What is white collar crime?

White-collar crime is a nonviolent crime committed for financial gain. According to the FBI, a key agency that investigates these offenses, “these crimes are characterized by deceit, concealment, or violation of trust.” The motivation for these crimes is “to obtain or avoid losing money, property, or services or to secure a personal or business advantage.”Error! Reference source not found.0  

As per the definition given by the FBI The term white collar crime is now synonymous with the full range of frauds committed by business and government professionals. These crimes are characterized by deceit, concealment, or violation of trust and are not dependent on the application or threat of physical force or violence. The motivation behind these crimes is financial—to obtain or avoid losing money, property, or services or to secure a personal or business advantage. https://www.fbi.gov/investigate/white-collarcrime

White Collar Crimes in India:

The earliest known case of white-collar crime dates back to 15^th century in England. There has been a case widely known as the carrier’s case of 1473, wherein the agent who had been entrusted to transport wool attempted to steel some of it to himself. It was during such celebrated case that the star chamber and exchequer chamber of the England court of law adopted “Breaking Bulk” doctrine. However, with astonishingly rapid growth of Industrial capitalism, the jurisprudence of crime came to be based on coercion and robbery.

In India it is an undeniable truth that commission of crime has increased exponentially ever since human beings began to live together. A few kinds of crimes are deemed to be old while with changing dynamic of our everyday lives, many new forms of crime continue to take from in the deviate minds of the society. The concept of white-collar crime is not a new phenomenon. There are numerous references to such crimes since the Vedic period in India’s ancient and medieval period.

Corruption might just be one of the species of white-collar crimes but it has always been the most talked about in all Spheres-social, Economic, Political even though not much stringent steps/actions have been taken to curb these crimes that been taking place on and on. The Indian Penal Code, 1860. Is perhaps oldest/earliest most comprehensive codified criminal law in India. It specifically does not talk about the white-collar crimes but deals with many offences which are closely related to white collar crimes such as bribery, corruption, counterfeiting of coins, government bonds, stamps, of offences relating to weights and measures offences relating to adulteration of foods and dugs, Misappropriation of public property and criminal breach pf trust, cheating, forgery, and offences relating to counterfeiting of documents and currency.

The reason for this type of huge growth in this white-collar crime is due to fast growth economic development in the world-wide countries also industrial growth. The Santhanam committee report stays that white collar crimes are committed by people belonging to highs social status.

The reports of vivin bose commission of enquiry which looked into the affairs of Dalmia groups alleges that even big business men even indulge in committing of white-collar crimes themselves like forgery, corruption, falsification of facts, tampering with records for personal gains and tax evasion. Even similar observations been made by the then Hon’ble Justice MC Chagla while dealing with the business case of tycoon Mundra who wanted build up a business empire by using dubious means. There were as many as 124 prosecutions against the business magnate and companies owned or controlled by him between 1958 to 1960 and as many as 113 of them resulted into conviction. With the backdrop and scams like that of Satyam scam, fleeing Vijay Mallya, 2G scams and many more, it was in 2018 that the Government of India passed Fugitive Economic Offenders Act, 2018

According to the changing dynamics of white-collar crime in India, the Central Bureau of Investigation (CBI) has found a total of 6,533 cases of corruption over the last 10 years, of which 517 cases have been recorded over the last two years. Statistics shows a trading value of around 4000 crores being made using fake or duplicate PAN Cards. 

Impact on Corporate world

White-collar crime has a significant impact on corporate world. Now, more than ever before, fraudsters are driven by ambition and financial gain, exhibiting deviant or exploitative conduct. Some of the new trends are as follows:

Falsification of financial information

1. False accounting entries or misrepresentation of financial position of the company.
2. Fraudulent trades designed to inflate profits or hide losses
3. Illicit transactions in order elevate from regulatory surveillance

Self-dealing by corporate insiders 

1. Insider trading (trading based on material, non-public information); kickbacks
2. Misuse of corporate property for individual gains 
3. Individual tax violations related to self-dealing

Fraud in connection with another legitimately operated mutual hedge fund

1. Late Trading
2. Certain market timing schemes
3. Falsification of net asset values.

Types of White-collar crimes

1. Bank Fraud
2. Bribery
3. Cyber Crime
4. Money Laundering 
5. Tax Evasion

1. Bank Fraud: Bank fraud is a crime to deceive and gain undue advantage. Bank fraud is fraud committed on banks by the business people by taking loans on representation false financial reports to the Bank in order attain a loan. It is also related to the manipulation of the negotiable instruments like cheque bouncing, securities, bank deposits etc. It is concern to the public as it is having a relationship of trust between public and bank.
2. Bribery: It is common type of white-collar crime. Bribery is of giving a sum or something to an official or person in order influence or in return of a favor. It is done in order insist to do something or to stop the work to be done by the one.
3. Cyber Crime: It is the biggest cause leading to white-collar crimes in India. This is one of the ways where white-collar’s are using the advanced technology to commit frauds, manipulate and other crimes that lead to white collar. It is a crime that is related to “Computer Network”. As the advanced technology is growing around there is also a rapid increase of crime related to technology. 

It is one of the dangerous everyone today is connected somehow with a digital technology and there is much chance that it being attacked cybercrimes. It threatens both the nation and personal security of a person, also cybercrime against women is also rising. By the use of telecommunication networks, mobile phones cyber stalking, sending obscene messages and pictures by criminals to women is also increasing.

• Money Laundering: Money laundering is a crime in which the people disguise the currency by laundering it for appropriate personal gains. It is like manipulating the gains of earned money in illegal manner and showing it that it has been earned in legal manner by false profit gains. In simple words it is of showing illegit earned as legit earned money.
• Tax Evasion: It is absenting to give the original tax by conceal the taxable income and his/her original financial earnings to the authorities in simple words it means hiding money that is been earned by illegal means in order to save himself from the authority’s scrutiny to more tax payment. It has negative impact on social.

Other types of White-Collar Crimes

1. Blackmail: Section 503 of the Indian Penal Code, 1860 defines blackmailing or criminal intimidation as, making a demand for money or any other consideration by imposition of threat to cause physical injury, or to cause damage to one’s property, or to accuse one of a crime, or to expose somebody’ secret
2. Credit card Frauds: These frauds are committed when one person uses the credit card of another person unauthorizedly to obtain goods of value, he is said to have committed credit card fraud against the other person