Research Paper on White Collar Crime


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In the present world we the general population live in social orders. The strata of the general public fluctuate from upper class to lower class. A general public is a place comprising of different sorts of gatherings of individuals where some has a place with high class or privileged, who are extremely rich or are the authorities designated or are the regulatory people who are regarded by virtue of their position of respect in the social life. Though others has a place with low class in contrast with the previous comprising of needy individuals or lower white collar class individual or such individual who have no power or expert to govern in any period of society. At the point when a wrongdoing is carried out by the former so called individuals of upper class of society, such crimes are known as white collar crimes.

The eminent Criminology Professor Edwin Sutherland was the person who for the very first time introduced the term white-collar crime in 1939 during a presentation in the American Sociological Association thus broadening the frontiers of criminology and defined the said concept a decade later in his book, White-Collar Crime (Sutherland, 1949).1 Prior to this, the criminologists focused their study mainly to the blue collar crimes, i.e. basically the traditional crimes like theft, burglary, robbery which were usually committed by individuals of lower socioeconomic status. But this distinct type of crime also titled as occupational crimes is a violation of the criminal law by a person in the course of his occupational activities belonging to the upper socioeconomic class who not only is economically sound but also is respected in the general society.

In India white collar crime is at a rise because of the progress in the economic and industrial fields. After the advent of liberalization, privatisation and globalization the economic standards of the industrial sector has rapidly increased and this has opened room for white collar crimes in India. Most of the white-collar crimes are directly connected with the production or distribution of wealth. The recent technological development has added to new dimensions of white collar crime. In a country like India which is a developing country, economic offences are increasing side by side the traditional ones. The main cause of committing the white collar crimes is the tremendous drive of profit maximization or desire of humongous illegal gains. The impact of white-collar crimes are more dangerous to the society than the ordinary crimes because of two reasons, one is the involvement of huge financial loss and the second is the damage caused to the social relations in a society since it creates distrust , lowers morale on a large scale. Unlike street offences where there are just one or two victims, white collar crimes tend to have a large number of victims.

Etymological meaning of the phrase White Collar Crime:

The Genesis of white collar crime isn’t that old. Such term goes back to 1939. As said before Professor Edwin Hardin Sutherland was the first to coin the term, and guess white-collar criminals attributed different characteristics and motives than typical common road culprits.  Mr. Sutherland initially exhibited his theory in an address to the American Sociological Society in endeavour to ponder two fields, crime and high society, which had no past observational connection. The idea of white-collar crime found its place in criminology for the foremost time in 1941 when Sutherland published his research paper on white-collar criminality in the American Sociological review.2 He defined the notion of white collar crime as “crime committed by a person of respectability and high social status in the course of his occupation” but Sutherland, was not the first to be concerned about the deviance of the rich, powerful and favoured. It creates the impression that Edward A. Ross was the first to report upon the sins of “The Criminaloid” in his now classical article in The Atlantic Monthly in 1907 where he mainly focused on the businessman who were engaged in harmful acts of the society in the shadow of respectability, and he further termed such perpetrators as “society’s most dangerous foe”.3 Albert Morris was the first to discuss the abuses of the “criminals of the upperworld” in the form of a book. In his treatise on Criminology (1935) he characterized “criminals of the upper-class” as: “that numerous but never clearly defined group of criminals whose social position, intelligence, and criminal technique permit them to move among their fellow citizens virtually immune to recognition and prosecution as criminals.”4 The regular scholarly linkage between Ross, Morris and Sutherland was the protection of a group of such perpetrators from the legal process on account of their social, financial and political status. Sutherland separated himself from the individuals who went before him in one vital regard. He made the study of white collar crime not only respectable but also plausible.

Though it was Sutherland who defined the term white collar crime nearly aptly for the first time but he was exposed to criticism. The most controversial point was brought about by Coleman and Moyniham who pointed out that there was a lack of definite criteria for determining persons of respectability and status. Again the element of ‘high social status’ also leads to confusion as Sutherland has himself included the concept but often has deviated from the same by including thefts and frauds committed by middle or lower level workers in course of their employment or work. Some critics therefore have expressed their opinions that such kind of offences could be termed as ‘occupational crimes’ rather than white-collar crimes. A further criticism is made against the definition of Sutherland is that it includes even such violations of law which are committed not in course of occupation or profession and such violations are not a part of the upper strata of people, for example tax evasion is caused by all strata of people not necessarily restricted to higher strata.5

Let us also now consider contributions made towards the phrase white collar crime by other white-collar analysts after Sutherland. Marshall B. Clinard in his book ‘The Black Market: A Study of White Collar Crime’ has defined white-collar crime as “a violation of law committed primarily by groups such as businessman, professional men, and politicians in connection with their occupations.”6 Also, Frank Hartung defines white-collar crime as a “violation of law regarding business which is committed for a firm by a firm or its agents in the conduct of its business”.7

Later on, in the Administration Improvement Act (AIA) of 1979, the U.S. Congress defined white collar crime as “an illegal act or series of illegal acts committed by non-physical means and by concealment or guile to obtain money or property, or to obtain business or personal advantage”. The definition of AIA shifts from the traditional definition of Sutherland whose prime focus was that white collar crime was usually committed by “high status persons”, AIA on the other hand puts emphasis on the characteristics of the offence rather than on the perpetrator of the offence as a high status person since not always is a case that white collar crimes are committed by persons of higher strata.8

Historical backdrop:

The initial documented instance of white collar crime law goes back to 15th century England. There has been a instance famously known as the Carrier’s case of 1473, where the agent was entrusted to transport wool and he attempted to take some of it for him by stealing. Hence the Star Chamber and Exchequer Chamber of the English Court of Law adopted the ‘breaking bulk’ doctrine regulation as it constituted the wrongdoing of theft. Nonetheless, the industrial capitalism in the eighteenth century introduced new history of crime and criminality. The base of industrial capitalism depends on coercion or robbery.9

England, among the other European nations, played the worst role ever in obtaining wealth by surrendering all morals and ethics they ever had. They made wealth by plundering their provinces and adopting the devastating barbaric method in doing it.  There can be no denial of the fact that the very structure industrial capitalism is built of crimes and criminality. In this manner, as being examined, the introduction of white collar crimes occurred the Industrial Revolution in Industrial Revolution in Western industrial societies which drove a tremendous effect all through the globe. In any case, it is to be comprehended that the eagerness of profiting by the general population of the high society was not kept to the limits of Europe. The Industrial upheaval tossed a worldwide effect whereby overall individuals enjoyed profiting.

There were passed numerous anti-trust laws or anti competition laws to check every corruption or competition by various nations before the Sutherland’s address at the American Sociological Society like Clayton Antitrust Act10 , Sherman Antitrust Act11 etc. yet none of them was affected with a solid restricting power and violations expanded as opposed to diminishing. In this way, one might say that Sutherland was not the first to concentrate consideration on the perils of the general public committed not by the traditional criminals, but rather by the upper socio-economic of the general public however in reality he is the main individual who coined the term ‘white collar crime’ which alludes to the crimes or dangers referred to above.

White-collar crimes are to be considered as a worldwide wonder to which India is no special case. White-collar crimes developed in India with the coming of the British colonization amid the time of industrial capitalism. Before that, examples of men working with the District treasury stealing with the cash kept under his safe custody or bribing practiced among the authorities were found. In this way, the white-collar crimes were restricted as far as possible.

Fundamentals of White-collar Crime:12

There are certain fundamentals which exist of white collar crime, they are:

Ø  Involving violation of legal codes.

Ø  Such offense takes place either directly or indirectly in connection with legitimate work.

Ø  The main aim is to gain money.

Ø  Such crimes are not against any specific individuals or any firms rather it is against the society at large.

Ø  Any person of whatsoever class if commits the crime in course of his occupation then will be treated as a white-collar criminal, such persons will not be restricted to only higher strata people.

Ø  The organization likely being engaged with such crimes engages themselves only in those kinds of white collar crimes which involves high stakes but lesser chance of detection.

Ø  In these kinds of crimes the perpetrator regards himself as a respectable citizen.

Ø  Organisations which are engaged in such kind of crimes try the policy of fixing of cases in case they get caught.

Ø  The effects of such crimes are much more serious in nature than ordinary crimes.

Features of White Collar Crimes:

There exist some broad qualities of white collar crimes and they are as per the following:

·         White collar crimes are peaceful in nature rather than being violent.

·         These crimes involve abuse of power granted.

·         Concealment is an important feature of such crime.

·         Mostly in all cases it is profitable for the accused.

·         The perpetrator is not usually a man who belongs from a disturbed socio-economic background so as to say a homeless person or addicted to drugs as usually in the case of traditional crimes.

·         In case of white collar crimes victims may not be individuals but rather the society at large.

·         Such crimes are a result of fraud rather than the use of force.

·         The reason behind the commission of such crime by the perpetrator is greed or rapaciousness, not lust or hatred.

The contribution of Committees and Reports regarding the prevention of White Collar Crimes under the Indian framework:

In the year 1962, the government had appointed the Santhanam Commission to contemplate the issues and difficulties made by corruption and to recommend Administrative Reforms to deal with the same. In the commission’s report the committee gave a clear picture of white-collar crimes committed by people of respectability, for example, businessmen, industrialists, contractors and suppliers as also the corrupt public officials.In 1970 the government appointed Wanchoo committee to consider the issues of Black Money and the evil impacts of black marketing, foreign exchange violation, and Hoardings and to recommend measures to adequately address the issue. It was the recommendations of these committees that brought about detailing of various laws like Foreign Exchange Regulation Act 1973, Control of Foreign Exchange and Prevention of Smuggling Act 1974, The Smuggling Act 1976.  Further, the Malimath committee in 2003 proposed that Indian Penal Code should be reviewed and a different code on social welfare offenses ought to be embedded giving stringent punishments including increased social stigma. The Santhanam committee made some momentous recommendations in view of which the government of India additionally acted which brought about the following:

Ø  In 1964, a one-man Central Vigilance Commission (CVC) was set up as an apex body to look into the matters of corruption.

Ø  Prevention of Corruption Act 1947 was replaced by the act of 1988 which expanded the definition of corruption and Public servant to include certain categories of legislators and other holders of public office.

Ø  In 1963 Delhi special police establishment was transformed and converted as Central Bureau of Investigation with more broad powers and responsibilities.

The committee also classified socio-economic offenses into eight categories which are as follows:

·         Offences calculated to prevent or obstruct the economic development of the country and endanger its economic health;

·         Evasion and avoidance of taxes lawfully imposed;

·         Misuse of their position by public servants in making of contracts and disposal of public property, issue of licenses and permits and similar other matters;

·         Delivery by individuals and industrial and commercial undertakings of goods not in accordance with agreed specifications in fulfillment of contracts entered into with public authorities;

·         Profiteering, black marketing, and hoarding;

·         Adulteration of foodstuffs and drugs;

·         Theft and misappropriation of public property and funds; and

·         Trafficking in licenses and permits etc.

It additionally prescribed another section to be added in the Indian Penal Code, however, 29th Law Commission of India Report doubted such need and did not consent to the proposition and further observed that “such offenses are better left to be dealt with by special and self-contained enactments which supplement the basic criminal law.”17  Again a futile endeavor was made by 42nd Law Commission of India Report 1971 to revise of Indian Penal Code. 47th Report of the Law Commission of India advised for revision of IPC were through the report they had recommended exclusion of the Probation Act to social and economic offenses.

Types of White Collar Crimes:

The white collar crimes can be categorized in the following ways:

v  Adulteration: Adulteration of foods and drugs.


v  Bribery: Whenever money, services or any information is offered with an aim to impact the actions, opinions, and decisions of the taker, constitutes bribery.

v  Bank Fraud: Bank Fraud intends to take part in such exercises keeping in mind the end goal to cheat a bank or utilizing unlawful means to acquire resources held by financial institutions.

v  Blackmail: Blackmail means demand for money by deliberately causing to some individual physical damage or uncovering his privileged insights.

v  Black Money: A demand for money or other consideration under danger to do substantial damage, to harm property, to blame for a crime, or to uncover mysteries.

v  Computer Fraud: These are very common white collar crime nowadays whereby perpetrators known as hackers steal information of an individual which they keep in their computers like bank data, Master cards, and restrictive data.

v  Consumer Fraud: It is a standout amongst the most well-known and unique white collar crime as here vendors or merchants confer misrepresentation with the buyer by the method for Selling, Advertising and repairing.

v  Embezzlement: When a person entrusted with property uses it for his own beneficial purposes is embezzlement.

v  Extortion: When a person unlawfully obtains the property of another by causing a wrongful loss to the other by use of force, fear, violence.

v  Forgery: At the point when a man passes false or worthless instruments, for example, cheque or fake security with the purpose to cheat.

v  Insider Trading: At the point when a man utilizes inside, confidential, or advance information to exchange offers of publicly held organizations.

v  Money Laundering: Money laundering implies the camouflage of the origin of illegally obtained money.

v  Professional Crimes: Professional or occupational crimes are committed by doctors, engineers, lawyers individually or sometimes institutionally they commit the crime through hospitals, associations, institutions etc. involved in committing those crimes.

v  Tax Fraud: Tax fraud implies evading tax by giving incorrect data in tax documents or illicitly moving property keeping in mind the end goal which is to avoid tax.

White Collar Crime is unavoidable and is present in every one of the professions and occupations in the society. These crimes are very common in the business world and Indian trade and violation of Foreign Exchange Regulation Act and export and import laws are resorted to making enormous benefits.

The relationship between White Collar Crime and Corporate India:

In the 1940s, American sociologist Sutherland instituted the term white-collar crime, depicting it as a wrongdoing conferred by a man of respectability and high societal position over the span of his occupation, as discussed in the article earlier. Since at that point, the observation and comprehension of white-collar crime have changed in the business biological community.

The book Managing Business Integrity by Stefan Heissner expresses that the theoretical media presence in light of fraud and corruption related cases has prompted the advancement of an exceptionally sharp sense of social awareness and understanding of white-collar crime.

The effect of white-collar crime on corporate India is huge. Today, fraudsters are persuaded by eagerness and monetary profit more than at any other time, displaying deviant and exploitative conduct. A few of the new patterns seen include:

·         The average age of fraudsters is considerably getting lower day by day.

·         Increasing instances of fraud or different wrongdoings being recognized by whistle-blowers.

·         Increase of technology to sidestep detection, e.g., utilizing instant messengers and online networking systems rather than messages.

·         Innovative methods of kickbacks and favors acquired.

It has been seen that the culprits of cubicle white collar crimes usually do not have an earlier criminal record and have firm faith that their acts will go undetected on the grounds that they are not being watched. They additionally don’t think about themselves being guilty parties and tend to proceed with the offenses until recognized.

White-collar crimes can be a vital factor that could influence economies in front of geopolitical risks, misuse in offshore jurisdictions, terrorist financing and migration.

The testing limits of the present dynamic scene have induced organizations to embrace a few measures to battle white collar crimes. Some key patterns in such manner are as per the following:

§  The development of e-commerce industry: Expanded digitization has prompted the development of ordinary physical stores to online commercial centers, which are offering items and also benefits. The change from physical deals to the online stage has additionally convoluted the hazard situation, influencing present-day e-to tail more helpless to desk violations. While factors, for example, internet penetration, declining data tariffs, across the board utilization of cell phone gadgets, presentation of 4G, installment models of payment, for example, cash on delivery have been drivers for development, however, have likewise made difficulties in taking care of dangers. Key issues incorporate outsider dangers, for example, the offer of fake merchandise, conspiracy with representatives, coordinations misrepresentation, for example, burglary or diversion of funds, information security, supply chain fraud to give some examples.





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