ARE WHITE-COLLAR CRIMES:

ACCIDENTAL OR PRE-MEDIATED

BY: ANSHIKA SINGHAL (43225503518)

& RAKSHIT MUNJAL (42725503518)

JIMS, SCHOOL OF LAW, AFFILIATED TO GGSIPU

 ARE WHITE-COLLAR CRIMES:
ACCIDENTAL OR PRE-MEDIATED
Abstract.
Is it a crime to not fight for what is mine? Is white-collar crime even safe? Even if a white-
collar crime believes to be victimless, it affects someone! A crime happens when an
individual is at the authority position of prestige where they can command compensation. At
the local level, crime is likely to occur in the five to six-figure ranges. Is men's perspective
associated with white-collar crime irrespective of women? If all that happens, it is simple to
heist a bit, every month, till it sums up to a colossal amount. And that’s the trap of white-
collar crime!
Perhaps, the injured party considers them not smart enough to apprehend the scam that
detracts the assets. The consciousness about white-collar crime positions it as a crime far
more significant as opposed to car theft, but not as much as significant when compared with
serial killing.
Any practice that assesses gain over humankind is a vicious indeed. In simple words, the
standard is absent, and such a practice will, in due course, collapse once its true light comes
across by the masses. Apparently, private enterprise is a modern system. Corruption has been
the root of the demise of advancement. Our perspectives on white-collar crime may vary.
India is no stranger to white-collar crime. It's all about the scale.

White-collar crime: A Peak Through

Present-day analysis of the term ‘crime,’ we naturally presume that it comprehends civil or
criminal offences. Aggrieved individuals resulting in assault, dacoity, arson, rapes or even
disablement start these offences. Regardless, corporations or individuals perpetrate some
offences. They frequently commit these malpractices using off-the-record data.
Welcome to the White-Collar Crime (WCC) Regime. The term "burglar" and "business men"
are identical. The wrongdoers attempt not to stain their hands in their work. They ponder by
mapping out what they want contrary to bringing the use of their muscles. These offenders
are perilous as attackers and killers. The foremost and respectable individuals are offenders of
white-collar crime. Some eminent, wealthy elite criminals of WCC are Ivan Boesky, Nirav
Modi, Vijay Mallya, Richard Nixon, Bernie Madoff’s “Ponzi scheme” many more. It became
a habitual modus operandi for individuals to buy illicit profit without procuring the law and
to dodge being cited as criminal.
Prof. Edwin H. Sutherland, a well-known sociologist and criminologist, popularized the term
"white-collar crime" in 1939, defined it as "crime perpetrated by an individual of
respectability and high social position in pursuit of their work.” In simple words, it states that
it is malfeasance in office by a person who is in authority — controversial as it is general.
Sutherland’s study of WCC is famous for the offences which impact every level of society at
large by the individual (s) and the repercussions of the offence committed are extremely
pervasive.
Sutherland stated an individual who is in a socially respectable position while other
sociologist contradicted in that respect asserting that there is no definite or absolute parameter
where an individual is to be contemplated as a socially respectable position. He shed light on
criticism of his definition and application of white-collar crime. However, there were debates
and controversies. In subsequent writings, Sutherland underlined various types of WCC,
which included ad hoc crime, organizational crime, abusive by breach of trust and part of
business transaction.

As time passed by, WCC has a distinctive definition and distinctive sociologist viz primarily
overstated it:
“WCC is that infringement of law to in which punishments include the utilization of critical
control, impact or believe within the genuine financial or political regulations arranged for
the reason of unlawful benefit or to commit an unlawful act for individual or organizational
gain.” — Albert Reiss and Albert Biderman
As Prof. Hugh Barlow takes on “WCC was of the conclusion that the individual of prestige
hierarchy perpetrates in their professional competence similarly the individual of the base
perpetrates it.”
Since white-collar crime is undefined in code, it is a broader term to connote any offence
which has financial-motivational, thus; a person or persons of a certain class or position
wraps it up, for instance, executive of major corporations, government functionaries,
ministers, people who are in the power of decision making and who will power decisions
taken by those. White-Collar Crime is not a crime that involves physical violence normally,
i.e., nonviolent crime. They are planned crimes involve cheating or lying occur in
employment offences included are deceit, embezzlement, insider trading, counterfeiting,
Ponzi scheme and a violation of trust, and so on.
The desire in the wake of WCC is monetary. WCC is the flip side of blue-collar crime known
as traditional crime. Blue-collar crime is the offence of an under-privileged individual; white-
collar crime is an upper- or middle-class offence. In the case State of Gujrat v Mohanlala
Jitamalji Porwal &Anr (AIR 1987 SC 1321) Honourable Supreme Court observed that
although a person can murder a person impetuously upon passion being aroused, however
creating an economic downturn or committing economic crimes takes forethought. It requires
making strategies and calculation in term of creating personal gains.
White-Collar Crime has to turn out to be a colossal monetary forfeiture to society and if we
speak of it in India there have been thousands and Crores of the scam which have taken
monetary viability from our country. It creates a mammoth black hole of financial
deprivations in the country. Although Bribery, particularly the species of WCC, outworn the
hash out concern across the dimensions for the variants of white-collar crime — demographic
and concerning public affairs, barely the rigid activities have possessed to control these
threats. It's hard to perceive the total amount of money failing white-collar crime.
The government has encouraged various five-year plans, including major government
expenditure for various nation-building projects over the past 30 years. Officers,
professionals and contractors who were corrupt never had it so well. The country has
progressed, but white-collar criminals have siphoned off much of the funds intended for
economic initiatives.
The Central Bureau of Investigation (CBI) has determined 6,641 cases of malpractice in the
last few years, they have filed of which 647 cases in prior years. Record depicts market value
of 5,500 Crores putting counterfeit or replica Permanent Account Number. Maharashtra has
1020 cases which are a histrionic rise in the statistic in online cases. The research has shown
that roughly 2.9 million individuals have misplaced their card details that were heisted from
financial institutions. The bizarre and contingent rise within the development of technology
WCC leads the way to test for the government agencies as some incognito individual can
perpetuate these offences across the globe. In the light of such staggering numbers, it is safe
to say India is well within the grip of White-Collar Crimes.

White-Collar Crime: Mentes Reas

What is the mental condition of someone who consciously (ab)uses the authority, trust, &
assurance placed in him by investors, colleagues, and the public? As we know, it can commit
no offence without the presence of a malicious mindset. Even with strict or absolute liability,
there must be some men's rea. As a result, the phrase "non facit reum nisi men-rea or actus
non facit reu" interprets as a basic element of criminal culpability. The phrase "actus non facit
reum nisi mens sit rea" means that a crime requires both intentions and actions to be
committed. The focal point that has to be answered is whether they should deem a WCC a
no-fault liability crime and if so, what is the requisite for mens rea to commit it.

White-collar crime examines to be pre-mediated as the crime committed needs preparation.

It's not a one-day plan. If it is, we can call it an accident, which occurs only once in a blue
moon. Perhaps, one can perceive the rate of committing the crime as accidental is quite less
when compared to pre-mediated. Offenders entail dodgy negotiations, cold logical deception
strategy, distortion to innocent parties, and keeping things hidden from domestic and
international regulatory authorities. Any criminal act of a crime may be spontaneous,
occasional or having lost all or nearly all hope to carry out or into effect, but white-collar
criminals are a man of stature, especially social and professional, who have possession of the
finest funds allocated to them.
As said by Sutherland — WCC require constructive mens rea that is when the guilty mind is
in making.

Well, some offences do accidentally get categorized as WCC because they meet the
definitions, although there is an aspect of bona fide in the business's aim. Despite the best
efforts, the results do not meet the requirements. Because of some misjudgment of major
decisions in business, they miss the profitability mark and end up losing money. As a result,
they cannot keep their promises to creditors & customers, leading to the termination of the
companies. These offences are less common in terms of both number and volume.

The concept intricate and the difference between them can be semantic. Some pre-mediates a
crime by considering it before committing it, while some do with excitement or anger. No-
fault liability is the absence of mens rea on purpose. Thus, it's important to dig deeper into the
mental aspects that go into perpetrating deception that leave the entire nation gaping.

White-Collar Crime: Reason for Growth

The nature of modern society — humanity advances, the entire facet of the society gets
better, conflicting to the eternal greed of the person, opportunity, or rationalization. Modern
crime is the reason for the growth for modern innovations and the rise in the administration
forces. Although, the aforementioned aspects are the primary causes of the increase to a
brutal pyramid (known as the Fraud Triangle), a toxic cocktail of Pressure, Access to
Information, and Rationalization that has always been a hotbed for white-collar crime.

Let us see how-

Pressure: Businesses are under tremendous pressure to achieve (or at least appear to
achieve!) their monetary aims because of the monetary decline. Most businesses are falling
short of their financial targets, putting them under a great deal of stress. The compensation
incentive structures exacerbate this in place. Since the main panacea for the market
competition referred to as "survival of the fittest". So it is necessary to fight for survival.
There will always be competition among people, and only the best will survive if they can
adapt to the circumstances. White-collar crimes are frequently the result of the same
motivation. Deception of transactions, accounting fraud activities, other monetary
shenanigans are common in unknown situations of pressure like this.

Access to Information: Key information on people's cell phones and computers, such as
bank account numbers, securities, credentials, and so on, might induce criminal minds to use
the information for their gain. Large corporations such as banks, casinos, and financial
institutions, where enormous sums of money barter regularly, may be the target of such
white-collar offence.

Rationalization: People struggle to explain and recognize these crimes since their nature
differs from that of ordinary crimes. This leads to criminals committing crimes and then
convincing themselves that their acts were not criminal. Because of stockholders, insider
trading is unethical.
It is a victimless crime since no one knows who is being defrauded. Extorting clients makes
sales agents feel like they're doing their job since they're putting the transaction together
hurting no one.
It is an important element to understand in white-collar crime, rationalization is a
misrepresentation of facts to make things look better than they are.
To show, most white-collar criminals believe things like, "It's just a change of numbers on a
spreadsheet; we're not hurting anyone!" or "We're doing this to save jobs, and we'll push the
money back in once conditions improve."
A desire to remain in "denial" despite overwhelming evidence to the contrary exacerbated
this toxic mixture of rationalization and brief thinking.

Thus, this behaviour has resulted in an intermixing of simple deviations from societal norms,
breaches of civil law, and criminal violations, blurring the line between civil and criminal
law.

White-Collar Crime: Types

Bank fraud: Fraud is a crime committed intending to deceive others and attaining undue
gains Bank frauds are a type of investment con that are often used in WCC and corporate
crime. It's made through deception by legitimate deals to the banks. It also entails dealing
with negotiable securities such as personal checks, money orders, bonds, and promissory
note. Because banks and governments have a relationship of trust — candour and
forthrightness — bank fraud affects the entire society. There are various bank frauds which
are being practised such as fraudster changes the name of the payee on the check/draft and
withdraws money, forging signatures is used to operate a dormant account fraudulently, the
agent misappropriates the Mini Deposit Account collections which are not deposited with the
bank.
In India, bank fraud is criminal under the Indian Penal Code, 1860. Under the provisions,
Section 403 of IPC state misappropriation of property, Section 405 of IPC state criminal
breach of trust, Section 415 of IPC state cheating, Section 463 of IPC state forgery, and
Section 489-A of IPC state currency counterfeiting.
According to RBI, data showed there has been an extraordinary increase in the number of
bank fraud cases. Rs 4.92 trillion as of March 31, 2021, represent nearly 4.4% of the total
bank credit.

Blackmailing: It is the threat of bodily harm or the disclosure of a person's secrets for
money. Section 503 of Indian Penal Code, 1860 defines Blackmailing.
Acting in such a manner that may wrongfully accuse the other party of the crime Illustration-
Z, a top member, requests his assistant to marry her daughter, otherwise, he would defame
her of embezzlement of 25 Lakhs from the firm, for which Z has committed the crime. As a
white-collar crime, this is blackmail.

Bribery: When an individual gives or solicits, or receives any item of value which may act
mala fide in concealing the actions of a person performing the public or legal obligation.
Bribery is the prevalent white-collar crime acted in India. In India, bribery is punishable
under Section 171-E of the Indian Penal Code, 1860 with Section 13 of the Prevention of
Corruption Act, 1988.
In Narada Bribery Case, Mathew Samuel, who led the Narada sting operation, targeted high-
ranking officials of the All India Trinamool Congress (AITC). It revealed many politicians
and a top officer getting money bribes to give a corporation off-the-record benefits.

Counterfeiting: Under the Indian Penal Code, 1860 Section 28 deals with counterfeiting. It
is a criminal act where original work replicates to extract, destroy, or substitute someone
else's original output. It makes it intuitive to benefit from unlawful activities and to deceive
someone who feels the presentation is bona fide and the duplicated work is more valuable.
In India, the number of counterfeit coins has increased significantly. On July 4, 2019, the
Special Task Force of Kolkata apprehended three persons after discovering fictitious Indian
rupees with a face value of Rs. 6,50,000 with them. As per Times of India, two persons
reportedly seized in Rajkot carrying 1,080 counterfeit cash currencies with a face value of Rs
21.60lakh.

Cybercrime: As the usage of computers and the internet is rising, so does the criminality
associated with them. The crimes of ‘computer networks’ refer to cybercrime. Done against
the victim, either explicitly or implicitly, to harm his physically or psychologically reputation
via the use of the internet and other social media platforms. Cybercrime is a danger to a
country's security and a person's financial well-being. Disclosure of personal data can lead to
issues with privacy. There have been crimes that are prevalent in India such as – child
pornography, cyber terrorism, cyberstalking.
The Information Technology Act of 2000 is India's only legislation dealing with cybercrime
Embezzlement: When an individual who gives money or property to utilise for his or her
profit utilises it for purposes other than those done unlawfully. An example of Embezzlement
is dishonest misappropriation, as stated in section 405 of the Indian Penal Code of 1860.
Where the company often offers a vehicle service to its senior staff for official business.
However, these automobiles services are being utilised for reasons other than official tasks,
which is embezzlement.

Money Laundering: It is a crime in which offenders attempt to conceal the source of funds.
Since these funds get unlawful, offenders try to conceal the actual owner and provenance of
the funds. Laundering is the practice of passing off unlawful funds as lawful funds. Section 3
of the 2002 Money Laundering Act specifies what makes up money laundering.
They work in such a way that even investigators are cannot locate the money's true origins.
And that is how offenders who spend their illegal money in the shadow market can convert it
into lawful assets.
Offenders misuse bank services to deposit hidden money and transfer it from another
commercial bank to the other to cover the funds and hide its source, after which spend to get
it in aligning money laundering into the banking system.
In Anosh Ekka v. Central Bureau of Investigation, Ekka accused of money laundering
allegedly got a vast percentage of movable and immovable goods in his name with that of his
family within three years after becoming the minister. They found defendants guilty of
plundering and laundering many public funds by the Supreme Court. He postponed the
verdict and tampered with the evidence against him. It held him liable for misusing the legal
system and attempting to defraud the court decorum.

Tax evasion: The deliberate omission to pay taxes due called tax evasion or tax fraud. The
phrase refers to someone who earns a living but does not register it or hides it by forging a
tax return or audit report. True, no one likes to pay more tax than they should, thus
individuals frequently look for methods to decrease their tax obligations to the authority.
Tax fraud is a prevalent activity associated with the illegal market. Tax evasion is a criminal
activity under Chapter XXII of the Income-Tax Act of 1961, which can cause a massive
penalty or perhaps imprisonment.
There are situations where one can be liable if fails out to register income tax returns, or by
registering false information or statement on the form or by not paying for self-assessment
tax.
The assessing officer had imposed a penalty on the appellant in Galaxy Nirmaan Pvt. Ltd. v.
Acit, New Delhi for non-payment of the self-assessment tax in the year 2010-11. Section
140A(3) of the Income Tax Act of 1961 imposed a penalty of 1,09,71,691 rupees.

Insider Trading: A process in which employees of a corporation get access to far more quasi
information that might be important in making financial preferences. Insider trading is a
deceptive behaviour in which other parties suffer significant losses because of the lack of
useful quasi details.

Hawala Trading: It is a method of transferring funds without physically moving the funds.
Hawala is a substitute payment mechanism that operates beyond traditional financial
institutions. It is an indirect way of transmitting payments that began in South Asia in the 8th
century. Notably, in the Islamic community, it is being practiced. Hawala does financial
transaction through a system of hawala merchants.
Ponzi scheme: A deceptive financial plan that offers investors enormous returns with
minimal risk. The Ponzi scheme makes rewards early investors by attracting new investors.
This is like a pyramid scam where they depend on cash from new investors to reimburse for
the previous funders.
Ponzi scheme is all about getting new clients to engage in their plans. Their plans make sure
that elderly participants make profits from a consistent supply of fresh money. Whenever the
supply is lacking, the strategy goes down. Hence, it is a fraudulent investing scam.

White-Collar Crime: Effected Arenas

Effect on the Legal profession: With the market age, white-collar crimes became a concern
to be confronted with. Legal challenges on property ownership and other legal concerns
arose, paving the conditions for the emergence of a new generation of an advocate who, in
the guise of serving awareness, began prosecuting wrongdoing and pursuing their respective
limited interests. In exchange for cash or other benefits from their clients, lawyers frequently
offer fraudulent facts and fraudulent testimony in the trial. For a fee, professional experts
with official help engage in unethical actions and break all of their moral guidelines.
Manipulation of facts and fabricating testimony by putting incompetent witness testimony
brings the matter a new twist that results in a different outcome.
In Jacob Methew v State of Punjab state that in Law any Specialists from many occupations,
such as legal, pharmaceutical, or architectural, or other, maybe made responsible for
incompetence in practising their speciality provided that any of the following two
requirements fulfil:
a) He lacked the talent to be proclaimed.
b) If he had, he did not use it.

Effect on Medical Profession: The dilemma of the doctor-patient relationship recognised by

criminologists endlessly. Anyone who engages in deceptive tactics, such as when a physician
issuing a false certification or patients are being sold trial drugs and medications, and in
certain cases, contaminated drugs and medications, will face serious penalties. The removal
of an unborn foetus is a horrible offence, and it sentences the culprit to death. There have
been several instances where medical practitioners are practising the profession without a
proper permit. A case where the specialist who was examining the person found out to be an
impostor who just misleads the people by failing to cure patients adequately and fleeing with
their funds.
The issue is also that they frequently avoid prosecution because individuals have not broken
the rule of the law, but by breaking the constitution, they conduct offences that are antisocial
and cause significant harm to community safety.
Two physicians in Karnataka, K.H. Jnanendrappa and K.M. Channakeshava accused of
falsifying health certificates for Abdul Karim Telgi, who was part of a scheme, to facilitate
him to seek release based on health difficulties. As a result, they charged each of them with
imprisonment and a fine under the Prevention of Corruption Act, 1988.

Effect on Education Profession: Educational firms play a nastier role because they're less
concerned with educating students and instead focus on generating money at the expense of
the child's education. In these facilities, rackets exist to get learners to take part in exams on
the grounds of altered validity documents, lowering the grade of the learning system of the
country. In 2019, the New India Express alleged that the Central Crime Branch has detained a
high-ranking railway ticket inspection staff member for disclosing examination papers sheets
for the post of officers for cash.
Effect on Engineering Students: Engineers' roles in white-collar crimes, we frequently see
examples of financial shenanigans with bidders, the approval of mediocre work, and the
administration of fraudulent employment records. They generate more revenue from the
builders for their low-quality work than for genuine work. Usually, some engineers deal with
malpractices that result in significant financial losses for the organisation. In Neeraj Desai
case, where he was liable for negligence as it led a bridge to collapse resulted in the death of
six people and injury to few people.

Effect on Corporate: White-collar crimes have tremendous adverse implications for a

business. Casualties caused by the organisation because of one delinquent worker acting with
or without the knowledge of an external observer can have a significant and incremental
influence on the organization's business revenue growth. When the data becomes viral, it has
the potential to defame the corporation in the long run, which is difficult to find out to end it.

Effect on Society: White-collar crime has a significant economic impact on society. When a
business closes or is an under inquiry for a criminal act, it results in employment casualties at
all tiers, a decline in asset values deteriorating investors' investment, and a crisis of positivity
in the economic institutions. There are many examples from all major businesses that have
resulted in the above.

White-Collar Crime: Regulatory Legislations in India

The government has enacted several provisions to combat white-collar crime. Various
legislations include penalties for these offences:-

 Anti-corruption Laws (Amendment) Act, 1967

 Central Vigilance Commission Act, 2003
 Companies Act, 1960
 Essential Commodities Act, 1955
 Foreign Exchange Management Act, 1991
 Foreign Corrupt Practice Act, Foreign exchange regulation, forward contracts
(regulation act, 1952)
 Indian Penal Code, 1860
 Income Tax Act, 1961
 Information Technology Act, 2005
 Imports and Exports (control) Act, 1950
 Narcotic Drugs & Psychotropic Substance Act, 1985
 Negotiable Instrument Act, 1881
 Special Court (Trial of offences relation to Transactions in Securities) Act, 1992
 Prevention of Corruption Act, 1988
 Prevention of Money-laundering Act, 2002

Bank fraud, insurance fraud, credit card fraud, and other offences are all defined by the
Indian Penal Code. In the instance of money laundering, the Indian government has taken
some initiatives to combat the problem. The Reserve Bank of India has introduced KYC
(Know Your Customer) norms that institutions must carefully obey. Financial institutions
must keep transaction data for a minimum of 10 years.
The Information Technology Act of 2000 act out to grant formal protection to the validation
of operations done in business activities to combat cybercrime. Punishments have been
prescribed under Section 43 & 44 of Information Technology Act.

However the Information Technology Act does not specifically address cybercrime, it does
include provisions that concern white collar crimes. Cybercrime is dealt with in Chapter XI,
whereas fines and judicial review are dealt in Chapter IX.

White-Collar Crime: Conclusion

White-collar crime is a worldwide issue that is expanding at an alarming level. They cause
more damage to society than traditional crimes, for two reasons: first, the financial loss is
significant, and subsequently, the negative influence on social morality. White-collar crime
has transcended national borders and has reached a worldwide issue.
As our nation progresses to modernisation and the global community gains emerging
technologies, the crime rate is going up at a higher pace, the increase in white-collar crime
has been massive. Everywhere these offences perpetrate, from the engineering profession to
the legal profession.
White-collar crime relies on lousy organisations, awful administration, and mismanagement.
We must rectify this as soon as possible before the economy collapses to halt the growth of
white-collar crime. The dangers and harm that WCC poses to Individuals' well-being cannot
overstate.
It must be obvious that eliminating white-collar crime is no effortless task, given that it has
functioned for years. We should engage with the authorities and judicial authorities to abolish
these offences. Effective measures and special tribunals have to come up with a plan and
implement in such a way that perpetrators are afraid of retaliation and start thinking before
breaking the law. In reality, law enforcement will conduct a deliberate endeavour to rid the
country of these perpetrators.
Apart from that, media plays a significant role in curbing the rise of white-collar crime. Most
of the white-collar crimes go undiscovered. Therefore, if the press increasingly gets involves
in publicising frauds and hoaxes, as well as disclosing how individuals in prestigious
positions of authority in a firm abuse their influence unjustly. We should take initiatives to
educate individuals about white-collar crimes and how to avert malpractices. This will
undoubtedly minimise the percentage of crimes.
As a result, the motto ought to be that “Shatter the Silence, Stop the Crime”. Because the
crimes include deceiving public confidence and trust, the public should step up to safeguard’s
entire nation from these cruel individuals who are gradually but steadily undermining the
culture's spirituality for the primary aim of accomplishing self-interest.

References

1. https://shodhganga.inflibnet.ac.in/bitstream/10603/43935/8/08_chapter%202.pdf
2. https://indiankanoon.org/doc/90919629/
3. Conference report on white-collar crimes‘, by Godwin Kunda
4. Jacob Mathew v.State of Punjab, (2005) 6 SCC 1 (para 18)
5. Anosh Ekka v. Central Bureau of Investigation
6. Arun Kumar Mishra v. Directorate of Enforcement