In this blogpost, Komal Rastogi, Student, Nirma University, Ahmedabad, writes about white-collar crimes, characteristics of the criminals and the causes of the white collar crimes in India.
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The breaking of the law is a crime in every society. In India, criminals are administered under Indian Penal Code, 1860. Today’s crime is distinguished by colour i.e. white collared crime and blue collared crime. Blue collared crimes is a crime of poor person. White collared crimes is a crime of middle-class people or high-class people. White collar crimes is a term coined by Criminologist and Sociologist Edwin H. Sutherland in the year 1930. He described the term as a “crime committed by a person of respectability and high social status in the course of his occupation.”[1]
White collar crime had a great impact on society as it is about the theft of confidential documents, infringements of patents, etc. “These white-collar crimes by nature are such that the injury or the damage caused as a consequence of them is so widely diffused in the large body of citizens that their enormity as regards personage victim is almost trifling.”[2] Some of the crimes committed by white collar criminals are:
Bribery: Offering, soliciting or receiving any kind of value with the intention to influence the actions of an individual holding a legal duty or public duty. A person who gave the bribe or took the bribe would be charged with bribery.
Bank Fraud: Bank fraud is an illegal means to obtain assets or money owned by financial institutions, or to obtain money fraudulently from the bank.
Cellular phone fraud: This kind of fraud is very common nowadays. The unauthorized use or tampering the phone or any service related to the phone. This fraud can be done by using stolen phone or by purchasing sim cards with the fraud name.
Educational institutions: Another way to obtain money is through schools. These organizations manage to get a large amount of sum by government grants of financial aids by showing fake details of the facilities.
Counterfeiting: Counterfeiting takes place when someone copies an item without authorization and passing the copy as if it is real. The most common example is money but can also be done with designer clothes, handbags, wallets, etc.
Other crimes such as telemarketing fraud, welfare fraud, securities fraud, racketeering, money laundering, larceny, theft, insider trading, insurance fraud, forgery, fake employment place, health care fraud, extortion, embezzlement, credit card fraud, computer fraud, etc.
White collar crimes have been increased in India since colonization period. From the year 2011, there is a massive increase in the offences such as motor vehicle theft or snatching. More than 20 groups had been arrested for white collar crimes in the year 2010. The crimes committed by white collar includes perpetrators of lottery fraud, ATM fraudsters, travel agents, fake recruitment racketeers, property dealers, agents promising false court affidavits and death certificates as well as both men and women operating fake friendship clubs.[3] Earlier, the people who were indulging in white collar crimes were said to be grass eaters. But now due to commerce and technology advancement people indulging in these types of crimes are known as meat eaters.
Characteristics of white collar criminals
Sutherland had listed some of the features to define white collar crimes.
- White collar crimes usually occur in the course of an occupation and are the people of higher strata.
- White collar criminals often escape from the police station due to economic reasons.
- The motive of white collar criminals is to gain money, not lust.
- There are no arrests for the violation of copyright due to economic factors which precede
- These types of criminals can do great harm to society as well as institutions.
- Most of the criminals are associated with business and political world.
- There is a lack of human feeling in white collar crimes. Hence, the background of these criminals is non-emotional.
Causes of the white collar crimes
Greed: People of high strata who are financially stable but do the crimes out of greed. For this purpose, the perpetrator would adopt illegal methods to have an economic gain.
Technology: Another reason can be technology. The emergence of new technologies, political pressure or growing business, has led to many more ideas which resulted in crimes. Lawyers are reluctant to bring these cases up because it is very hard to track.
Competition: White collar crimes occur because of the desire to beat the competition to reach ahead than others. Tio win, crimes like bribery and frauds are committed.
Legislation: Due to the rise in crimes of white collar criminals, there are not enough laws to deal with these kinds of crimes. In most of the cases, white collar criminals are not even prosecuted. The implementation of Information Technology Act 2008 is fragile due to lack of trained workers. It is tough to find white collar criminals because the crimes which are committed are done in private places and hence there is no eye witness.
Cases related to white collar crimes
In the case of security scam, due to the white collar crimes, there is a change in the security market. Another financial scam is Prudential Capital involving NBFCs.
Another case of Satyam Computers is one of the major white-collar crimes in recent crimes. It involved the fraud of Rs. 7000 crores. Satyam had kept his record for quite a long time but was busted due to profits and revenues hike.
In the year 2013, Sharda scam took place where many companies fooled the investors due to the loopholes in laws.
Laws for white collar crimes
Information Technology Act, 2000
Information Technology Act was enacted on 9th June 2000. The purpose of this act is to recognize the legal validity of transactions used in E-commerce and to promote the growth of e- governance. Though the focus of this Act is not on cyber crimes this Act, have certain provisions which deal with white collar crimes. Chapter XI deals with the offence of cyber crimes, and Chapter IX deals with the penalties and adjudication of the crime. Although it has certain provisions regarding cyber crimes, it also has some unresolved issues which prevent the laws to enact. Some of the problems are inapplicability, the definition of hacking, the absence of guidelines for investigation of cyber crimes, etc. “Section 78 and 80 of the Act deals with certain issues related to investigation, search, seizure and arrest and also make the provisions of Criminal Procedure Code applicable to any entry, search or arrest made thereunder.”[4]
Crime is an offence and individual who perpetrates the crime should receive legal punishment. The criminal procedure tries to create a deterrent effect by punishing the offender through legal punishment. Unlike all other crimes, white collar crimes have distinctive and unique features. Such crimes injure the society and escape from punishment due to weakness in administering the prevalent laws in combating the crimes. There are various factors that are responsible for occurrence of such crimes. It is high time that such factors be curbed, and the menace of white collar crimes be brought under control.
[1] Retrieved on http://indianresearchjournals.com/pdf/IJSSIR/2012/September/16.pdf
[2] Retrieved on http://www.legalservicesindia.com/article/article/white-collar-crime-and-its-changing-dimensions-in-india-1378-1.html
[3] Supra Note 1
[4] Retrieved on http://www.lawteacher.net/free-law-essays/criminal-law/white-collar-crimes.php
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