White Collar Crimes

The powerful work their bid

Who are the white – collared?
Refers to employees whose job entails, largely or
entirely, mental or clerical work, such as in an office.
it refers to employees or professionals whose work
is knowledge intensive, non-routine, and
unstructured.
WHAT DO WE MEAN

BY

White Collar Crimes? Some crimes are
committed right under the
victim's nose without a
single shot fired! 

• Sociologist Edwin Sutherland in 1939 defined it as

"a crime committed by a person of respectability and high social status
in the course of his occupation”
• White-collar crime refers to financially motivated, nonviolent crime committed by
business and government professionals.
General Examples of White Collar Crimes
• Bribery
• Extortion
• Fraud
• Embezzlement
• Cyber crime
What is so different about it??
• These crimes are difficult to prosecute because they often involve
sophisticated systems and even many different people.
• These types of crimes can cost citizens millions of dollars!
• Increasingly, it's not the crime itself that’s sophisticated or complex, but
the regulatory environment that creates and defines the crime. 
• Many of these crimes are internationally illegal, however nations may use
it to their interest.
For e.g. Stealing confidential data from other countries in the name of their
interests.
WHAT IS THE DIFFERENCE???

Bank executives found in

Cases of forgery;
Big businessmen
dupe
National bank with
millions of dollars
 Some famous cases in India

• Noormohmed Jamalbhai Latiwala vs State Of Gujarat on 25 March, 2004

• Balkrishna Chhaganlal Soni vs State Of West Bengal on 22 October, 1973
• Narinderjit Singh Sahni And Anr vs Union Of India And Ors on 12 October, 2001
• The Satyam embezzlement case, 2013
Embezzlement
 WHAT IS EMBEZZLEMENT?

Embezzlement is the act of withholding assets for the purpose of

conversion of such assets, by one or more persons to whom the
assets were entrusted, either to be held or to be used for specific
purposes. Embezzlement is a type of financial fraud.

For example, a lawyer might embezzle funds from the trust

accounts of their clients; a financial advisor might embezzle
the funds of investors; and a husband or a wife might
embezzle funds from a bank account jointly held with
the spouse.
 The Criminals Elements of Embezzlement

(i) Fraudulence: The requirement that the conversion be

fraudulent requires that the embezzler willfully, and without
claim of right or mistake, converted the entrusted property to
their own use.
(ii) Criminal conversion: Embezzlement is a crime against
ownership, that is, voiding the right of the owner to control
the disposition and use of the property entrusted to the
embezzler. The element of criminal conversion requires
substantial interference with the property rights of the owner.
The Criminals Elements of Embezzlement… continued…

(iii) Property: Embezzlement statutes do not limit the scope of the crime to conversions of personal property.
Statutes generally include conversion of tangible personal property, intangible personal property,
and choses in action. Real property is not typically included.
(iv) of another: A person cannot embezzle his or her own property.
(v) Lawful possession: The critical element is that the embezzler must have been in lawful possession of
the property at the time of the fraudulent conversion, and not merely have custody of the property. If the thief
had lawful possession of the property, the crime is embezzlement; if the thief merely had custody, the crime
at common law is larceny.
Methods of embezzlement

! Embezzlement sometimes involves falsification of records in order to conceal the activity.

Embezzlers commonly secrete relatively small amounts repeatedly, in a systematic and/or
methodical manner, over a long period of time, although some embezzlers secrete one large sum at
once.
! Embezzling should not be confused with skimming, which is under-reporting income and pocketing
the difference. For example, in 2005, several managers of the service provider Aramark were found
to be under-reporting profits from a string of vending machine locations in the eastern United States.
While the amount stolen from each machine was relatively small, the total amount taken from many
machines over a length of time was very large. A smart technique employed by many small-time
embezzlers can be covered by falsifying the records.
➢A method is to create a false vendor account and supply false bills to the
company being embezzled so that the checks that are cut appear completely
legitimate.
➢ Yet another method is to create phantom employees, who are then paid with
payroll checks.
➢Some of the most complex (and potentially most lucrative) forms of
embezzlement involve Ponzi-like financial schemes…the Madoff investment
scandal is an example of this kind of high-level embezzlement scheme, where
it is alleged that $65 billion was siphoned off from gullible investors and financial
institutions.
SAFEGUARDS against Embezzlement

Internal controls such as:

1.  Separation of duties
For example, at a movie theatre, the task of accepting money and admitting customers into the theatre
is typically broken up into two jobs. One employee sells the ticket, and another employee takes the
ticket and lets the customer into the theatre. Because a ticket cannot be printed without entering the
sale into the computer (or, in earlier times, without using up a serial-numbered printed ticket), and the
customer cannot enter the theatre without a ticket, both of these employees would have to collude in
order for embezzlement to go undetected.
2. To regularly and unexpectedly move funds from one advisor or entrusted person to another when the
funds are supposed to be available for withdrawal or use, to ensure that the full amount  of the funds is
available and no fraction of the savings has been embezzled by the person to whom the funds or
savings have been entrusted.
CASE STUDY- LALU PRASAD YADAV
Robert Vesco Embezzlement Case

! The SEC says that Vesco embezzled $224 million.

! As soon as the charges were filed, Vesco fled the country to Havana, Cuba.
! The CIA tracked down Vesco, but unfortunately, Cuba refused his extradition. Vesco
spent the rest of his days in South American countries with no extradition laws living off
of the money that he stole.
! The Watergate scandal and more than $200,000 of illegal campaign contributions to
Richard Nixon are also suspected. Robert Vesco died in 2007 although even his death
is shrouded in speculation.
Robert Vesco
 INTRODUCTION
• Fraud is an intentionally deceptive action designed to provide the
perpetrator with an unlawful gain, or to deny a right to a victim.
• Fraud can occur in finance, real estate, investment and insurance.
• It can be found in the sale of real property, such as land, personal property,
such as art and collectibles, as well as intangible property, such as stocks and
bonds.
• A fraudulent activity can be carried out by one individual, multiple
individuals or a business firm as a whole.
 BREAKING DOWN ‘FRAUD’
• Fraud is a criminal charge that may be issued both at state and national
levels depending upon the crime and factors of the violation.
• These offenses are considered white collar crimes, but even without violent
acts, others may be harmed in the process both physically as well as
financially.
• Perpetrators of the crime usually target information of a financial nature to
ensure monetary benefits are reaped. To obtain the data needed to
increase profits, the person committing these acts misrepresents himself or
herself in most instances.
• Other acts may include intentional deception to ensure the targeted items
are given, stolen or obtained through various means.


 TYPES OF FRAUD
• IDENTITY THEFT
• PAYROLL FRAUD
• WORKER’S COMPENSATION
FRAUD
• TAX FRAUD
• CREDIT CARD FRAUD
 IDENTITY THEFT
• Identity theft is no longer only a consumer crime. Thieves have learned that
businesses also have identities that can be stolen. To criminals, business
identity theft means the potential for even more easy money and goods.
• Fraudsters could also have access business bank account if employees lose
paychecks. Paychecks are very sensitive since they contain your business’s
routing and bank account numbers.
 PAYROLL FRAUD
• Payroll fraud is the theft of cash from
a business via the payroll processing
system.
• Employees might ask for pay
advances without paying them
back.
• Employees could also get co-workers
to clock in for them even if they
aren’t at work.
• Employees might lie about hours
worked on their timesheets
 WORKER’S COMPENSATION FRAUD
• In these types of fraud, an employee exaggerates injuries or a disability,
invents injuries that did not occur or attributes injuries that occurred outside of
the work environment to receive compensation pay.
• It is also committed when they lie about their health or work status while
receiving compensation.
 TAX FRAUD (OR TAX EVASION)
• Tax fraud occurs when an individual or business entity willfully and intentionally
falsifies information on a tax return in order to limit the amount of tax liability.
• Tax fraud essentially entails cheating on a tax return in an attempt to avoid
paying the entire tax obligation.
• Examples of tax fraud include:
1. claiming false deductions;
2. claiming personal expenses as business expenses;
3. using a false Social Security number; and not reporting income.
 CREDIT CARD FRAUD
• An individual uses someone else’s credit card information to charge
purchases, or to withdraw funds from the account.
• It also includes the fraudulent use of a debit card, and may be
accomplished by the theft of the actual card, or by illegally obtaining the
cardholder’s account and personal information, including the card number,
the card’s security number, and the cardholder’s name and address.
• As online shopping and bill paying has skyrocketed in popularity, there is no
longer a need to possess a physical credit card or debit card to make
purchases, and it is possible even to open a financial account, and obtain
credit cards solely through online transactions
 BRIBERY

BRIBERY is the act of

giving or receiving
something of value in
exchange for some kind of
influence or action in
return, that the recipient
would otherwise not posses.
"For example, a criminal may bribe police to avoid arrest or
a businessman may bribe a tax-official for protecting
himself while evading taxes.
"A common man can bribe the TT to board train on the
basis of wait-listed ticket or bribe the electricity meter
reader to manipulate the meter to show less electricity bill.
There are several reasons for bribery. Some of
these can be listed as following
1.Wide gap between demand and supply of
government services
2.Lower salaries of government officials
3.Lack of performance linked pay in
government system
4.Lack of adequate punishment system for
inefficient and corrupt officials
" The willingness of citizens to pay bribe for
expediting their work
" Inadequate anti-corruption machinery to
investigate and prosecute corrupt officials
" Slow justice delivery system in Courts
" Use of black money by political parties during
campaigning
" Social acceptance of corrupt public servants
in the country
 LAWS
" Prevention of Corruption Act,1988

" Service Rules for Government Officials

" Foreign Contribution Regulation Act, 2010

" Right to Information Act, 2005

" Central Vigilance Commission Act, 2003

" Lokpal and Lokayuktas Act, 2013

" Companies Act, 2013

" Prevention of Money Laundering Act, 2002

" Back Money and Imposition of Tax Act, 2015

The giver and taker of bribe are equally responsible for corruption and bribery and they both are punishable
according to the law
" Bribe can be demanded by a government official for getting the legitimate work done.

" Bribe can also be given to the government official by the citizens or businessman for getting their illegal work
done.
" There can be no bribery if the citizens are honest and they refuse to
bribe.
" There can be no bribery if the government officials are honest and they
refuse to accept bribe.
" Since the government officials and the citizen are part of the same
society, hence honest government officials can’t exist without honest
citizen and vice-versa.
CLIPPINGS
We looked at individual solutions,
Now, let us search a general one…
SUMM
ARIZE
SOLUT
IONS
WE NEED TO WORK WITH CHILDREN…
• CORRUPTION IS NOT A SUDDEN OUTBURST.
• BUT, WE ARE TAUGHT TO BE CORRUPT IF NEEDED SINCE CHILDHOOD…IT IS OFFICIALLY
DESIGNATED AS ‘COMPROMISE FOR A GREATER GOOD’

SOCIAL
• SOCIETY ALSO EULOGIZES MEN WHO HAVE A LOT OF MONEY AND EXTOLS THEIR
VIRTUES IRRESPECTIVE OF HOW THEY CAME INTO MONEY. NATURALLY YOUNG MEN
AND WOMEN TEND TO (OR SEEK TO) FOLLOW IN THE FOOTSTEPS OF THESE MONIED
MEN.
• HOW MANY TIMES DOES AN AVERAGE WORKING PARENT TELLS HIS CHILD THAT PASS
WITH ETHICS AND IF YOU ARE UNPREPARED, IT IS BETTER TO FAIL???
• HOW MANY TIMES DO WE TRY TO TELL THE CHILDREN THAT REMUNERATION IS
PROPORTIONAL TO SKILLS??
SOCIAL
In the words of Osho…

“Nature is absolutely innocent”

It knows nothing which can be called corruption.
Corruption is something manufactured by man.
The child is born absolutely innocent, there is no seed of corruption in him.
The corruption is created by the society for its own purpose. It does not
want innocent people around because there is nothing more dangerous,
more rebellious than innocence.
All societies are afraid of innocent people because they will not support
anything that goes against their innocence, that goes against their nature.”
• To combat white-collar crime, the U.S. Congress passed a wave of laws and statutes in
the 1970s and 80s. The Racketeer Influence and Corrupt Organizations Act (RICO)
was originally associated with mafia-related organized crime, but was soon applied to

LEGAL
white-collar crime
• Sarbanes-Oxley Act (SOX) in 2002 to improve corporate governance -- the
relationship and accountability between corporations and their stakeholders.
• However, in certain societies like some in Western Africa, it was customary that
businessmen or even government officials work on tips -- an important and legal
source of income. This is referred to as the dash system, where a dash is a tip. 
• In Russia and other countries, bribes are sometimes required in order to land a
contract -- which can make conducting squeaky-clean business impossible.
 

One of the universal economic dilemmas

is how to squelch white-collar crime
US, Russia and Africa
without discouraging healthy business
growth that benefits the consumer. model
 On national level in India, several
laws exist against it…
• Essential Commodities Act 1955
LE
• the Industrial (Development and Regulation) Act, 1951
The Import and Exports (Control) Act, 1947
GA
L
•

• the Foreign Exchange (Regulation) Act, 1974

• Companies Act, 1956
• Prevention of Money Laundering Act, 2002
• 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.
• Section 43 and 44 of Information Technology Act prescribes the penalty for cyber crimes.
 A L
L EG

Solution
Proposed
in
Canada
 Thank You all…
Wishing a bright and
corruption free tomorrow…