White Collar Crime
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Shree Rastogi, B.Com LLB, SHRI RAMSWAROOP MEMORIAL UNIVERSITY
What is it?
White Collar Crimes are crimes that are committed by an individual in respect of high social status subsequently during the course of his occupation. It’s committed by salaried professional workers and persons in business and they therefore also involves a form of financial theft or fraud.
The term “White Collar Crime” was defined by sociologist Edwin Sutherland in 1939. These crimes are non-violent crimes performed by business people through representing activities who are able to access large amount of money for their financial profit.
People who are indulged in this crime are who involved in otherwise, lawful businesses and cover ups a wide range of activities; it is being expanding over business and technology. The laws relating to this crime depends upon the exact nature of the crime committed.
Types of White Collar Crimes:
- Blackmail (demanding money in exchange not exposing secrets, causing physical harm, damaging property).
- Embezzlement or Misappropriation of Property: (Theft of money, goods or services by an employee).
It involves the intentional misrepresentation or omission of a material fact and someone must suffer a monitory loss as a result. It includes Bankruptcy fraud, Computer fraud, Health care fraud, Telemarketing fraud, Credit card fraud, Mail fraud, Government fraud, Financial fraud, Securities fraud, Counterfeiting.
Violation of Statutory Law
- Anti-Trust Violation: Fixing prices and building monopolies.
- Bribery: Offering money, goods, services, information or any gift to someone in order to have control to its actions.
- Tax evasion: Providing wrong information in Tax forms or not filling tax returns at all.
- Money laundering: The concealment of origin of legally obtained money.
- Public Corruption: Breaching the public trust/or abusing a government position, usually in connection with private sector accomplices.
- Environmental Law violations: Discharging the toxic substances into air, water or soil that harms people, property or environment, including air and water pollution and air dumping.
It also includes insider training, kickbacks, extortion, etc.
Causes of White Collar crime:
Each and every crime as its own reasons, there is a general perception that these crimes take place in sake of greed or economic instability. Some other reasons like: situational pressure, or the inherent nature of having more than others. There are some people, who want quick benefits with minimal efforts; some thinks whatever is performed by them is not a crime as the acts involved doesn’t looks like street crimes; necessity is also an another factor for committing these crimes in order to support their family. The main reason is lack of awareness (as this crime is different from traditional crimes and people hardly understand it though they are the worst victims of crime).
White Collar Crime in India
These crimes are increasing rapidly in our country by the advancement of commerce and technology. We got the new dimensions to computer related crimes mostly termed as Cyber Crimes. The proportion of crimes is increasing as per the development of new websites. Largely affected areas are financial institutes, industries, business, transportation etc. The crime is an act or omission which constitutes an offence and is punishable under the law. Increment of crimes on daily basis do injures the society on a large scale. In India there are some scams that shook India were:
Satyam Fraud case in 2009: Rs.7, 000-crore fraud by former Satyam CEO Ramalinga Raju started off without any background in IT Company grew with India’s IT story. The scam broke after a spate of resignations force the company to look at financials. The case questioned the role of auditors, shareholders, senior managements.
The Mallya Case in 2016: Directorate has registered money laundering case against Vijay Mallya and his associates to investigate the alleged loan default of Rs. 6,027-crore.
Laws relating to it:
The government of India has introduced various regulatory legislations, the breach of which will amount to white collar criminality. Some of these legislations are Essential Commodities Act 1955, The Industrial (Development and Regulation) Act, 1951.The Import and Export (Control) Act, 1947, the Foreign Exchange (Regulation) Act, 1974, Companies Act, 1956, Prevention of Money Laundering Act, 2002.
Some provisions are been made under the Indian Penal Code to check crimes such as Bank fraud, Insurance fraud, Credit Card fraud etc. In case of Money Laundering several steps have been taken by the government of India to cure this problem. The Reserve Bank of India issued directions to be strictly followed by the banks under KYC ( Know Your Customer) guidelines. The banks and financial institutions are required to maintain the records of transactions for a period of ten years.
Section 43 and Section 44 of the Information Technology Act prescribe the penalty for the offences:
- Unauthorized copying of an extract from any data.
- Unauthorized access and downloading files.
- Introduction of viruses or malicious programs.
- Damage to computer system or computer network.
- Denial of access to an authorized person to a computer system.
- Providing assistance to any person to facilitate unauthorized access to a computer.
As a coin has two faces similarly everything in World has its faces; if we talk about technology its achievements gave us so many things to make us advanced but sometimes this advancement of science and technology give birth to newer form of criminality known as White Collar Crime that has arisen. India to maintain its growth story needs to reduce fraud and corruption in the government and the private sector. The special Acts dealing with White Collar Crimes and the provisions of Indian Penal Code should be harmoniously interpreted to control the problem of these crimes. Although some people think that others are also violating the laws and so it is not bad if they will do the same. This type of mentality of people will definitely lead to increase in corruption and crimes. There are some protective measures also that do taken place. There are provisions of India Penal Code dealing with White Collar Crimes should be amended to enhance punishment that is totally suitable in tune with changing socio-economic conditions.