white-collar crimes.

Legal Profession

The instances of fabricating false evidence, professional witnesses, etc. are examples of white collar crimes.

Judicial Response

Section 197 of the CrPC 1973 provides an umbrella for the corrupt public officers who were accused of any offence alleged to them while acting in the discharge of their official duty.

Remedies for white-collar crime

In India where large-scale starvation and illiteracy, are very crucial problems for the administration of criminal justice. However, there are some remedial measures which should be used against 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 crimes 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.

Conclusion

In conclusion, we can say that white-collar crime is the latest crime which can be done by anybody, so always be aware so that you can save your assets from such frauds.