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ACKNOWLEDGEMENT-

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TABLE OF CONTENT

1. INTRODUCTION

2. WHITE COLLAR CRIME- Its Definition and Nature

3. TYPES OF WHITE COLLAR CRIME

4. WHITE COLLAR CRIMES IN DIFFERENT SECTORS

5. IMPACT OF WHITE COLLAR CRIMES- Why it is huge than Blue Collar

Crimes?
6. ADVERSE AND NEGATIVE IMPACT OF WHITE COLLAR CRIMES

7. WHITE COLLAR CRIME AS AVOIDING VICTIMIZATION

8. MEASURES TO PREVENT COMMISSION OF WHITE COLLAR CRIMES

9. CONCLUSION

10. BIBLIOGRAPHY

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INTRODUCTION-

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WHITE COLLAR CRIME – Its Definition and Nature-

White-collar crime, in other words, corporate crime, is a definition given to financially

motivated but non-violent crimes committed by individuals, government professionals, and
businesses.

Sociologist Edwin Sutherland described the term first in 1939. According to Sutherland,
white-collar crime was defined as a crime committed by a respectable and high social status
person during the profession.1 Sutherland further pointed that a white-collar crime is more
harmful than ordinary crimes because the financial loss to society from burglaries, robberies,
larcenies etc. The most dismal aspect of white-collar crime is that there is no effective
programme for the enforcement of criminal law against them and influential persons
involved in these offences are able to resist enforcement of law against themselves.2

Before Sutherland introduced the concept, this was considered largely inadequate for the
upper classes. Interestingly, when Sutherland published the first book on the topic, some of
America's largest corporations also successfully sued for censoring the book.

According to the FBI, a key agency investigating white-collar crimes, "these crimes are
characterized by concealment, deception, or breach of trust". They have special teams to
investigate them in local, regional, and international scopes.3

White-collar crime by their nature are such that the injury or damage caused as a result of
them is so widely diffused in large body of society that their gravity in regard to individual
victim is almost negligible. It is probably for this reason that till late these crimes did no
attract much attention as they do not carry with them any loss of social status of the
offenders even if he is caught or detected.

The issue's spectrum has expanded since its definition was introduced and understood by
society. The main reasons for this are that new technologies and increasing regulatory
pressures in this field inspire new crimes. Looking back at the past, high-profile individuals
convicted of white-collar crimes in decades include Ivan Boesky, Bernard Ebbers, Michael
Milken, and Bernie Madoff.

TYPES OF WHITE-COLLAR CRIMES-

1
https://sanctionscanner.com/blog/white-collar-crime-are-all-white-collar-innocent-330 (Visited on 20th Oct
2022 at 13:23)
2
Paranjape, N.V., Criminology and Penology, Central Law Publications, 18th Edition (2019).
3
https://www.fbi.gov/investigate/white-collar-crime, ( Visited on 21st Oct 2022, at 12:12 )

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 1. Fraud

Fraud is a broad term that encompasses several different schemes used to defraud people of
their money. One of the most common and simplest is the offer to send someone a lot of
money (say, Rs.10,000,00) if they will simply send the fraudster a little money (say, Rs.300 –
the fraudster may represent the smaller sum as being a processing or finder’s fee). Of course,
the fraudster gets the money that is sent to him but never sends out the money he promised to
send.

2. Insider trading

Insider trading is trading done with the benefit of the trader possessing material, non-public
information that gives him or her an advantage in the financial markets. For example, an
employee at an investment bank may know that Company A is preparing to acquire Company
B. The employee can buy stock in Company B with the expectation that the company’s stock
will rise significantly in price once the acquisition becomes public knowledge.

3. Ponzi scheme

Named after Charles Ponzi, the original perpetrator of such a scheme, a Ponzi scheme is an
investment scam that offers investors extremely high returns. It pays such returns to the initial
investors with the newly deposited funds of new investors.

In the case where the scammer is no longer able to attract a sufficient number of new clients
to pay off the old ones, the scheme collapses like a house of cards, leaving many investors
with huge losses.

4. Identity theft and other cybercrimes

Identity theft and computer system “hacking” are two of the most widespread computer
crimes. It’s estimated that losses from identity theft in the United States alone totalled nearly
$2 billion in 2019. California, with over 73,000 cases of identity theft reported, was the state
whose citizens suffered the most from the crime – Florida was a very distant second with
37,000 reported cases.

5. Embezzlement

Embezzlement is a crime of theft, or larceny, that can range from an employee taking a few
dollars out of a cash drawer to a complex scheme to transfer millions from a company’s
accounts to the embezzler’s accounts.

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6. Counterfeiting

Our money has become more colorful and expanded in detail because it had to in order to
combat counterfeiting. With today’s computers and advanced laser printers, the old currency
was just too easy to copy. However, it’s questionable how successful the government’s
efforts in this area have been. Rumor has it that very high-quality copies of the new $100 bill
were available within 24 hours of the new bill first being issued.

7. Money laundering

Money laundering is a service essential to the needs of criminals who deal with large
amounts of cash. It involves funneling the cash through several accounts and eventually into
legitimate businesses, where it becomes intermingled with the genuine revenues of the
legitimate business and is no longer identifiable as having originally come from the
commission of a crime.

WHITE COLLAR CRIME IN DIFFERENT SECTORS-

White collar crimes are divergent in nature which prevails almost in all the sectors of the
society such as:

Medical sector: In medical sectors we often witness white collar crimes which includes such
as issuing false medical certificates, aborting a child illegally, sale of adulterated drugs and
medicines to the patients, sex determination of a child, fake prolong of treatment and so on.

Education sector: In this sector corruption takes place very frequently where it includes such
as accepting donations instead of merit-based admissions, collection of huge money, teachers
involving in unscrupulous practices etc.

Legal sector: People generally used to say that ‘Justice is in hand of whom, who have
money’. Therefore, this includes white-collar crimes such as fabricating false evidence and
documents, violating the ethical standards of legal profession, illegal methods of evasion of
tax, threatening witness of opposite party etc.

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Corporate sector: White collar crimes occur very frequently in corporate sectors. It provides
enormous opportunities where the people having higher status in the company committee
such crimes very often. It includes various white-collar crimes such as unfair labour
practices, bribing, forming illegal contracts, frauds etc.

IMPACT OF WHITE -COLLAR CRIME – Why it is huge than Blue Collar Crimes?

White collar crime can have a large impact on the society and it does not only affect the
criminals. It is also called as a socio-economic crime because it has a direct impact on the
society. When a white-collar crime is committed huge losses on business occur which have a
direct impact on the consumers and the society. 4 There are various numbers of frauds and
scams that had been exposed in our country from the past few years like 2g scam, havala
scam, banking scam, fodder scam and many more. 5 Due to these frauds and scams the
economy of our country has shambled. And then to make up these losses of fraud or any
scams, they increase the costs. This means higher prices for the consumers in the way of
higher taxes, government revenue, and increased insurance costs. The impact of white-collar
crime on society is great. There is loss in every field from the costs of commodities to the
securities and insurance.6 One financial fraud can affect the businessmen, the investors and
the government. All you need is one bad employee who out of greed of money will commit a
financial fraud and will cause harm to the reputation of the company, lack of profits and gain
of losses

ADVERSE AND NEGATIVE IMPACT OF WHITE -COLLAR CRIME-

4
Aroj Ali,” Impact of White Collar Crime and Essence of Special Enactment:Bangladesh Perspective”,
International Journal of Humanities Social Sciences and Education (IJHSSE), Volume 6, Issue 2, February
2019, PP 41-49

5
Brian K Payne, “White-Collar Crime: A Text/Reader”, Sage Publication, (1990).
6
McFayden, Elgie, Global Implications of White Collar Crime (January 3, 2010). Available at SSRN:
https://ssrn.com/abstract=1530685

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We know that commission of any white-collar crime effect our lives and other sectors
enormously. The following are mentioned below how white-collar crimes effect these in
different ways-

Impact on companies: White collar crime causes huge loss to the companies. To recover
from such, they increase the cost of their products which ultimately affects the end users.
Salaries of the employees get reduced and investors as well as company’s employees are
unable to repay the loans, which in turn has an adverse impact on economy. 7

Employees are endangered by white collar crimes. Many of the employees get reduced
salaries and many of them are fired from their respective jobs due to the huge loss suffered by
the company. They also feel conscious regarding their working conditions, and start doubting
if they are safe or not and find it difficult to trust their employers.

Impact on offenders: White collar crimes are rising day by day because they mostly are
unreported. They have no eye witnesses as they are committed by using computers in
personal spaces. It makes tracking of these offenders a lot difficult and as there is an absence
of strict punishments, it raises the confidence of the offenders.

Impact on victims: In white collar crimes, old aged people are the most common and easy
target as they have a very minimal access to the liquid assets and they have less cognitive
ability than the young generations. The victims of these crimes may suffer from various
diseases such as depression, stress, anxiety, panic attacks, etc. Many a times, people suffer
from suicidal tendencies as the losses are huge and unbearable.

Impact on society: White collar crimes are very harmful for the society. People who should
set a moral example and should behave responsibly are the ones who are committing these
crimes. Throughout time, many people have argued about how these white-collar crimes
should be punished. Scams and frauds committed not only impacts the investors but it also

7
Harkunwarjot singh makkar, Ankit Paul Kuar “WHITE COLLAR CRIMES IN INDIA: A SET BACK FOR
PROGRESSIVE NATION BUILDING”, Journal of Positive School Psychology http://journalppw.com
2022, Vol. 6, No. 4, 3549 – 3553

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deeply shakes the root of the economy. 8 Due to these crimes, the society at large as a whole
gets affected. Many people who have been affected by these have ended up losing all their
life savings, which has led to ruining their families and ultimately pushing them to commit
suicide. And when the network is bigger, more people can be affected, even companies can
end up going bankrupt as a result of these multi- million dollars White-Collar Crimes.

There are some of the cases mentioned below having huge impact on the country’s
economy9-

Mundhra Scam Case– This scam is also considered as the first scam of independent India.
Haridas Mundhra, an industrialist and stock speculator sold fictious shares to Life Insurance
Corporation thereby defrauding LIC by 12 crores. Mr. Jawahar Lal Nehru, set up a one-man
commission headed by Justice Chagla to Investigate. Justice Chagla concluded the matter and
Haridas was found guilty and was sent to imprisonment of 22 years. Although, the
punishment of imprisonment had been provided to the offender but it no way remitted the
loss caused. This had evasively effect the country’s economy and at the time when our
developing country was paving its way towards working nation just after independence, the
amount of 120 cores stands very valuable.

Harshad Mehta Scam Case- The Harshad Mehta Scam case shocked the entire economy of
India. He fooled many investors by taking advantage of loopholes of the system.

2G Spectrum Scam- This case was basically a telecommunication and political scandal. In
this scandal many politicians and government were involved. The scam was about the
allocation of unified access of service licence. The former telecom minister A Raja has
evaded norms at every level and carried out dubious 2G scam in 2008 which shacked the
country’s economy drastically.

East India Company Case- The East India Company was a crown-chartered trading company.
It was owned privately but had a mandate to benefit the British State commercially and
politically. First and foremost, ECI was an agent of the crown. It was first MNC in the world
that pursued investment opportunities as well as territorial power. To achieve these ends, the
ECI’s conduct was inconsistent. Sometimes, the company complied with ethical practice in
8
Jesus Junior Mosqueda Ramirez,” White Collar Crime and Its Effect on Society”,
https://digitalcommons.unl.edu/cgi/viewcontent.cgi?article=1174&context=ncpacapstone ( Visited on 13th Oct
2022 at 16:50)
9
Paranjape, N.V., Criminology and Penology, Central Law Publications, 18th Edition (2019).

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safety and financial matters. At other times it readily engaged in economic theft and bribes,
or breached civil liberties and human rights.

WHITE COLLAR CRIME AS AVOIDING VICTIMIZATION–

Many victims are unaware about their victimization and harms are less direct and more
diffused than it is with conventional crime. Also, some forms of victimization are difficult to
measure, particularly where victims, as is the case for example with many frauds, pollution
and consumer crimes, are unaware of any harm, some forms of victimization can be and have
been researched. The failure of white-collar crime to fit conventional notions of crime and
victimization has been a major theme in white- collar crime. 10

Most victim surveys, crime audits, discussions of community safety and crime prevention
rely on conventional constructions of crime and victimization, whereas white-collar crimes
continue to be seen as ‘not really crime’.11

The construction of white-collar crime as ‘not really crime’ also meant that many victims of
white-collar crimes do not see them as victims of crime and incident are not reported as
crime. As with the other form of crime, notably domestic violence such construction also
deny victimization. Many safety crimes are initially characterised as accidents, which implies
that they are unavoidable and inevitable, and mask the often routine neglect of regulations
which underlie them. It can also be argued that the workers choose to work in risky jobs or
that consumers choose to buy products – the ideology of caveat emptor stresses that the buyer
should beware. Nonetheless the buyer cannot generally detect many fraudulent consumer
practices. Ideological factors are therefore of considerable significance construing white-
collar victimization.12

Victimization from conventional crime is represented as involving an individual victim-

offender relationship, in which the offender intentionally causes direct harm to the victim. By
comparison white-collar victimization is represented as impersonal, displaying a lack of
interpersonal contact and involving harm caused indirectly, often, as is the case with

10
Y Delord-Raynal, “Victims of White- Collar Crimes (From Victim in International Perspective”, P 257-273,
1982, Hans Joachim Schneider, ed. - See NCJ-86192)
11
Dr. Petter Gottschalk, “Victims of White-Collar Crime”,publishing House "ANALITIKA RODIS"
(analitikarodis@yandex.ru ) http://publishing-vak.ru/
12
https://www.impactlaw.com/criminal-law/white-collar, (Visited on 12th Oct, 2022 at 13:40).

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corporate crime, without any intent to cause harm. Thus, white-collar victimization lacks a
direct cause-effect relationship. 13

White-collar victimizations are often portrayed as ‘victimless’, with corruption and insider
dealing particularly being represented as involving no direct, measurable harms. The impact
of white-collar crime is seen to be not on individual but on impersonal abstract entities such
as ‘the public health’, ‘the environment’, trading or commercials etc. This can mask the
reality of individual victimization.

Feminist work also directs attention to a ‘continuum of violence’ in which women experience
‘unsafety’, through a variety of behaviours ranging from, at the most severe end, rape,
through sexual assault, harassment and verbal abuse. Some forms of white-collar crime can
be similarly conceptualised. Workers may suffer range of harms from colleagues abusing
their occupational roles through forms of bullying, intimidation and harassment reaching a
peak with exploitative rape. Some sales practices, sometimes described as ‘aggressive’ may
be outrightly fraudulent whereas others may be experienced as invasive and unpleasant and
been described as marketing malpractice. As referred to above, the discourse of conventional
criminology also refers to general incivilities and anti-social behaviour, which could
reasonably be applied to companies and business whose activities, some of which might be
experienced as ‘nuisance’ rather than as crimes, adversely affect the quality of life.

MEASURES TO PREVENT COMMISION OF WHITE-COLLAR CRIME-

The top investigating agencies of the country like the Central Bureau of Investigation, the
Enforcement Directorate, the Income-tax Department, The Directorate of Revenue
Intelligence and the Customs Department, needs strengthening, by way of implementing
strong regulating policies.14 The Central Vigilance Commission should monitor the working
of the officials sitting at top positions and also cross-check their works, so as to ensure
transparency in the system.

13
https://study.com/academy/lesson/who-is-a-victim-of-white-collar-crime.html Visited on 12th Oct, 2022 at
16:40)
14
Brady Baxter, “Identifying, Preventing & Prosecuting White-Collar Crime”,
https://www.weber.edu/wsuimages/BIS/Secondary%20Research/Brady%20Baxter.pdf

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 As the method of commission of such white-collar crimes is advancing, so should the
training of the investigating officials. It often happens that ageing officers are well
experienced to understand the nature and techniques, but are not able to utilise the technology
for tracking the suspect. This happens due to lack of training. So, every investigating officer
must be trained in such a manner that, no matter how complicated the case is, they would be
able to easily resolve it.

To uproot the existence of such crimes, it is very important to include strict laws into the
system. Less amount of fine and shorter period of imprisonment makes it very casual for the
offenders to commit such crimes. 15

Fast track courts and tribunals should be set in all the parts of the country for the early
disposal of these cases. The tribunal should be provided with the power to fine or imprison
someone who has been held guilty. Such measures would lower the rates of occurrence of
white-collar crimes.

The electronic and print media should be utilized in the right way to spread awareness about
white collar crimes. The general people need to be aware of such crimes and that they are
taking place everywhere, from a small cafe to big multinational companies. Also, they need
to be aware of the remedies they could seek in case they become victim to such crimes.

Stringent laws and hefty fine and long-term imprisonment should be given to the offenders
for committing such crimes. And for this to happen, the Indian Penal Code, 1860 should be
amended and include provisions for the white-collar crimes. For example, the IPC could have
a separate chapter dealing with white collar crimes.16

The government may establish a separate body which would look into the matter of crimes
and criminality prevailing in the country. The independent body could be named as the
National Crime Commission. Since their entire work would be related only to the crimes and
would be an independent body, it could work more efficiently towards reducing criminality in
the country.

15
Aneel Sagar, ” The Concept of White-Collar Crime: Nature, Causes, Political and Legal Aspects in
Accountability and Way Forward”, Knowledge Bylanes, Date: June 30, 2019
16
https://timesofindia.indiatimes.com/readersblog/mywording/ (Visited on 23rd Oct, 202 at 12:12)

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White-collar offenders should be dealt with sternly by prescribing stiffer punishments
keeping in view the gravity of injury caused to the society because of these crimes. The
Supreme Court, in M.H Haskat v. State of Maharashtra,17

Creating public awareness against these crimes through the media of press, platform and
other audio -visual aids. Intensive legal literacy programmes may perhaps help in reducing
the incidence of white-collar criminality to considerable extent.

Further, a separate chapter on white-collar crime and socio-economic crimes should be

incorporated in the Indian Penal Code by amending the code so that white collar criminals
who are convicted by the court do not escape the punishment because of their high status. For
this Special Tribunals should be constituted with power to award sentence of imprisonment
up to ten years for white collar criminals.18

Besides this, there is an urgent need for a National Crime Commission which may squarely
tackle problem of crime and criminality in all its facets.

Above all, public vigilance seems to be the cornerstone of anti-white collar crime strategy.
Unless white-collar crimes become abhorrent to public mind, it will not be possible to contain
this growing menace.

17
(1978)3 SCC. 544, It must, however, be noted that this being a case of forgery punishable under I.P.C., is not
covered under white collar criminality.
18
Bill Snyder, “How to Stop White-Collar Crime”- A federal judge says fear of prison is the best way to deter
bad behaviour, https://www.gsb.stanford.edu/insights/how-stop-white-collar-crime

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CONCLUSION-

It must be stated that a developing country like India where population is fast escalating,
economic offences are increasing by leaps and bound besides the traditional crimes. These
are mostly associated with middle and upper class of society and have added new chapter to
criminal jurisprudence. Toa great extent, they are an outcome of industrial and commercial
development and progress of science and new technology. With the going materialism all
around the world, acquisition of more and more wealth has become the final end of human
activity. Consequently, moral values have either changed or thrown to winds and frauds,
misappropriations, misrepresentation, corruption, adulteration, evasion of tax etc. have
become techniques of trade, commerce and profession. It is for the criminal law
administration to contain this tendency by stringent legislative measures. It is rather
disappointing to note the white-collar crime such as black-market activities, evasion price
violation, rent ceiling violations, rationing law violations, illegal financial manoeuvring etc.
by businessmen are widespread in society, no effective programme for repressing them has so
far been launched by the law enforcement agencies.

Perhaps the reasons for white-collar crimes being carried on unabated is that these crimes are
committed generally by influential persons who are shrewd enough to resist the efforts of law
enforcement against them.

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BIBLIOGRAPHY-

 Brian K Payne, “White-Collar Crime: A Text/Reader”, Sage Publication, (1990).

 Eugene Soltes, “Why They Do It: Inside the Mind of the White-Collar Criminal”,
Public Affairs Publication, (2016).
 Michael L. Benson and Sally S. Simpson, “Understanding White-Collar Crime: An
Opportunity Perspective” (Criminology and Justice Studies), Routledge
Publication,2nd Edition, (2014).
 Sutherland, Edwin, “White-Collar Crime”, Praeger Publishers Inc, (1983).
 Melissa L. Rorie ,“White-Collar Crime” (Wiley Handbooks in Criminology and
Criminal Justice), Wiley-Blackwell, 1st Edition, (2019)
 Paranjape, N.V., Criminology and Penology, Central Law Publications, 18th Edition
(2019).

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