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Department Of Anti-corruption Govt.

Of Sindh

Corruption has become a problem of colossal scale, particularly for third world countries. As such it has aroused a lot of discussion and generated a lot of intellectual debate, leading to counter strategies to arrest the burgeoning trend. Some programmed have been implemented with salubrious effect, while others have been relegated to the filing cabinet for being found lacking in pragmatism.

When a poor country becomes a consumer society and conspicuous consumption at the higher levels of society becomes common, the rich want to become riches and their splurge their wealth. Pakistan is exposed to the good and costly things of the world all this while 40 percent of its people live below the poverty lie of a dollar a day and 40 per cent of it people live more earn less than two dollars a day. In such a society too many who want to live well rely on their illegal or tax-evaded earnings to be able to spend more. Or they rely on defaulted bank loans.

NAB has also decided to set up an implementation committee and has said that all the stakeholders, including the private sector, will be presented on it. That means the committee will be reviewing the progress of the NACS from time to time and make changes to plug and loop holes to make it success.

Under the strategy NAB will approve all federal and provincial government schemes costing Rs. 50 million and more. Does that mean it will have an elaborate structure to scrutinize such schemes and prevent their misuse? The NAB will not scrutinizing and approving all schemes but rather that it will conduct a random check to examine a few of them.

Although, we tolerate this behavior our history also tells us that here is threshold beyond which society becomes restive and demands corrective actions. This threshold has been breached on a several occasion in Pakistan and when that happens our leaders, under pressure from the people, promised a vigorous cleaning of the system.

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But cleaning usually means adopting a set of rules that applied to the group of people who were believed to be extraordinarily corrupted. It was this type of approach that led to the promulgation of such ordinance as the public and Representatives Officers Disqualification Act of 1949 (PRODA) or the elective bodies Disqualification Order of 1959 (EBDO).

Yahya Khan to fire a large number of civil servants the famous 303 for helping themselves to the fruits provided by rapid economic growth during the period of Ayub Khan. In a famous public address that came to be known as the 22 families speech Mahbubul Haq, Ayub khans chief economist, blamed his own government for allowing a handful of judicial and commercial houses to capture the benefit of plentiful growth in the 1960s. The public heard Haq and demanded action and the axe fell on more then 300 civil servants.

Shaheed Zulfiqar Ali Bhutto, Yahya Khans civilian successor, carried out his own bureaucratic bloodletting.

But Bhutto went further than just firing civil servants. The Constitution of 1973, of which he was the main author, removed the protection that was given to the civil servants by the two precious constitutions. The 1935 Government of India act (Pakistan Constitution until 1956) contained detailed provisions regarding the terms and condition of the civil servants.

The Constitution of 1956 borrowed extensively from the Government of India Act. It was very friendly to the civil servants. The expressly prohibited variation of tenure and condition of services to the employees disadvantages and provided the right of appeal against alteration or adverse interpretation of a rule affecting the condition of services. The constitution of 1962 was a bit less generous but continued to offer protection against a disadvantages alteration or interpretation of rules affecting terms and condition of services.

The Constitution of 1973 did away with these protections, exposing the civil servant to the protections available only with in organic law.

Shaheed Bhutto said that the decision of to remove constitutional protection that had been available to the civil service for a quarter century in independent of Pakistan was taken for good reasons. It was taken to allow merit to flourish withholding the civil servants to be fully accountable to the public at large. Neither objective was achieved. Instead, the civil servant

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became beholden to the politician, which was probably the main purpose behind the approach adopted by SHAHEED Zulfikar Ali Bhutto.

Starting in 1990, the system's wrath fell not on the civil servants as it did during the periods of Yahya Khan and Zulfiqar Ali Bhutto. Now politicians were singled out for punishment. In that year PM Benazir Bhutto on a number of charges that prominently include corruption. President Khan against Nawaz Sharif leveled the same charges in 1933 and by President Farooq Leghari against Benazir Bhutto in 1996.

The political leadership plays an important role in promoting change. To effectively shape that role, it is necessary to move beyond the subjective and qualitative analyses that describe corruption as a mere moral failing of politicians, bureaucrats and businessmen. It is more useful to consider it as a political and economic phenomenon, determining which types of corruption have the more corrosive effects on social and economic stability. For example, where imbalances in power occur between state and society, corruption is more likely to flourish. A vibrant and sustainable democracy requires a balance between state and society and between political and economic power. In the relationship of the former , officials are strong enough to act authoritatively, yet subject to all the rigors of accountability; in the latter , neither officials nor economic interests are so weak as to be exploited by the other.

As for the elimination of high level corruption during the military rule, we would know that reality only long after the end of process begins, and such sins of commission come before the auditor General, Public Accounts Committee, The Parliament and the Press.

As far as the Corruption Perception Index of the Transparency International of Berlins is concerned, with 10 as the base of for no corruption it has risen to only 2.6 from 2.2 but it is still ranked 77 out of table of 102 countries evaluated for corruption.

The IMF says Pakistan conducted 154 enquiries against politicians, including one against a former prime minister and former ministers, 290 bureaucrats, 38 against businessmen, and seven against officials of the armed forces. It said the National Accountability Bureau has received Rs. 80 billion so far.

The question in what next in Pakistan? The National Accountability Bureau has prepared a new

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National Anticorruption Strategy and it is to come under the prime misusing it against his ministers, and party supporters. But a high-powered anti corruption setup under the prime minister and the provincial chief ministers is some thing not new. In fact there has been duplicity of such bodies since the days of Mohammad Khan Junejo in 1985. After Parliament by a highpowered body and the report comes to the PM, the buck stops there. The same happens in the provinces. Sometimes if a minister or member of the assembly protests too much the enquiry is called off quick for political reasons. And the offender commits more irregularities.

So there is a need for such anti-corruption bodies to be truly autonomous with a fixed term of three or fie years appointed by the National Assembly. It is easy to suggest the judiciary should appoint such an official, but following the tradition of our judiciary he may take five years or more to give a verdict.

We are told 300 ordinances were passed during the three years of military rule. Will they all be re-examined by the parliament one after another before they are made regular laws or many of them will be simply ratified by parliament now?

If our Parliament system is so effective the 30 or so standing committees should look into the working of each Division and make them serve efficiently. And they should hold open sittings, which are accessible to the Press and the Public. If instead the members of Parliament are given Rs 10 million each as development fund each year and they focus on spending that amount they will not be serving the country in the manner expected.

They Key Public Accounts Committee should also hold its sittings openly and make them accessible to the Press in the manner suggested by H.U. Beg, who presided over the Ad Hoc PAC recently. Through as an official he was too committed to secrecy, he now realizes the benefits of open sitting of PAC and exposing the massive corruption in the government, and not shield its officials from exposure after they had committed serious wrongs.

Official reports like the annual reports of the Auditor-General of Pakistan should be available to the public on payment. And they should be available not only in Islamabad but also in Karachi and other centers so that the political debates in the country could be truly informed ones.

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Within the field of criminology, white-collar crime has been defined by Edwin Sutherland as "a crime committed by a person of respectability and high social status in the course of his occupation" (1949). Sutherland was a proponent of Symbolic Interactions, and believed that criminal behavior was learned from interpersonal interaction with others. White-collar crime therefore overlaps with corporate crime because the opportunity for fraud, bribery, insider trading, embezzlement, computer crime, and forgery is more available to white-collar employees. Generic phrase for any unlawful, nonviolent conduct committed by business and government professionals (white collar workers) involving fraud, theft or other violations of trust committed in the course of ones employment.

Examples: Examples of white collar crime include embezzlement, price-fixing, insider trading and stock manipulation, antitrust violations, tax evasion, commercial bribery, racketeering, false advertising, manipulation of business records for financial gain and other dishonest business schemes.


Today the definition of white collar crime may also refer to the socio-economic status of the person committing the crime. A person from the middle or upper classes commits a white collar crime simply because of his origin. However, if the crime is violent in nature, it still is likely not considered a white collar crime. Most believe that white collar crime is a less punishable offense, than for example a mugging where violence is threatened. However, white collar crimes like embezzlement, the stealing of company funds, may ultimately harm more people. If funds are irrecoverable, a white collar criminal might technically steal all the savings of people who depend upon those savings in order to live. When the money cannot be recovered, the white collar criminal has caused more damage by his actions than the mugger. However, the mugger is likely to receive a stiffer sentence. Since white collar crime tends to occur among those of higher socio-economic standing, an advantage is gained. Most people can afford a better lawyer to argue in their defense. Those of lower socio-economic standing are not likely to be able to afford a private lawyer and must rely on the overworked state defense attorneys. It has been statistically shown that most clients fare better with a private lawyer.
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Generally, a white collar criminal also has the advantage of being housed in a minimum-security prison. Such an environment offers greater freedom and is generally considered a safer environment than maximum-security prisons. Thus a white collar crime is not considered with the same gravity as other offenses, even when a person has damaged beyond repair the lives of others.

Historical background The term white-collar crime only dates back to 1939. Professor Edwin Sutherland was the first to coin the term, and hypothesize white-collar criminals attributed different characteristics and motives than typical street criminals. Mr. Sutherland originally presented his theory in an address to the American Sociological Society in attempt to study two fields, crime and high society, which had no previous empirical correlation. He defined his idea as "crime committed by a person of respectability and high social status in the course of his occupation." Many denote the invention of Sutherland's idiom to the explosion of U.S business in the years following the Great Depression. Sutherland noted that in his time, "less than two percent of the persons committed to prisons in a year belong to the upper-class." His goal was to prove a relation between money, social status, and likelihood of going to jail for a white-collar crime, compared to more visible, typical crimes. Although the percentage is a bit higher today, numbers still show a large majority of those in jail are poor, "blue-collar" criminals, despite efforts to crack down on corporate crime. Other fiscal laws were passed in the years prior to Sutherland's studies including antitrust laws in the 1920's, and social welfare laws in the 1930's. After the Depression, people went to great lengths to rebuild their financial security, and it is theorized this led many hard workers who felt they were underpaid to take advantage of their positions. Despite the great lengths Sutherland went to describe exactly what he categorized as white-collar crime, the clarity of the subject was, and is still rather broad and ambiguous. Much of Sutherland's work was to separate and define the differences in blue collar street crimes such as murder, arson, burglary, theft, assault, rape and vandalism, which are often blamed on psychological, associational, and structural factors. Instead, white-collar criminals are opportunists, who over time learn they can take advantage of their circumstances to accumulate financial gain. They are educated, intelligent, affluent, confident individuals, who were qualified enough to get a job which allows them the unmonitored access to often large sums of money. Many also use their intelligence to con their victims into believing and trusting in their credentials. Many do not start out as criminals, and in many cases never see themselves as such.[1] SITUATIONS: Since the 1990s, tremendous growth of and involvement in the securities and commodities markets at the institutional, corporate, and private investor levels have led to great numbers of

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individuals involved in intentional corporate fraud and misconduct, particularly senior corporate executives. For example, the FBI is currently investigating over 189 major corporate frauds, 18 of which have losses over $1 billion. The erosion of public confidence in the management of public companies will, if left unchecked, have a negative impact on the stock markets and capital raising, which will in turn have a negative impact throughout the U.S. economy. Health care fraud continues to plague the United States, with losses exceeding $50 billion annually. Frauds involving durable medical equipment, staged auto accidents, and medical transportation services are examples of this pervasive crime problem. In addition to Medicare/ Medicaid and private insurers, state providers lose billions of dollars per year to blatant fraud schemes in every sector of the health care industry. As health care spending increases over the coming years with the aging of the baby boom generation and Medicare prescription drug coverage, health care fraud is expected to have a corresponding increase. Financial institution fraud (FIF) continues to be a significant white collar crime problem throughout the country. Since 9/11, the FBI has refocused its FIF program and is now investigating higher-priority cases to a much greater degree. Large-scale mortgage fraud and identity theft operations, many perpetrated by organized criminal enterprises, also continue to plague the United States. Aggressive use of anti-money laundering statutes and forfeiture of ill-gotten assets are integral parts of nearly every financial crime prosecution. Many top executives involved in corporate scandals have been charged with money laundering in addition to other criminal violations. Additionally, corrupt money launderers introduce illegal proceeds into the financial community, and this asset flow must be reduced through aggressive prosecution, seizure, and forfeiture. The ability of the U.S. Government and industry to function effectively is likewise threatened by complex frauds. The amount of taxpayer funds involved in the government procurement process is staggering, as billions of dollars are spent each year on everything from highways to rockets. The GAO estimates that as much as 10 percent of appropriated funds for domestic programs may be lost to fraud in the government procurement and contracting process, and this type of crime is critically linked to public corruption imperatives. Insurance, telemarketing, and investment frauds often operate across jurisdictional and international boundaries. When losses to individual victims are aggregated, the economic impact can be dramatic. Additionally, anti-trust offenses and bankruptcy fraud have a significant negative affect on the U.S. economy, and environmental crimes represent a serious threat to the public health and natural resources of our nation. The FBI will continue its successful efforts in the white collar crime arena by using its expertise, broad criminal investigative resources, and strong relationships with regulatory agencies to maintain public confidence in the countrys financial institutions and markets, ensure the integrity of government expenditures of taxpayer funds, and protect individuals and businesses from catastrophic economic loss.


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EXPLANATION: The anti social activities of persons of the upper starts in their occupation, which have come to be known as white collar crimes, have been given there due to important in the recent past only after the pioneering work done by Prof. Edwin H. Sutherland in this area of great contemporary concern. It should not however be concluded contemporary concern. It should not however concluded that there was no such problem or its awareness be concluded that there was no such problem or its awareness before Sutherland focused his attention on this variety of crime about 35 years ago as observe by Barnes and Tatters: There has always been crime among businessman. There have always been incenses of violation of trust. Most of us have read of chicanery and Plunder in the history books and such acts have after constituted the central theme of the fiction of earliest time. But the American people seems to believe that anyone who betrayed a trust or who mulcted the wisdom might in a shady but legal dead, would eventually suffer if not here surely in the hereafter. Existing practices however were generally accepted as being within the canons of wood business. Business, therefore, was justified in pulling a shrewd deal. The victim either did not report what was done for fear of being ridiculed, or received little sympathy because he had been fleeced in a social, approved and even legal deal Caveat emptor Lat the buyer beware expressed the prevalent attitude. Prof. Sutherland was preceded by others who were aware of the damage to society from the upper socio-economic groups who exploited the accepted economic system to the determinant of the masses. Prof. Albert Mossis calls attention to a paper entitled criminal Capitalists read by Edwin C.Hill before the International congress on the prevention and Repression of Crime at London in 1872. In this paper the writer noted the Growing significance of:

NATURE & DEFINATION OF WHITE COLLAR CRIME Prof. Sutherland presented his concept of White Collar Crime in his address to the American sociological society in 1939. Sutherland defined White Collar Crime as Crime committed by a person of respect ability and high social status in the course his occupation Letter he seems to have added a refinement to the definition by defining a White Collar Crime as a A person of a upper socio economic class who violates the criminal laws in the course of his occupational or professional activities. He pointed out that White Collar Crime was more dangerous to society then ordinary crime firstly because the financial losses were higher. Secondly because of the damage in flitted on public moral. Comparing the financial losses resulting due to White Collar Crime with ordinary crime, he observe the financial loss to society from White Collar Crime is probably greater than the financial loss from burglary robberies and larcenies committed by corporation investment trust and public utility holding companies, report of fifty millions dollars losses from such criminal behavior are by no means un common.
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Regarding the social damage to morale and institution Sutherland expresses the view that the financial loss is more important than the damage to social relation since it create distrust lower moral and produces disorganization on a large scale. On the other hand the social damage from ordinary crime is said to have relatively little effect on our institution and laws are brought into contempt & disrepute is illustrated by Marshal B Clinard. He points out that wartime black market crime set an example of disobedience of laws by presumable repute able businessman for more flagrant than in the case of most robberies burglaries and larcenies. TYPES OF WHITE COLLAR CRIME The main crime that have attracted attention in the USA under the head of White Collar Crimes may be summarized as follows,
a) Fraud in business is relation to sale of bonds & investment. b) Adulteration of foods & drugs & misleading advertisements. c) Mal practice in the medical profession such as illegal sale of alcohol and narcotics, illegal

services to underworld criminals fraudulent reports and testimony in accident cases, extreme cases of unnecessary treatment, fake specialist, restriction of competition & fee splitting.
d) Crimes by lawyers, such as guiding the criminal or quasi criminal activity of corporation

twisting of test agony to give a false picture, take claims (bogus liability in accidents etc.)
e) Trust, Cartels combines and syndicates etc formed to combat completion or to raise

prices or otherwise to interfere with the freedom of trade to the detriment of honest businessmen or the consuming public. This has now become a branch of law by itself and is usually dealt with under the topic of Antitrust legislation. f) Bribery & Graft by public officer. Since Sutherland limits the concepts to unlawful behavior engaged in for the purpose of furthering the financial or strategic interest of legitimate calling crimes by respectable people committed for other purposes are not white caller crime. Murder of his spouse by a businessman or bribery of a traffic offer by a motorist who happens to be physicians are not encompassed by the concept. GROWTH OF WHITE CRIMINALITY The rise of white caller criminality in many countries has coincided with the progress made in those countries in the economic and industrial fields. It is hardly surprising that the two processes should go together considering that most of the white-collar crimes are, directly or indirectly, connected with the production and distribution of wealth.

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Writing about the various factors which have contributed substantially to white-collar criminality Friedman makes the following observation: The Industrial Revolution had initiated great social changes of far-reaching consequences. The changes in the economic and social structure of property, comprising the transformation of an increasing proportion of wealth from property intangible, visible and mainly immovable good into conversation of foreign exchange and prevention of smuggling act 1949, essential commodities act 1955, foreign exchange regulation act 1947; Income Tax act of 1922 and 1961; prevention of corruption act, prevention of food adulteration act 1954; customs act, 1962 and trade and merchandise invisible powers and tights such as shares trademarks patents and copyright, coincided with the growth of large-sized corporation replacing individual entrepreneurs. This development, Inter alia, led to concentration of economic and consequent political power in a few hand absentee ownership and impersonal monopoly, emphasis on money and credit and decline in the sense of social responsibility on the part of owners of large property The law commission has also noted the various factors responsible for the growth of white-collar criminality in the following words. The advance of technological and scientific development is contributing to the emergences of mass society, with a large rank and file and small controlling elite, encouraging the growth of monopolies, the rise of a managerial class and intricate institutional mechanisms. Strict adherence to a high standard of ethical behavior is necessary for the event and honest functioning of the new social, political and economic processes. The inability of all sections of society to appreciate in full this need results in the emergence and growth of white collar and economic crimes. The two world wars also contributed towards white-collar criminality in a substantial way, the traditional mores and ethical restraints were vitally affected due to the scarcity of things and mounting demands. The end of the Second World War almost coincided with the independence of India and the emergence of an avowedly welfare state in the country. In a welfare state, the government tends to control a vast number of means of production and distribution of goods and maternal services. Assuming that such control are in the interests of the community the fact remains that the governmental control provide a fertile source of white collar criminality in a society inefficiency in the administration of state activities. The obligation imposed on the state regarding the ownership and distribution of national wealth and resources shall be evident from the following provision of the Indian constitution: The state shall in particular direct its policy towards securing that the ownership and control of the material resources of the community are so distributed as best to sub serve the common good; that the operation of the economic system does not result in the concentration of wealth and means of production to the common detriment.

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The above philosophy led to the various regulatory legislations. The breach of those regulations giving tremendous fillip to white-collar commonality in India During the last thirty years, the country has seen the execution of various five year plans involving huge expenditure by the government for various nation-building activities. The corrupt officers, businessman and contractors never had it so good no doubt the country did make some progress but a big chunk of money earmarked for developmental projects has been pocketed by the white-collar criminals. ANTI-WHITE-COLLAR CRIMES LEGISLATION-PROBLEM OF ENFORCEMENT It has already been noted that white-collar criminals are much more dangerous to society than ordinary or blue-collar criminals. The question then arises as to why many white-collar criminal go unpunished? According to Sutherland, the preferential treatment of white-collar offenders could be explained in terms of their high socio-economic status, the remedial philosophy of the laws in question and the relatively unorganized resentment of the public against white-collar crimes. The reasons for the absence of such resentment were stated to be as follows:
(a) The violation of law in such cases is complex, and can be appreciated only by experts.

(b) The public agencies of communication (like the press) do not express the organized moral sentiments of the community, partly because the crimes are complicated and cannot be easily presented as new, but probably in a great degree because these agencies of communication are themselves controlled by businessman involved in the violations of many of these laws. (c) The laws for the regulation of business belong to a relatively new and specialized part of the staves. As to the reasons why such crimes went unpunished, Sutherland made the following observation: The difference in the implementation of the criminal law is due principally to the difference in the social position of the two types of offenders. Because of their social status, implementation of the criminal law in relation to white-collar criminals becomes difficult. They are more powerful than the traditional criminals, consumers, investors and stockholders are unorganized, lack technical knowledge and cannot protect themselves. White-collar crime goes undetected because it transcends the visibility of ordinary cheating practices of small march assts. Another obstruction in the prosecution and punishment of white-collar criminals is that the public is not only indifferent and apathetic toward such violation of law but quite often the members of the community themselves contribute to the commission of the various White-collar crimes. In other words, the victims of the crimes are also to blame for white-collar criminality. In fact many such crimes cannot be committed unless there is a demand for illegal gratifications to public servants are some of the common examples.

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Finally one more factor is believed to be responsible for the failure to punish or for inadequate punishments so far as white collar crimes are concerned. The judges of the courts ordinarily belong to ripper strata of society and this factor may determine their attitude, consciously or otherwise, towards the white-collar offenders who also come from the same social strata. White-collar crimes being different in their nature and execution from ordinary crime present peculiar problems in term of detection investigation, prosecution and trial relating to such offences. It is evident that for an effective enforcement of the laws, specially trained personnel are needed to detect and investigate such crimes. It is because of the different kind of challenge that the trend now is to separate the investigating and prosecution and trial relating to such offences. It is evident that for an trial relating to such offences. It is evident that for an effective enforcement of the laws, specially trained personnel are needed to detect and investigate such crimes. It is because of the different kind of challenge that the trend now is to separate the investigating and prosecuting agencies for such crimes; a deviating from the traditional practice of vesting the two function in the same agency. This may however, give the desired advantages only if there is proper coordination between the two agencies. The next problem relates to the forum of trial and the substantive and procedural aspect of the law governing it. The issue regarding the forum has generated some controversy. It has been argued that to secure greater efficiency and effectiveness socio-economic crimes must be handled by tribunals or quasi judicial bodies which may not be handled by tribunals or quasi judicial bodies which may not be fetlered by some of the unnecessary, archaic and disabling features of the ordinary criminals law. Apprehensions have been expressed on the other hand that such forums may not be immerse from the influence of the executive branch of government and they, therefore, may not command the confidence of the general public. One possible approach is to retain the jurisdiction of the ordinary criminal courts but to do away with some of the overindulgent provisions of criminal law in the context of white-collar crimes. As a result of the recommendations of the Santhanam Committee some of the recommendations of the Santhanam committee some of the relevant laws were amended on these lines. By this amendment greater powers have been conferred on the investigating officers and on the magistracy and summary trials are also possible for some of the offences. The law has also been made slightly less benevolent to the accused persons by incorporating certain presumptions against them under certain circumstances. Under section 4 of the prevention of corruption act there is a presumption against then under certain circumstances under Section 4 of the prevention of corruption act there is presumption, for instance, that money received other than legal remuneration by a public servant is an illegal gratification. JUDICIAL ATTITUDE RECENT CHANGE As discussed above, courts generally have been giving differential treatment to white-collar criminals. Sometimes instead of punishing the guilty the courts have used cease and desist order in case of white collar criminals a technique which is not resorted to for ordinary criminals. As pertinently observed by the Taft and England, we do not warn the burglar to desist; we arrest him
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forth with. Therefore, however, seems to have occurred stiffening of the judicial attitude in the U.S.A of late as manifested in the famous case of the electrical equipment companies decided in the year 1961. In the world of Taft and England: The plea of nolo contender (no contest) by a person formally accused of a crime is a back handed plea of guilty. For decades, businessman accused of violating anti-trust laws have pleaded nolo contender when the evidence against them was clearly over whelming. Never, until 1959, did imprisonment follow such a plea. In that year, to their astonishment four Ohio businessman were sentenced to jail for antitrust violations. In February, 1961,44 executives of 29 electrical equipment companies, including general electrical equipment companies, including general electric and wasting house, pleaded guilty or nolo contender to charges of price fixing and rigging bids on $7 billion worth of heavy electrical equipment. In addition to fines ranging up to $ 12,500, 23 executives, one of whom was a wasting house vice president were variously sentenced were actually served. The extensive press coverage given to this crime involved, but upon nationwide surprise at the jail sentences meted out and upon the verbal reprimands uttered by the sentencing judge. Taft and England also note the significance of the Time magazine reporting the story in the Business and not in the crime columns. The trial courts in India sine times fail to realize the gravity of white-collar criminality and, therefore, tend to be contended by awarding light or even taken punishments to white-collar criminal. Law commission has been fully aware of the judicial smugness vis-a-vis and the dangerous inherent in it. In its 47 report the commission observe: suggestion are often made that in order that the lower magistracy may release the seriousness of sum of the social and economics offences, some method should be evolved of making the judiciary conscious of the grave damage caused to the countys economy and health by such anti socio crime. We hope that the higher courts are fully alive to the harm and we have no doubt that on appropriate occasion such as judicial conferences, the subject will receive attention. It is of almost important that all state instrumentalities involved in the investigation, prosecution and trail of these offences must be oriented to the philosophy which treats these economic offences as a source of grave challenge to the material wealth of the nation. What has been observing regarding economic offences by the commission is equally opposite to white collar crime in general the case of M.H Hoskot V.state of Maharashtra illustrate the attitude of the lower judiciary toward the white collar criminals. Hoskot, a reader in Saurashtra University, was found guilty of an attempt to concoct the certificate of degrees of Karnataka University. The session court justify the token punishment on the basis of background of the offender, his not having criminals activities in future. On appeal by the state, the high court enhanced the period of imprisonment to three years. While a holding a sentence awarded by the high court, the Supreme Court term the sentence awarded by sentence court as incredibly indiscreet. Censuring the session court of the wrong sentences the Supreme Court observes.

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It is surprising that the public prosecutor has consented, on behalf of the state, to this unsocial softness to an anti social offender on conviction for grave charges. Does the administration sternly view white collar offenders, or abet them by agreeing to award of token punishment making elaborate trials mere tremendous trifles? Social defense is the criminological foundation of punishment. That court which ignores the graves injury to society implicit in economic crimes by the upper berth, mafia ill serves social justice. Soft sentencing justice is grows in justice where many innocent are the potential victims. While iatrogenic prison terms are bad because they datum anise, it is functional failure and judicial pathology to hold out a bringing self defeating non sentence to deviants. An imprisonment up to 7 years is permeable under section 468 of the penal court who in danger the morale, the health and wealth of society. EXPLANATION OF WHITE COLLAR CRIMINILITY The various theory develop to explain tradition crime apparently explain the criminal tendencies of the upper state since those theories are relevant by and large in content of criminals of the lower state. Sutherland wrote in crime of corporation as follows: It is very clear that the criminal behavior of businessman cannot be explained by poverty, in the usual sense or by bad housing or lack of re creational facility of feebleminded. Following emotional instability, business leaders are capable, emotionally balanced, and in no sense pathological. The only plausible theory may be the explanation offered by Bonger which to a great extends fits in with the case of white collar offenders. In a capitalistic society acquisition of maximum material resources by individual is regarded not only legitimate but also essential. The only measuring rod of success in the quantum of money one is able to mass in the name of open competition, economy and individual freedom. The inevitable result is the large scale exploitation of the public by businessman and professionals in the course of their occupational activities. Since the motivating force to commit white collar crime is provided by the overall system itself, various legislation and regulation to curve white collar criminality are bound to be in effective to great extent. DIFFERENTIAL ASSOCIATION Sutherland sought to give an explanation of white-collar crime in the basis of his differential association theory but cautiously concluded that white-collar crime has not yet been fully explained. According to him, same, white collar offences represent normal business procedure which are passed on as a part of the occupational sub-culture. Such procedures are rationalized by a business activity not only learn all the unethical practices but is also some time need to you such practice by his superior in the establishment the rapid pace of social change and the technical complicity of business affairs have aggravated social disorganization favorable to unethical business practices

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Clinard While agreeing with the differential association approach of Sutherland is of the view that all cases cannot be explained by the theory. Many businessmen do not commit such offences despite their knowledge of the techniques employed in these crimes. WHITE-COLLAR CRIMES IN PAKISTAN In the foregoing discussion, the various aspects of white collar crimes, viz., its definition, nature, extent causative and contributive factors and the difficulties in the enforcement of laws in the area were discussed, what flows now is a brief discussion relating to some of the more important white-collar crime in India. BUSINESS, TRADE, COMMERCE AND INDUSTRY Sutherland emphasized the degree of criminality among businessman n the contemporary society and their community from criminal sanctions generally in the following words: The most powerful group in medieval society secured relative immunity from punishment by benefit of clerg and now the present most powerful group secures relative immunity by benefit of business. What Sutherland wrote about the American society is equally true if the conditions in India. The santhanam Committee gave a graphic account if the misdeeds if businessmen and industrialists in the following words: Corruption can exist only if there is some one willing to corrupt and capable of corrupting. We regret to say that both this willingness and capacity to corrupt is found in a large measure in the industrial and commercial class.

To these, corruption s not only an easy method to secure large unearned profits, But also the necessary means to enable them to be in a position to pursue their vocation or retain their position among their own competitors. It is these persons who indulge in evasion and accordance of taxes,accumulate large amount of unaccounted money by various methods such as obtaining licenses and avoidance of taxes, accumulate large amounts of unaccounted money by various methods such as obtaining license in the name of bogus firms and individuals trafficking in license suppressing profit by manipulation of accounts to avoid taxes, and under-valuation f transactions in immonable property. It is they who have control over large funds and are in a position to spend considerable sums of money in entertainment. It is they who maintain an army of liaison and contract men, some of whome line, spend and entertain obstentatiously. We are unable to believe that so much money is being spent only for the purposeof getting thing done quickly. Contractors and suppliers who have perfected the art of getting business by undercutting of making good the loss by passing off sub standard morks and goods generally spare no pain or expenditure in creating a favourable atmosphere. Possession of large amunts of unaccounted money by various persons including those belonging to the industrial and commercial classes n a

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mojor impediment in the purification of public life. If anti-corruption activities are to be successful if must be recognized of corruption as to eliminate corruption in the public services. In fact they go together. Commenting on the extremely dishonest behavior of Indian traders, it has rightly been observed: Business communities in India of large and small merchants are basically a dishonest bunch of crooks white it is true that the object of businessman is to make profit , there are degrees of making profit, there are degrees of making profit, and no where in the world do businessmen get rich so quick as they do in India. Two instances of big-business criminality are provided by reports made by the commissions dealing with the notorious dalmia jain and mundhra cases. The vivan base commission which enquired into the affairs of the dalmia jain group of compulsives, the third biggest in the country, held them responsible in different degrees for fraud, mismanagement, manipulation of accounts, destruction of records, personal gain at the expense of investing public, avoidance of taxes and a number of other irregularities and volitions of trust. FOOD AND DRUG ADULTERATION : This is easily the most atrocious crime committed by businessmen since it can cause irreparable damage to the health or even lines of innocent citizens. In India, the problem is so wide spread that from 25 percent to 70 percent of most of the food stuff consumed in this country are adulterated or contaminated. The same is true of the production of spurious drugs in the country. According to the Pharmaceuticals enquiry Committee, Government of India, the spurious drugs trade flourishes in India to a colossal extent. This is due to the greed of the greed of the manufacturers, ignorance of the poor consumers who go in for cheap medicines from unauthorized dealers and shortage of genuine goods. Public opinion is so strong regarding adulteration Laws in the country that a comment, Signed by several citizen residing in West Bengal and submitted to the law commission, suggested that persons guilty of adulteration of medicines and food should be punished with death and life imprisonment respectively, their property should be confiscated and publicity be given of their misdeeds through mass media. The law commission, however, did not consider the suggestion since the issue was not in its contemplation. Prosecution under the prevention of food adulteration act fail quite frequently because of defective reports of the public analysts, or delay in the examination of samples or because the procedure prescribed by the act for taking sample is not followed. Pointing out the difficulties involved in prosecuting offenders under the act, the law commission observed. It should be noted that in contested cases, where the inspector of the department is pitted against a lawyers professionally skilled in the procedure of court work and perhaps also more familiar

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with the particular practice and foibles of the magistrates before whom the less forensically able inspectors do incur the displeasure of the court by lack of familiarity with some of the legal refinement or by the unnecessary laboring of point which are not in use. In extreme cases, this lack of legal expertise may even result in an unjustified acquittal, where for example, the inspector is temporarily thrown of his step by a clever, if rather specious, legal point or procedural manicure. The commission concluded by observing: the most significant features of the prosecution process is undoubtedly the difference between the departmental inspectors view of the case and that which, in the event, he is able to give you the magistrate. The inspector views of the case is obviously colored by his involvement in what may have been a lengthy series of visit and discussions with the accused and by his knowledge of the past history of the dealing with the accused over the previous five or six years. The magistrate, on the other hand, is only permitted to hear the details of the particular incident with which the proceedings are concerned, and in addition he must pay some attention at least to the mitigating circumstances which defense counsel will put before him. VIOLATIONS OF TAXATION LAWS Some of the more important and frequent tax violations which occur in India are in the areas of income tax, wealth tax, estate duty and sale tax, wealth estate duty and sale tax. The loss resulting due to the violation to the state ex cheques is tremendous. A part from the financial implications of the problem, there are other dimensions of the evil like corrupting influence of the tained money on governmental machinery and the consequent contempt, disrespect and cynicism towards law in general.

EXTENT OF THE PROBLEM Tax-Laws in India are generally too complex and cumbersome [7 Law Commission, Fortyseventh Report, Social Economic Offenses P.34] to be administered smoothly. Those who are determined to evade taxation never fail to detect the loopholes in the relevant statues and therefore, manage to manipulate their affairs accordingly. It is almost impossible to have even a rough estimate of the extent of tax evasion in the country. Tax authorities find themselves in an unenviable situation when trying to assess the incomes of businessmen, contractors, lawyers, doctors and persons connected with the film industry. Unlike many countries, professional people in India are rarely paid through cheques and this makes tax violations easier for them. Even if payment is made through cheques, the sum thus paid and the rest is paid what has come to be known as the black-money. As given in the Santhanam Committee report, an unofficial estimate of the Central Board Of Revenue is that about Rs. 45 Crores of tax is evaded, income being about Rs. 230 crores. Obviously the figures must have gone up much higher since then due to the unprecedented inflation faced by the Indian economy during the last few years.
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Probably the greatest menace caused by the failure to check tax-evasion is the phenomenon of black money which has serious repercussions on the economy of the country. It is common knowledge that at present two parallel economic as represented by black and white money are in existence int he country. In its inquiry Board Commission found 114 fictitious persons to whom shares worth Rs. 16 Lacs were fraudulently issued in order to bring the secret profits of the Dalmia-Jain group and it did have over Rs. 4 crores of secret and undisclosed assets down to the year 1947. The commission also estimated the gains made at the cost of the exchequer by just four companies of Dalmia-Jain group by evading taxes to the tune of Rs. 1,45,19,790. The methods employed for this purpose included compensation payment for termination of selling and managing agencies , under statement of sales, suppression of profits, fictitious losses in shares etc. The Wancho Committee, appointed by the Government Of India in 1970 to make recommendation to unearth black money and combat tax evasion, identified the following direct effects of black money economy in the country:1) There is loss of revenue to the state. This and the immobility of investable funds contribute to the death of resources for national development. 2) It results in inequitable taxation; the honest taxpayer suffer in the process. 3) Since the unaccounted money cannot be declared or invested through lawful channels, a good part of it is spent in lavish consumption and unproductive uses resulting in waste as well as in inflation. 4) The most disastrous aspect of the phenomenon of black money is that the general moral of the society as a whole is adversely affected.

TAX EVASION AND AVOIDANCE A distinction is maintained in law between the concepts known as tax evasion and tax avoidance. While for the purposes of sociological studies, there is hardly any real distinction between the two; in the eye of law, the former is a crime while the latter is regarded as perfectly legitimate. It has therefore been rightly said that real dangerous tax offender does not evade but avoids paying taxes, The courts in India have recognized the distinction between evasion and avoidance and the following observation of a judge of the Bombay High Court sum up the matter succinctly: " A citizen is perfectly entitled to exercise his ingenuity so as to arrange his affairs as may make it possible for him legally and lawfully not to pay tax, and if his ingenuity succeeds, however reluctant the court may be to acknowledge the cleverness of the assessor the court must give effect to the 68. Report of the Vivan Bose Commission, quoted in N.R. Menon: WHITE COLLAR CRIME IN INDIA 1968 Letter of the taxation law rather then strain that letter against the assessor."

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The Approach reflected in the judgement is in line with the basic principle of criminal law that no act can be declared a crime without an express law forbidding and punishing the particular tax statutes gives a long rope to those who have scant respect for taxation laws.

CORRUPTION IN GOVERNMENT AND POLITICS In India Corruption, public or private, venality is sanctified by he oldest traditions, it is denied by nobody indeed, the totality and pervasiveness of Indian Corruption is almost a matter of national pride. Just as Indian's droughts are the driest, her famines the most cruel, the over population the most uncontrollable, so are all aspects of Indias corruption and bribery the most wholly widespread and spectacular, Corruption in the modern context has acquired much wider connection compared to the traditional, it is denied by nobody indeed, the totality and pervasiveness of India corruption is almost a matter of national pride. Just as a Indias droughts are the driest, her famines the most cruel, the over population the most uncontrollable, so are all aspects of Indias corruption and bribery or illegal gratifications taken by public servants gains in cash, kind or position by persons in government and those associated with public and political affairs.

CORRUPTION IN GOVERNMENT Various factors have been responsible for the wide spread corruption among government servants. While some factors are the same as in the case of white-collar crimes in general, there are some factors which have a special bearing on the problem of 69,Provident Investment Company V.I.T.C, AIR 1954 Com95. Corruption among government and other public servants. The two World War gave vast power to the government servents in matters relating to the grant f licences permits and quotes. This was a potentially dangerous situation in view of the acute shortage of essential commodities to make quick money. After the second World War, the newly acquired independent brought many many opportunities to the corrupt officials. Not only that the government participation in the various economic activities created better opportunities fo the corrupt persons, they also benefited by the general fall in the discipline and efficiency in the public services. It is not infrequent that politicians come to the rescue of the guilty person provided given to the government servants are meant to prevent victimization but quite frequently those rights also created hurdles in punishing those who deserve it. Some other factors which make public servants corrupt are connected with the economic conditions of most of the governments employees. In India, through the government service have some special prestige, the salaries given to the employees, by and large, are quite low. This
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factor is combination with some other factors like inflation contributes a great deal towards corruption. The two government departments which have been traditionally notious for corruption so far but lately some unhealthy trends have set in so far as the subordinate judical officers are concerned..

POLITICAL CORRUPTION Corruption among ministers and other politicians personages is more dangerous than corruption in the governmental machinery in term of the enormity of the stakes involved in public life. The corruption and indency in political life informs all the sections of the society since violation are committed by those very persons who are expected to set the norms of social and political conduct. It is common knowledge that many politicians. In quite a few decided cases, magistrate have been found guilty of corruption.In Delhi as many four civil judge have been removed from their office and their kith and kin have reaped good honest n terms of big money and good position through the abuse of government machinery at their disposal. The Santhanarn Committee noted that while there were elaborate rules to ensure probity among officials there were none for ministers, legislators and political parties. The more usual forms of political corruption in India are grafts, Violations of election laws and the abuse of officials and political machinery because of the liaison of political forces with big business. The well known episode known as Mundhra and Siraj ud din affairs involving central cabinet minister are typical example of political corruption. More recently there was a license scandal in which quite a few members of Parliament were implicated.


Among the many professions where opportunities for committing white-collar crimes are frequent the profession which come readily to ones mind on those of medicine and Low. The majority of the people belonging to the medical profession may not commit criminal or unethical acts in the course of their profession but still the number of those who violate the professional and legal norms is not insignificant. The most common instances are illegal abortions, false medical certificates and unnecessary prolonged treatment in many cases. Another wide spread violation consist of prescribing medicine which one is not supposed to having regard to his training or the system of medicines of the allopathic system like antibiotics are free administered by many physicians practicing in the Unani or Ayurvedic system without having the faintest idea of the properties and the possible repercussions of those medicines.

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White collar criminality among lawyers is believed to be a fairly wide spread. Through such criminality is to be found in many countries, the situation in India is Further aggravated by the fact. DIFFERENTIAL TREATMENT FOR WHTE-COLLAR OFFENDERS

BLUE COLLAR CRIME The types of crime committed are a function of the opportunities available to the potential offender. Thus, those employed in relatively unskilled environments and living in inner-city areas have fewer "situations" to exploit (see Clarke: 1997) than those who work in "situations" where large financial transactions occur and live in areas where there is relative prosperity. Bluecollar crime tends to be more obvious and attract more active police attention (e.g. for crimes such as vandalism or shoplifting which protect property interests), whereas white-collar employees can intermingle legitimate and criminal behavior and be less obvious when committing the crime. Thus, blue-collar crime will more often use physical force whereas in the corporate world, the identification of a victim is less obvious and the issue of reporting is complicated by a culture of commercial confidentiality to protect shareholder value. It is estimated that a great deal of white collar crime is undetected or, if detected, it is not reported. STATE CORPORATE CRIME Because the negotiation of agreements between a state and a corporation will be at a relatively senior level on both sides, this is almost exclusively a white-collar "situation" which offers the opportunity for crime. The empirical data clearly demonstrate a double standard between white-collar crimes and socalled street crimes. There are a number of reasons to explain why white-collar criminals are not more rigorously pursued. By virtue of their relative affluence, those accused as white-collar offenders are able to afford the fees of the best lawyers, and may have friends among senior ranks of the political elite (see Cronyism), the judiciary and the federal law enforcement agencies. These connections often not only ensure favorable treatment on an individual basis, but also enable laws to be drafted or resource allocations to be shifted to ensure that such crimes are not defined or enforced too strictly. It is a fact that virtually no police effort goes into fighting white-collar crime, and the enforcement of many corporate crimes is put into the hands of government agencies like the United States Environmental Protection Agency which can act only as watchdogs and point the finger when an abuse is discovered. This more benign treatment is possible because the true cost of white-collar crime, while high in nationally consolidated accounts, is diffused through the bank balances of millions either by way of share value reductions, or nominal increases in taxation, or increases in the cost of insurance. And because it can be difficult to assign blame, e.g. environmental damage may be serious but corporations cannot be sent to jail and, if those senior officers are removed from their positions, it may be more damaging to the organization itself which employs many ordinary and innocent people, and to the shareholders who had no role to play in taking criminal decision. Different public policies are at work and there are differences in the level of public interest, case complexity, and a lack of

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white-collar related literature, all of which has a significant effect on the way white-collar offenders are sentenced, punished, and perceived by the public. Another reason for differential treatment might be the fact that criminal penalties tend to be more reflected to the degree of physical force or violence involved than to the amount of monetary loss, all other things being equal. Because white-collar crimes are committed by those with opportunities that do not require violence, they are far less likely to garner more severe criminal penalties. For example, someone who mugs a victim on the street by threatening to knife them, and steals their wallet, might very likely be punished with a more severe sentence than an inside trader who cheats shareholders out of a million dollars.

STRATEGIC OBJECTIVES H.1 Reduce levels of corporate fraud by targeting those groups or individuals engaged in major corporate fraud schemes that significantly impact the investing public and financial markets. Fraud by company executives and those in positions of trust not only damages stockholders, but also erodes public confidence in the corporate community at large. The FBI will continue increasing its efforts in this area by using agents and analysts with high degrees of expertise in financial investigations. The sheer complexity of illegal corporate transactions require extraordinary time and commitment to investigate. PRIORITY ACTIONS Expand the intelligence base through private sector and community outreach specifically focused on private industry personnel, government regulators, and all levels of law enforcement. Initiate major investigations on all aspects of corporate fraud. Incorporate aggressive asset forfeiture actions in every criminal case to strip violators of their illgotten gains. Develop human sources that can substantially reduce the time and resources dedicated to complex investigations. H.2 Reduce the incidence of large scale health care frauds, involving both government-sponsored and private insurer programs. Because the illegal profit potential for this crime problem is virtually unlimited, and because the health care industry is among the most complex, the FBI must continue to build on its relationships with related government agencies and stakeholders to effectively prevent abuse. PRIORITY ACTIONS

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Expand the intelligence base to identify regional fraudulent billing patterns within vulnerable segments of the health care industry such as pharmaceuticals, durable medical equipment, transportation services, outpatient services, and home health services. Deter health care fraud by identifying and targeting national regional chains of service providers engaged in systemic health care schemes. Incorporate aggressive asset forfeiture actions in every criminal case to strip violators of their ill-gotten gains. H.3 Reduce fraud perpetrated by criminal enterprises targeting financial institutions. The health of our countrys financial institutions remains a national economic priority. The FBI will continue to prevent financial losses to these institutions by focusing on criminal enterprises engaged in financial institution fraud, including insider fraud, major check fraud, mortgage fraud, and identity theft. PRIORITY ACTIONS Improve relationships with traditional, as well as non-traditional and expanding industries. Expand the intelligence base in order to identify major criminal enterprises that victimize financial institutions on a regional and national basis. Conduct worldwide investigations to dismantle criminal enterprises engaged in significant financial institution fraud. Implement strategies to increase the number of asset forfeiture actions in criminal cases to strip violators of their ill-gotten gains. Expand the use of nationally-coordinated initiatives and investigations, using emerging investigative techniques. H.4 Disrupt and dismantle the most significant money laundering institutions and facilities. The FBI will target the most significant corrupt money laundering industries and facilities in the United States by increasing the cost of criminal activity, creating barriers to entry of illegal proceeds into the financial community, developing national strategies to address the mechanisms and industries commonly used to launder funds, and by reducing the flow of criminal assets through seizure and forfeiture. PRIORITY ACTIONS Expand the intelligence base to identify methodologies, geographic anomalies with domestic and international criminal proceeds, and significant money laundering enterprises, industries and facilities. Conduct worldwide investigations that result in the dismantlement of those enterprises, industries, and facilities engaged in significant money laundering.

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Incorporate research and analysis software products into the overall intelligence base. Increase the number of human sources reporting on significant money laundering activities. Ensure potential money laundering strategies are incorporated into counterterrorism and criminal enterprise investigations to maximize asset forfeiture potential. Provide extensive training to the entire Law Enforcement Community to promote the use of asset forfeiture and money laundering statutes in all investigations. H.5 Reduce the impact of telemarketing, insurance, and investment fraud on businesses and individuals, particularly schemes originating from outside the United States. Telemarketing fraud typically targets the elderly, one of the most vulnerable segments of our society. The FBI will focus on major telemarketing enterprises, recognizing the difficulties faced by state and local investigators because criminal operations typically cross jurisdictional lines often internationally. Insurance and investment fraud have similar multi-jurisdictional attributes, making enterprises difficult to investigate and prosecute by state and local agencies.

PRIORITY ACTIONS Expand the intelligence base on telemarketing fraud. Develop and execute a public awareness campaign about Telemarketing and insurance fraud to reduce its impact on communities and business. Increase the number of human sources that can provide detailed information on criminal enterprises engaged in telemarketing fraud. Expand the use of nationally-coordinated initiatives and investigations, using sophisticated and innovative investigative techniques. H.6 Address those investigative matters which represent the most significant economic losses within federally-funded procurement, contract, and entitlement programs, environmental crimes, bankruptcy fraud, and anti-trust offenses. Because government fraud is inextricably linked to the FBIs obligation to combat public corruption and national security threats, the FBI will focus efforts on major schemes with those links. Because serious public health and safety concerns relate to environmental crime, the FBI will enhance its working relationships with federal, state, and local investigative and regulatory agencies to address this crime problem. We will also focus on bankruptcy and anti-trust offenses having the greatest negative economic impact. PRIORITY ACTIONS

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Increase the intelligence base on government fraud, environmental crimes, and major bankruptcy fraud. Establish a deterrence by identifying, prioritizing, and targeting most egregious violators and enterprises. Incorporate aggressive asset forfeiture actions in every criminal case to strip violators of their illgotten gains. WHITE COLLAR STATISTICS White collar crime is a term that is applied to nonviolent crimes committed in business situations by individuals, groups or corporations for the purpose of financial gain. Most white collar crimes are associated with some type of fraud, often involving a lending institution, such as a bank or insurance agency. Examples of white collar crime include: antitrust fraud, bankruptcy fraud, bribery, computer fraud, credit card fraud, counterfeiting, embezzlement, identity fraud, insider trading, insurance fraud, kickbacks, money laundering, obstruction of justice, perjury and price fixing. White collar crime is steadily on the rise, thanks to our technologically advancing society, which relies on the increased use of cellular phones and computers to access personal and financial information. The National White Collar Crime Center (NW3C), a nonprofit agency that supports state and local police in their efforts to prevent, investigate and prosecute economic and hightech crime, reports that while arrests for violent crimes have decreased in recent years, arrests for white collar crimes - especially fraud and embezzlement - have increased. The rise in white collar crime incidents has also contributed to a rise in cost to the nation. According to National Fraud Center statistics, the cost of economic crime has risen from $5 billion in 1970 to $100 billion in 1990, and is only expected to increase as occurrences become more frequent. For example, the Federal Bureau of Investigation''s Economic Crime Unit reports that telemarketing fraud, one of the fastest growing types of white collar crime, has become an increasing problem in recent years, victimizing millions of people at a cost of $40 billion annually. Statistics from NW3C also approximate that one in three households is the victim of white collar crime, yet of these, only 41 percent report the incident. Of the small number reported, only 21 percent are handled by a law enforcement or consumer protection agency.

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Experts believe that many people fail to report white collar crime because they are unaware that they have been victimized. Many of those who are aware of a suspicious incident are unsure of whether or not it is an actual crime, and of those who are knowledgeable, many are either unsure who to contact or believe no resolution will come from reporting the crime. NW3C encourages awareness on the part of both the public and law enforcement agencies as a preventive measure against the future of white collar crime.


The U.S. General Accounting Office defines money laundering as "the disguising or concealing of illicit income to make it appear legitimate." Money laundering involves transferring illegally received monies into legal accounts so that when money is withdrawn from those accounts, it appears to the police or other government authorities to be legal earnings of the account or the business. When a money-laundering scheme is successful, the criminals can spend their illegally acquired money with little fear of being caught. Many of the techniques that launderers use would be perfectly legal business transactions if the source of the cash were not illegal activities. The money-laundering scheme may be as simple as mailing a box of cash to an accomplice in another country where there is very little bank regulation. The accomplice deposits it in the local bank. The sender then writes a check on that bank and can use the money without fear of anyone knowing where the money came from. Other schemes may involve bribing a bank officer to permit illegal monies to be put in good accounts and then drawing the monies out. Over the years, the federal government has enacted a number of laws to prevent money laundering. To prevent criminals from using financial institutions to hide or launder their illegally gained money from the authorities, the Bank Secrecy Act of 1970 required banks to report transactions involving currency of more than $10,000, the transfer of more than $10,000 into or out of the country, and any suspicious activity that may be illegal. The Money Laundering Control Act of 1986 criminalized money laundering, making it a crime to knowingly engage in any monetary transaction involving more than $10,000 obtained by criminal activity or to structure financial transactions to avoid the $10,000 reporting threshold. The Anti-Drug Abuse Act of 1988 called for banks to have stricter checks on customer identification and more stringent record keeping. The act also allowed the Treasury Department to monitor currency transactions by geographical region. In 1994 the Money Laundering Suppression Act gave bank examiners stronger procedures for monitoring the activities of financial institutions. The Money Laundering and Financial Crimes Strategy Act of 1998 created the National Money Laundering Report, an intergovernmental national plan to coordinate all law enforcement activities against money laundering from local through federal levels. It also authorized the designation of High Intensity Financial Crime Areas, those with a high risk for money laundering or financial crimes, and Financial Crime-Free Communities, to allow law enforcement to focus their prevention efforts appropriately.

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