This article is an analysis on the white collar crimes in India. The white collar crimes. Are nothing but a crime which is committed by the high esteem people, ie well educated people who belongs to the higher society in their official capacity. These criminals are known as White collar criminals. This paper try to differentiate the nature of white collar crimes from that of other crimes. In the recent past India has faces an evolution in the white collar crimes. They are socio-economic crimes which are done by people who are in elite professions such as doctors, lawyers and so on. They are called as socio economic crimes as they directly have an impact towards the society. This paper elaborates the provisions in Indian legal system, the punishments given and also highlight the possible measures which can be taken inorder to curb these crimes.
Keywords: Indian Laws, White Collar Crimes, High Professional Criminals, Committee Reports.
The concept of white collar crimes found its place on criminology in the year 1941.tje crimes which are committed by High Class people are termed as White Collar Crimes. They commit crimes using their profession as the tool. These people are not like every other common criminal, they have a better perspective towards the recent technology. There are various fields in which these types of crimes are Committed such as trade, commerce, education, health etc. These criminals are treated as upper class, most privileged and respected one’s in their respective fields until they are found guilty. Such crimes are Committed in various professions. In the medical field the doctors create false medical certificate, they prolong the treatment in order to gain more money and so on. In the legal profession crimes such as fabrication of or destroying the documents, threatening of witness etc take place. And in various other fields as per their work nature these crimes take place. The crimes when taken place in companies those criminals are termed as corporate criminals. White Collar Crimes are such as Bank Frauds, Black Mail, Embezzlement, Bribery, Counterfeiting, Forgery, Cyber Crimes, Money Laundering, Tax Evasion etc.
Edwin Sutherland an American sociologist defined White Collar Crimes as “ Crime committed by the persons who enjoys high social status, great reputation and respectability in their occupation”.
- These criminals are relatively more intelligent, smart and successful and are from High class society compared to the other criminals
- These crimes are hard to detect as they are mostly done indirectly.
- The white collar crimes cause more economic loss compared to the ordinary one’s.
- These criminals are very well aware of the rules unlike other illetrate criminals. Hence, they are not very afraid of the law.
- These criminals are the one’s who commit crimes due to their selfishness, they do this to fulfil their greediness.
- Their motive is to gain more money to live a luxury life or to gain more respectful position and to be successful in their profession.
TYPES OF WHITE COLLAR CRIMES
There are various types of white collar crimes in India. Few are listed below :-
1. Bank Fraud –
“ It’s the classic white-collar crime because it’s the old adage. The best way to rob a bank is to work for it”.
– Peter Henning
The intent to deceive and gain undue advantage from a person is called a fraudulent activity. Such fraud when committed in a bank is called bank fraud. These types of fraud can be committed by way of manipulation, false representation of cheques, securities, bonds etc. This is one of the major types of white collar crime. This will effect both the government and the public as the large public money is being involved.
2. Cyber Crimes-
The digitalization is misused by the is playing a pivotal roles in these type of crimes. In these cases the victims are either directly or indirectly affected. They not only create financial losses but even their privacy is at stake. By using technologies such as mobile phones, computer and other networks crimes such as hacking, spoofing, stalking, child pornography, copyright infringement, cyber terrorism etc are committed.
3. Bribery –
It is yet another white collar crime which is committed frequently. Bribe is giving money or any other valuable or doing any other favour for the official inorder to make him do something or abstain from doing something. This is means of gaining profit for doing some illegal act or doing a legal act in an illegal manner. This kind of offences happen in both government and public offices.
4. Money Laundering –
The illegal money gained by these criminals are by various means are hidden. They try to convert such corrupt money into a legally owned one on order to spend them without getting charged. The process of converting is known as Laundering.
5. Tax Evasion-
Every citizen is bound to pay tax as per their financial status. The white collar criminals try to avoid such payments with an intent of keeping that money with themselves as their income is high and they also have black money which is been hidden from the government.
6. Identity Theft –
One of the common and easiest white collar crime is Identity Theft. The development of technology has paved way for such crimes as it is become very easy for one to collect personal information of anyone. These criminals try to get the information such as name, address, mobile number, etc and try to use them and gain money. They are receiving money through some one’s identity.
7. Professional crimes –
Crimes which are committed by the professionals in the course of their occupation such as medical practitioners, lawyers in the course of their occupation.
8. Ad Hoc Crimes –
In these crimes the person or the offender pursues his own individual objective having no face to face interaction with the victim. Example: Credit Card Frauds, Hacking etc.
9. Black Mailing-
It is known as black mailing when people in powerful position try to involve his status into the picture and demand any sort of favour from the person to finish his job
10. Embezzlement –
When a person, who has been entrusted with the money or property appropriates it for his or her own use.
Copies or immitates an item without having been authorised to do so.
12. Corporate Crimes-
A corporate crime is the one down when a companies or an entity deliberately changes and conceals sensitive information which makes it look healthier. These criminals are known as corporate criminals. These types of crimes include Fraudulent Financial Statements, employee fraud, bankruptcy fraud, misappropriation of assets etc.
REASON FOR GROWTH
There is a rapid growth in these type of crimes along with the growth in technology not only due to greed, Competition but also due to lack of stern punishments, prolonged procedures taken to find out the criminals, reluctance etc.
The white collar crimes can be traced back in the year 1473 in England through the popular case “Carrier’s Case”. In which the agent was entrusted with the responsibility of the principal to transport wool from one place to another. The agent was found guilty of stealing the same. This is the first noted case.
BINOD KUMAR V. STATE LF JHARKAND AND OTHERS (2011)
The case was filed against several ministers of State of JHARKAND along with the Chief Minister for having the possession of unaccountable money. The Central Bureau of India started it’s investigation under Prevention of Corruption Act 1988 and The Indian Penal Code, 1860 as the power to carry on investigation under the Prevention of Money Laundering Act was only with the Enforcement Directorate, which is ofcourse subjected to the power given to the Central Government.
It was the first scam in independent India. An industrialist and stock speculator Mr. Haridas Mundhra, sold fictitious shares to Life Insurance Corporation and there by defrauding LIC by 125 Crores. The then Prime Minister Mr Jawaharlal Nehru, set up a one man commission to investigation headed by Justice Chagla. The investigation took place and as a result Justice Chagla found Haridas guilty and sentenced him to imprisonment of 22 years and TT.Krishnamachari the then Finance Minister resigned his position.
2G SPECTRUM CASE
The landmark case of 2G Scam was basically a telecommunication and a political scandal. The Politicians and Government was involved in this scandal. This scam was about the allocation of unified access service license. Mr A.Raja, the former Telecom Minister has evaded norms at every level and carried out the dubious 2G Scam in the year 2008.
HARSHAD MEHTA SECURITIES FRAUD 1988-1995.
Harshad Mehta, stock broker established his security firm in 1990. The problem arose when Mehta obtained capital investors in the stock market by misappropriating bank’s money. This misappropriation of money falls under the ambit of money laundering. He earned around RS 5,000 crores. This scam was exposed by the then renowned journalist Sucheta Dalal. Due to this unabated selling market lost 0.1million in a day. Thus is considered as one of the biggest ever crash faced by the Indian stock market. To curb such transactions various changes here made to the SEBI rules and securities.
This is considered as one of the biggest ever corporate accounting fraud. On 7th January, 2009 by way of confession letter by B.Ramalingam Raju, the founder and Chairman of Satyam Computer Service Ltd Published in Times of India, this very scam came into light. The confession was regarding the manipulation in the books of a count by overstating the assets and understanding the liabilities. The accounts books were manipulated to cheat the investors and shareholders as the books of the accounts are the one’s which reflect the company’s financial standing. The scam was approximately 14,000 crores and is considered go be an important factor which contributed to the recession in the year 2009. Ramalinga Raju & 9 major associates were found guilty of insider trading, indulging in fradulent and unfair practices by the SEBI. SEBI demanded the accused to pay a sum of approximate 3000 crores within a period of 45days. It also debarred them from accessing the security markets in any way for 14years. This SEBI tried to ensure that this kind of scandal never happens again.
PUNJAB NATIONAL BANK – NIRAV MODI SCAM
India’s 85th richest person, Nirav Modi is a diamantaire, elite jewellery designer. As per the banks statement Modi and the companies linked to him colluded with their officials to yet guarantees or letter of undertaking to help fund buyer’s credit from other overseas banks. PNB’s preliminary investigation showed that two officials of the bank had fradulently issued 100’s to the said firms without following the due procedure. These LOS were then transmitted across the SWIFT messaging system, based on which the Credit was offered to the said firms. PNB alleged that the frauds ostensibly so raised for the purchase and sale of diamonds were not used for the purpose. PNB issued to the stock exchange, about the detection of the fradulent unauthorized transactions. PNB has incurred 1.8 billion fraud, one of the largest to be detected in Indian Banking System.
The above paper sums up the nature of white collar crimes and about the white collar criminals. The changing Dynamics in the field of white collar crime. People need to be given awareness on the these kind of crimes. It is a crime against the economy as a whole and Hence the government should take more measures to curb the same. Society will be affected largely by these crimes. Hence, the punishments should be enhanced.
Author Details: Roshini R (Tamil Nadu Dr. Ambedkar Law University, School of Excellence in Law)
The views of the author are personal only. (if any)