White Collar Crime

Introduction

There are certain anti-social activities which the persons of upper strata carry on in the course of their occupation or business. These anti-social activities are called white-collar crimes. White collar crimes involve criminal activities committed by people in the regular course of their business and involve bribery, extortion, fraud and embezzlement. White-collar crime is pervasive in almost all the professions and occupations in our society. Such crime activities for a long time were accepted as a part of usual business tactics necessary for a shrewd professional man for his success in profession or business. The problem is quite acute, both in terms of variety and the extent of white-collar criminality.

These crimes usually end in financial gain for the perpetrator. White-collar crime was more dangerous to society than ordinary crimes because of greater financial losses and because of the damage inflicted on public morals. White collar criminality has become a global phenomenon with the advance of commerce and technology and India too is equally in the grip of white collar criminality. The recent developments in information technology have added new dimensions to white collar criminality. In a developing country like India where population is fast escalating, economic offences are increasing by leaps and bound besides the traditional crimes. These are mostly associated with middle and upper class of society and have added new chapter to criminal jurisprudence. This notion White Collar Crime was laid down for the first time in the field of criminology by Prof. Edwin Sutherland in 1941. The term “white-collar crime” has not been defined in the code. But the dimensions of white-collar crime are so wide that after analysing the provisions of Indian Penal Code 1860, we may conclude that certain offence under Indian Penal Code is closely linked with white collar crimes such as bribery, corruption and adulteration of food, forgery etc.

TYPES OF WHITE COLLAR CRIME

Bank Fraud, Blackmail, Bribery, Cellular Phone Fraud, Computer fraud, Counterfeiting, Credit Card Fraud, Currency Schemes, Embezz1ement, Environmental Schemes, Extortion, Forgery, Health Care Fraud, Insider Trading, Insurance Fraud, Investment Schemes, Kickback, Larceny/Theft, Money Laundering, Racketeering, Securities Fraud, Tax Evasion, Telemarketing Fraud, Welfare Fraud, Weights and Measures, Hoarding, Black Marketing and Adulteration, Fake Employment Placement Rackets.

SOME TYPES OF WHITE COLLAR SCHEMES, PLAN & STRATEGY

Coupon Redemption, Auto Repair, Check Kiting, Airport Scam, Directory Advertising, Fortune Telling, Gypsies, Home Improvement, Inferior Equipment, Jamaican Switch, Land Fraud, Odometer Fraud, Pigeon Drop, Police Impersonation, Ponzi, Pyramid, Quick Change, Shell Game, Utilities Impersonators, Electronic items & VCR Scam, West African Investment Scams, Advanced Fee Schemes, Emu farming, Iridium kalasam, Sand Snails or earthworm, Tree growing, Rice pulling, Maragatha Lingam, Lillyput, Allauddin lamp, Nagaratna kal (Cobra stone), Tippu sultan sword, One million American Dollor note, Bogar siddar made navabasana Idol, Gold treasure, Vikramathiyan throne, Magic wand etc., are some of the recent phony objects and plans used for cheating.

PROFESSIONAL WHITE-COLLAR CRIMINALITY

Medical profession: White collar crimes which are commonly committed by persons belonging to medical profession include issuance of false medical certificates, helping illegal abortions, secret service to dacoits by giving expert opinion leading to their acquittal and selling sample-drug and medicines to patients or chemists in India.

Engineering: In the engineering profession underhand dealing with contractors and suppliers, passing of sub-standard works and materials and maintenance of bogus records of work-charged labour are some of the common examples of white collar crime.

Legal Profession: The instances of fabricating false evidence, engaging professional witness, violating ethical standards of legal profession and dilatory tactics in collusion with the ministerial staff of the courts are some of the common practices which are, truly speaking, the white collar crimes quite often practiced by some legal practitioners.

Educational Institutions: Where collar criminals operate with impunity are the privately run educational institutions in this country. The governing bodies of those institutions manage to secure large sums by way of government grants of financial aid by submitting fictitious and fake details about their institutions. Also, collecting substantial sums in the name of uniforms, books, etc., apart from the usual heavy fees they collect.

Computer Related White Collar Crimes: The developments in information technology and electronic media have given rise to a new variety of computer related white collar crime which is commonly called cyber crimes. The widespread growth of these crimes has become a matter of global concern and a challenge for the law enforcement agencies in the new millennium. Because of the peculiar nature of these crimes, they can be committed anonymously and far away from the victim; without being physically present there.

Further, cybercriminals have a major advantage; they can use computer technology to inflict damage without the risk of being caught. The cyber crimes cover a wide range of illegal computer-related activities which include offences such as theft of communication services, industrial espionage, dissemination of pornographic and sexually offensive material in cyberspace, electronic money laundering and tax evasion, electronic vandalism, terrorism and extortion, telemarketing frauds, illegal interception of telecommunication, etc. Presently, viruses are the most common problems which are causing serious damage to computer systems. There are now more than 5000 different strains of viruses across the globe.

There are some common cyber offences which are directed, against computer systems, networks or data.

Notable among them are: (1) Pheakering (2) Internet frauds: (3) Hackers (4) Stalking (5) E-mail security invasion (6) Money Laundering (7) Data Diddling.

REASONS FOR GROWTH OF WHITE COLLAR CRIMES IN INDIA

In a country like India where large scale starvation, mass illiteracy and ignorance affect the life of the people, white collar crimes are bound to multiply in large proportion. Control of these crimes is a crucial problem for the criminal justice administration in this country.

a. White collar crimes are committed out of greed. The people who usually commit these crimes are financially secured.

b. Financial or physical duress.

c. White collar crimes are estimated to cost society many times more than crimes such as robbery and burglary. The amount of death caused by corporate mishap, such as inadequate pharmaceutical testing, far outnumbers those caused by murder.

d. The emergence of cutting edge technology, growing businesses, and political pressures has opened up new avenues for these criminal organizations to prosper.

e. This increase is due to a booming economy and technological advancement such as the Internet and fast money transfer systems. Law enforcement is sometimes reluctant to pursue these cases because they are so hard to track and investigate.

f. Naturally a question arises that if we have specific legislations to trace out White Collar Criminality then why these offenders go unpunished.

Main reasons for which these white Collar criminals or occupational criminals go unpunished are

i) Legislators and the law implementers belong to the same group or class to which these occupational criminals belong;
ii) Less police effort;
iii) Favorable laws;
iv) Less impact on individuals.

It is for the criminal law administrators to contain the tendency by stringent legislative measures. It is rather disappointing to note that though white collar crimes such as black market activities, evasive price violations, rent-ceiling violations, rationing-law violations, illegal financial manoeuvres etc. by the businessmen are widespread in society, no effective program for repressing them so far been launched by the law enforcement agencies. Perhaps the reason for white collar crimes being carried on unabated is that these crimes are committed generally by influential persons who are shrewd enough to resist the efforts of law, enforcement against them.

LAWS RELATING TO WHITE COLLAR CRIMES

The white-collar crimes which are common to Indian trade and business world are hoardings profiteering and black marketing. Violation of foreign exchange regulations (i e. FERA) and import and export laws are frequently resorted to for the sake of huge profits. Further, adulteration of food­stuffs, edibles and drugs which causes irreparable damage to public health is yet another white-collar crime common in India. White Collar Crimes are difficult to prosecute because they often involve sophisticated systems and even many different people. 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 Exports (Control) Act, 1947, the Foreign Exchange (Regulation) Act, 1974, Companies Act, 1956, Prevention of Money Laundering Act, 2002.

The Indian Penal Code contains provisions to check crimes such as Bank Fraud, Insurance fraud, credit card fraud etc. The Reserve Bank of India has 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. In order to tackle with computer-related crimes, Information Technology Act, 2000 has been enacted to provide legal recognition to the authentication of information exchanged in respect of commercial transactions.

Section 43 and 44 of Information Technology Act prescribes the penalty for the following offences:

• Unauthorised copying of an extract from any data.

• Unauthorised access and downloading files.

• Introduction of viruses or malicious programmes.

• Damage to computer system or computer network.

• Denial of access to an authorised person to a computer system.

• Providing assistance to any person to facilitate unauthorised access to a computer. Though the focus of Information Technology Act is not on cybercrime as such, this Act has certain provisions that deal with white collar crimes. Chapter XI deals with the offence of cyber crime and chapter IX deals with penalties and adjudication of crime. Apart from this, many issues are unresolved due to:

• Inapplicability

• Qualification for appointment as adjudicating officer not prescribed

• Definition of hacking

• No steps to curb internet piracy

• Lack of international cooperation

• Power of police to enter and search limited to public places

• Absence of guidelines for investigation of cybercrime

CONCLUSION

White-collar crime is a very much part of our social scene today and the issue before is how can we tackle this? The first point to recognize is that while the blue-collar crime is gruesome, well known and has an immediate impact, it is the white-collar crime which has greater anti-social impact. It is clear that due to advancement of science and technology newer form of criminality known as white-collar crime has arisen. The provisions of Indian Penal Code dealing with white-collar crimes should be amended to enhance punishment in tune with changed socio-economic conditions. The special Acts dealing with white collar crimes and the provisions of Indian Penal Code should be harmoniously interpreted. With white-collar crimes on the rise, it is necessary for the judiciary and police to distinguish between white-collar crimes, petty crimes and acts of homicide and violence. Sending everyone to the same jail will be unfair too. India needs different detention centers for different kinds of criminal misconduct.

At present, what we need is the strengthening of our enforcement agencies such as Central Bureau of Investigation, the Enforcement Directorate, The Directorate of Revenue Intelligence, The Income-tax Department and the Customs Department. Speedy trial should be arranged by appointing more Judges. Special Tribunals should be constituted with power to award sentence of imprisonment up to 5 years for white-collar crimes. Convictions should result in heavy fines rather than arrest and detention of white-collar criminals. Public vigilance to be improved by creating public awareness against these crimes through the media of press, and other audio-visual aids and legal literacy programmes. In India there is need for strengthening of morals particularly in the higher strata and among the public services. Unless the people strongly detest such crimes, it would be a tougher task to control this growing menace.