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White Collar Crimes can be termed as ‘crimes committed by the privileged class’ or ‘crimes committed by a person who yields the socio-economic power of the society’. Such crimes are different than normal crimes as in a white collar crime the victim is a whole State while in a normal crime the victim is an individual/s. White collar crimes have contributed significantly to impact the growth of the economy in developing countries like ours.
Concept and Definitions
White collar crimes are different from blue collar crimes in the following manner:
- In a white collar crime, the person committing the offence is a highly educated person or is of high stature in the society unlike a blue collar offender who is a normal individual;
- A white collar crime is committed for the greed of money unlike a blue collar crime which could be committed out of mensrea;
- White collar crimes are more dangerous to society than ordinary crimes firstly because the financial losses are higher in a white collar crime and secondly because the damage is inflicted on public morale[1].
Edwin Sutherland defined white collar crime as “a crime committed by a person of respectability and high social status in the course of his occupation”[2].
However, it was E.A.Ross in his book ‘Sin and Society’ for the first time introduced the ‘criminaloid concept’ of white collar crime which implied immunity enjoyed by the perpetrators of these crimes.
Some of the other definitions given by penologists are :
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Sir Walter Reckless – “White collar crime represents the offences of businessmen who are in a position to determine the policies and activities of business”
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Paul Tappan – “White collar crime is a special type of solitary professional criminality. It involves the real violation of criminal law systematically by business, professional and clerical workers in addition to their occupation”.
White Collar Crimes in India
White collar crimes in India can be found in every industry, profession and occupation. Major forms of such white collar crimes in India are:
I. Business, Trade, Commerce, and Industry
Certain committees were formed in India to identify and report white collar crimes of which the ‘Committee on prevention of corruption’ lead by K.Santhanam submitted its report on the misdeeds of businessmen and industrialists relating to corruption thereby securing large and unearned profits[3]. the committee also noted secret hoards of foreign exchange are built abroad by Indian businesses in violation of the Foreign Exchange Act through under-invoicing of exports and over-invoicing of imports.
The ‘Monopolies Inquiry Commission quoted, ‘hoarding, profiteering and black marketing of essential commodities by traders in India has become chronic’.
II. Food and Drug adulteration
Food and drug adulteration crimes can cause irreparable damage to the health and lives of innocent citizens. According to the Pharmaceutical Enquiry Committee lead by S.L. Bhatia, about 35% to 70% of food products are adulterated and drug trade in India flourishes to a colossal extent[4]. The reasons for food and drug adulteration can be related to the following:
- Greed of the manufacturers
- Shortage of genuine goods
- Ignorance of poor consumers
- Lack of stringent laws/enforcement
III. Violation of tax laws
Non-payment of taxes results in a great loss to the State exchequer. Tax is avoided by giving an understatement of sales, suppression of profits, fictitious loss in shares, etc
IV. Black Money
Two parallel economies are present in India white economy and the black economy. The ‘Direct taxes enquiry committee’ lead by Justice Wanchoo[5] set out the following mishaps of black money:
- Loss of revenue to the State resulting in dearth for resources of national development;
- Such parallel economies existing side by side results in inequitable taxation wherein the honest taxpayer suffers in the process;
- The general moral fibre of society is adversely affected.
V. Corruption
Corruption includes all forms of dishonest gains in cash, kind or position by persons in government or those associated with public and political affairs.
- Corruption in government – The saying that ‘power corrupts men and absolute power absolutely’ is applicable to the present situation in India. Corruption in government is rampant because they have close access to projects, schemes and programs. The corporate honchos, corrupt politicians and unscrupulous bureaucrats and brokers have caused huge damage to the financial institution of the State.
- Corruption in Political sphere – the corrupt form of political corruption in India is in the form of grafts, denotification, violation of election laws, and the abuse of political machinery with big businesses to name a few. The well-known cases of 2G scams and commonwealth games scam are typical examples of political corruption in India.
VI. White Collar Crimes in Profession
- Medicine and law are the noblest professions in India but unfortunately, they are also the most corrupt professions. Illegal abortions, false medical certificates unnecessary prolonged treatment, prescribing medicines which are not needed to a patient even after knowing the possible repercussions for the greed of money are some examples of white collar crimes in the field of medicine.
- White collar crimes amongst lawyers are also widespread like advising organized criminals, aiding in preferring false claims, fabrication of false evidence, etc.
- The incidence of white collar crimes are fairly high among other professionals like advertisers, property valuers, consulting, and other engineers or contractors of construction workers, etc.
VII. Bank frauds
Using fraudulent means to obtain money owned or held by a financial institution, chit funds, Ponzi schemes, and insurance frauds are some of the examples.
VIII. Extortion
Bribery and extortion are two faces of the same coin. Extortion is the use of a threat to obtain property or money.
IX. IT Frauds
(including but not limited to distribution of rogue security software) Consumer frauds (cheating the consumers in several technical ways) and Counterfeiting (obtaining money or products illegally or through fraudulent means) can also be considered as white-collar crimes.
X. Other White Collar crimes include
Crimes in sales-related occupation, crimes in religious systems, crimes in educational institutions, crimes in economic technologies, crimes in the real estate and housing sector, environmental crimes, and crimes by the corporate sector.
Conclusion
Although these crimes are all covered under different Acts and Codes of the Indian law like the Imports and Exports Control Act, 1950, Prevention of Food Adulteration Act, 1954; The Indian Penal Code, 1860; Information Technology Act, 2005; Prevention of Corruption Act, 1988; due to bad governance and with the increased use of newly developing technologies in various spheres of business, commerce, and industry, the scope of white collar crimes is getting wider.
New crimes are emerging and the commission of certain kinds of pre-existing crimes are being greatly facilitated. The creation of awareness amongst the public, proper enforcement of punishments, and increasing the penalties would help in a major way to control the commission of white collar crimes.
By: Vedashree P R Vedashree
The author is an Associate at J. Sagar Associates.
References
[1] White-collar crime, Available Here
[2] Khan, A. (2013), White Collar Crime-Study of Emerging India.2013.M.D University
[3] Law Commission Of India, Twenty-Ninth Report On Proposal To Include Certain Social And Economic Offences In The Indian Penal Code 1966
[4] Report of the Pharmaceutical Enquiry Committee, 1954, Available Here
[5] I. S. Gulati, Wanchoo Report: A Critique, Economic and Political Weekly, Vol. 7, No. 28 (Jul. 8, 1972), pp. 1314-1317, Available Here