DAMODARAM SANJIVAYYA NATIONAL LAW UNIVERSITY,

VISAKHAPATNAM

CRIMINOLOGY

PROJECT TOPIC- WHITE COLLAR CRIME

SUBMITTED TO : DR. VARALAKSHMI

SUBMITTED BY: ANMOL GIRI

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 ACKNOWLEDGEMENT

The final outcome of this project required a lot of guidance and assistance from many people
and I am extremely privileged to have got this all along the completion of my project. All that
I have done is only due to such supervision and assistance and I would not forget to thank
them.

I respect and thank Dr. Varalakshmi], for providing me an opportunity to do the project work
on White Collar Crime and giving us all support and guidance which made me complete the
project duly. I am extremely thankful to her for providing such a nice support and
guidance.She took keen interest on our project work and guided us all along, till the completion
of our project work by providing all the necessary information for developing a good system.

SIGNATURE
(FACULTY)

CERTIFICATE

This is to certify that the criminology project titled “white collar crimes” has
been successfully completed by ______________________________________
of semester VII, in the evaluation of the course of B.A, L.L.B. it has been
completed under the guidance of Dr.Varalakshmi.

SIGNATURE
FACULTY OF CRIMINOLOGY, DSNLU

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 CONTENTS

1) INTRODUCTION……………………………………………………………………………5
2) THE WHITE COLLAR CRIME……………………………………………………………….7

3) CAUSES OF WHITE COLLAR CRIMES…………………………………………………...11

4) OTHER CRIME V. WHITE COLLAR CRIMES……………………………………………….12

5) LAWS RELATING TO WHITE COLLAR CRIME IN INDIA……………………………….13

6) TYPES OF WHITE COLLAR CRIME………………………………………………………...14
7) LEGAL FRAMEWORK……………………………………………………………………...….19

8) MEASURES……………………………………………………………………………………. 20

9) CONCLUSION………………………………………………………………………………....21
10) BIBLIOGRAPHY……………………………………………………………….………22

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 ABSTRACT:

The famous Criminology Professor Edwin H. Sutherland coined the term ‘White Collar Crime’
as “the crime committed by a person of respectability and high social status in course of their
occupation”. Sutherland through this definition included in it the big corporations and legal
entities, which was earlier considered to be only committed by the lower class. With the
development of technology, White Collar Crime has become a global phenomenon and in India
it is increasing at a tremendous pace because of the increase in the economical and industrial
growth. There has been an unusual and unexpected increase in the growth of computer specific
white collar crime which brings a great challenge for the law enforcement agencies as these
crimes can be committed from anywhere in the world by any anonymous person. There are
many professions where criminal and unethical practices are often going unnoticed. In order to
gain more for themselves, some unethical professionals indulge into illegal activities without
fear of loss of respect and prestige. This paper provides a detailed understanding behind the
motives of people committing crimes. Researchers have named ―the people committing
crime, where the crimes were minimal and confined to a particular area of administration‖ as
Grass Eaters. People involved in white collar crimes and which has spread in almost all fields
of business are termed as Meat Eaters. With the advent of technology and growth of education,
white collar crimes are on the rise, being protected by professionals finding loopholes in the
judiciary and support from the government indirectly

INTRODUCTION

White-collar crime was defined by Edwin Sutherland as a “crime committed by a person of

respectability and high social status in the course of his occupation.” Since this term was coined
by Sutherland in 1939 during his speech for American Sociological Society, debates have risen
as to what particular crimes will be considered as white collar crimes. In general and ambiguous
terms, non violent crimes for financial gain were considered to be under this category. Some

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of the most common activities under white collar crimes include antitrust violations, different
types of fraud (computer and Internet, credit card, bankruptcy, mail, financial and healthcare
frauds), insider trading and environmental law violations. Powers of the members of the
government, through another means of checks and balances, are also limited by including
public corruption and money laundering under white-collar crimes as well (Cornell University,
2010).1

In the modern judicial systems, common sanctions given to white-collar crimes offenders
include house arrest, fines and financial penalties, sentences of up to 30 years, and offenders
of economic crimes can be sentenced as much as that of offenders for violent street crime. The
sentencing guidelines are particularly applied by computing the effects or loss caused by the
fraudulent acts. Some of the famous white-collar offenders that were prosecuted were Bernard
Ebbers of WorldCom, Jeffrey Skilling of Enron, and John Rigas and son Timothy Rigas of
Adelphia (Podgor, 2007).

Despite the continuous development of the concept of white-collar crimes, no consensus has
been made about a criminology theory that explains white-collar crimes. Experts of the
sociology, legal, and criminology areas have clashing theories.

White Collar Crimes are the crimes committed by a person of high social status and
respectability during the course of his occupation. It is a crime that is committed by salaried
professional workers or persons in business and that usually 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 committed by business people through deceptive activities
who are able to access large amounts of money for the purpose of financial gain. White Collar
Crimes are committed by people who are involved in otherwise, lawful businesses and covers
a wide range of activities. The perpetrators hold respectable positions in the communities
unless their crime is discovered. The laws relating to white-collar crimes depends upon the
exact nature of the crime committed. White Collar Crimes may be divided into Occupational

1
David T. Johnson & Richard A. Leo, The Yale White-Collar Crime Project: a Review and Critique, THE
AMERICAN BAR FOUNDATION 63, 65 (1993).

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Crime and Organizational 2Crime but in common parlance there exist 10 popular types of
White Collar Crimes as:
1. Bank Fraud- To engage in an act or pattern of activity where the purpose is to defraud a
bank of funds.
2. Blackmail- A demand for money under threat to do bodily harm, to injure property or to
expose secrets.
3. Bribery- When money, goods, services or any information is offered with intent to influence
the actions, opinions and decisions of the taker, constitutes bribery.
4. Cellular Phone Fraud- Unauthorized use or tampering or manipulating cellular phone
services.
5. Embezzlement- When a person, who has been entrusted with the money or property,
appropriates it for his or her own purpose.
6. Counterfeiting- Copies or imitates an item without having been authorized to do so.
7. Forgery- When a person passes false or worthless instruments such as cheque or counterfeit
security with intent to defraud.
8. Tax-Evasion- Frequently used by the middle-class to have extra-unaccounted money.
9. Adulteration- Adulteration of foods and drugs.
10. Professional crime- Crimes committed by medical practitioners, lawyers in course of their
Occupation.
These crime are committed by people of high status in society such as doctors, advocates,
chartered accountants, governments officials and not by hardcore criminals for e.g. Thieves
robbers, dacoits, murders, rapists, etc means of crimes differ from the traditional crimes as
fraud, adulteration, malpractices, irregularities etc. These crimes are committed by means of
deliberate and planned conspiracies without any feeling and sentiments. When socio-economic
crimes are committed people tend to tolerate them because they themselves indulge in them
and they themselves often identified with those who do so.

White Collar Crimes are the crimes committed by a person of high social status and
respectability during the course of his occupation. It is a crime that is committed by salaried
professional workers or persons in business and that usually involves a form of financial theft

2Laura Shill Schrager & James F. Short, Toward a Sociology of Organizational Crime, 25 SOCIAL PROBLEMS 407,
411–12 (1978

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or fraud. The term “White Collar Crime” was defined by sociologist Edwin Sutherland in 1939.
These crimes are non-violent crimes committed by business people through deceptive activities
who are able to access large amounts of money for the purpose of financial gain. White Collar
Crimes are committed by people who are involved in otherwise, lawful businesses and covers
a wide range of activities. The perpetrators hold respectable positions in the communities
unless their crime is discovered. The laws relating to white-collar crimes depends upon the
exact nature of the crime committed.

White Collar Crimes may be divided into Occupational Crime and Organizational Crime but
in common parlance there exist 10 popular types of White Collar Crimes as:
1. Bank Fraud- To engage in an act or pattern of activity where the purpose is to defraud a
bank of funds.
2. Blackmail- A demand for money under threat to do bodily harm, to injure property or to
expose secrets.
3. Bribery- When money, goods, services or any information is offered with intent to influence
the actions, opinions and decisions of the taker, constitutes bribery.
4. Cellular Phone Fraud- Unauthorized use or tampering or manipulating cellular phone
services.
5. Embezzlement- When a person, who has been entrusted with the money or property,
appropriates it for his or her own purpose.
6. Counterfeiting- Copies or imitates an item without having been authorized to do so.
7. Forgery- When a person passes false or worthless instruments such as cheque or counterfeit
security with intent to defraud.
8. Tax-Evasion- Frequently used by the middle-class to have extra-unaccounted money. 9.
Adulteration- Adulteration of foods and drugs.
10. Professional crime- Crimes committed by medical practitioners, lawyers in course of their
Occupation.

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 THE WHITE COLLAR CRIME

The term “white collar crime” means different things to different disciplines, as well as to
different camps within those disciplines. Unfortunately, professionals within an environment
where there is general consensus about the term’s meaning do not always clearly specify what
they mean by the label of “white collar crime.” This can lead to confusion and (sometimes
vigorous) disagreement when they interact with larger audiences that might contain a number
of different understandings of the term. It is therefore quite important, when discussing white
collar crime, to more closely examine what different people mean by it. Generally, these
definitions tend to concentrate on: the characteristics of the offender (such as high social status)
and/or the characteristics of the crime (such as crimes occurring within the scope of one’s
employment). In the late nineteenth and early twentieth centuries, the theoretical constructs
used by sociologists to understand crime focused on it as a problem of poverty and of personal
characteristics believed to be associated with poverty (such as broken homes, mental illness,
association with criminal subcultures, and living in slum housing). One of the most influential
of those theories, Anomie Theory, is still in general use (in various forms) today, and was put
forth a year before the introduction of the concept of white collar crime.3 It holds that in a
society where members are taught to value attaining certain goals (such as wealth), but the
means to achieve those goals are unevenly distributed, those without access to the societally
prescribed means are put under considerable pressure to find other ways (including crime) to
achieve those goals. In short, the theory holds that crime is a symptom of some members of
society not having the tools to achieve what their society defines as success.

One notable aspect of Sutherland’s conception of white collar crime is that he explicitly
rejected the notion that a criminal conviction was required in order to qualify.4 Sutherland saw
four main factors at play here:
1) civil agencies often handle corporate malfeasance that could have been charged as fraud in
a criminal court,

3
Robert K. Merton, Social Structure and Anomie, 3 AM. SOCIOLOGICAL REV. 672 (1938)
4
EDWIN H. SUTHERLAND, WHITE COLLAR CRIME: THE UNCUT VERSION (1983) (the censored first
edition came out in 1949)

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2) private citizens are often more interested in receiving civil damages than seeing criminal
punishments imposed,
3) white collar criminals are disproportionately able to escape prosecution “because of the class
bias of the courts and the power of their class to influence the implementation and
administration of the law,”5 and
4) white collar prosecutions typically stop at one guilty party and ignore the many accessories
to the crime (such as when a judge is convicted of accepting bribes and the parties paying the
bribes are not prosecuted). A related concept that again focuses on the offender is
“organizational crime”—the idea that white collar crime can consist of “illegal acts of omission
or commission of an individual or a group of individuals in a legitimate formal organization in
accordance with the operative goals of the organization, which have a serious physical or
economic impact on employees, consumers or the general public.”6 While these definitions
were vital for expanding the realm of sociology and criminology, they were not as well-suited
to the needs of other criminal justice stakeholders who dealt with these issues in a more
practical sense (including policymakers, law enforcement, and the legal community). These
definitions are geared for asking why white collar crime occurs or who commits it, but they are
not as well-suited to asking questions about how much white collar crime is occurring, or
whether prevention methods are working.

Edelhertz identified four main types of white-collar offending: personal crimes (“[c]rimes by
persons operating on an individual, ad hoc basis, for personal gain in a non business context”7),
abuses of trust (“[c]rimes in the course of their occupations by those operating inside
businesses, Government, or other establishments, or in a professional capacity, in violation of
their duty of loyalty and fidelity to employer or client”8), business crimes (“[c]rimes incidental
to and in furtherance of business operations, but not the central purpose of such business
operations”), and con games (“[white-collar crime as a business, or as the central activity of
the business”).

5
Sutherland on Types of Criminals.
6
Laura Shill Schrager & James F. Short, Toward a Sociology of Organizational Crime, 25 SOCIAL
PROBLEMS 407, 411–12 (1978).
7
FED. BUREAU OF INVESTIGATION, WHITE COLLAR CRIME: A REPORT TO THE PUBLIC
8
Cynthia Barnett, The Measurement of White-Collar Crime Using Uniform Crime Reporting (UCR) Data,
FED. BUREAU OF INVESTIGATION, at 2 (2000)

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This has been operationalized by the FBI’s Criminal Justice Services Division to mean the
Uniform Crime Report (UCR) offences of fraud, forgery/counterfeiting, embezzlement, and a
rather longer list of National Incident-Based Reporting System (NIBRS) offenses. 9Thus, while
this definition and Edelhertz’s are very similar, the FBI’s definition functionally excludes non-
criminal illegal activity, as well as such incidents as are not reported to police, and such
incidents as do not fit into a relevant UCR or NIBRS category (for those jurisdictions that
participate in NIBRS). On the other hand, the FBI’s definition dovetails well with already-
collected data, making it a practical tool for generating statistics on white collar crime activity.

As a practical matter, many people have rather informal interpretations of the term. White
collar crime can refer to:
 Financial crimes
 Non-physical (or abstract) crimes
 That is, crimes that “occur” on a form, balance book, or computer
 Crime by or targeting corporations
 Crimes typically committed by the rich
 Criminal businesses or organizations
 Including, for some, organized crime and terroristic organizations
 Corporate or professional malfeasance
 For some, this can include acts that are immoral, but that are not specifically prohibited
by law (for example, an insurance company automatically targeting every policyholder
who gets diagnosed with breast cancer for an aggressive fraud investigation to find any
possible pretext to drop the account).
 Anything that is against the law that the average beat cop would not typically handle °
Essentially, everything but street crime

CAUSES OF WHITE-COLLAR CRIME

The general perception is that the white collar crimes are committed because of greed or
economic instability. But these crimes are also committed because of situational pressure or

9
Proceedings of the Academic Workshop: Definitional Dilemma: Can and Should There Be a Universal
Definition of White Collar Crime?, NATIONAL WHITE COLLAR CRIME CENTER (1996)

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the inherent characteristic of getting more than others. However, there are various reasons for
white collar crimes.
 Not really a crime: Some offenders convince themselves that the actions performed by
them are not crimes as the acts involved does not resemble street crimes.
 Not realizable: Some people justify themselves in committing crimes as they feel that
the government regulations do not understand the practical problems of competing in
the free enterprise system.
 Lack of awareness: One of the main reason of white collar crime is the lack of
awareness of people. The nature of the crime is different from the traditional crimes
and people rarely understand it though they are the worst victims of crime.
• Greed: Greed is another motivation of the commission of crime. Some people think that
others are also violating the laws and so it is not bad if they will do the same.
Necessity: Necessity is another factor of committing crimes. People commit white collar
crimes in order to satisfy their ego or support their family.

OTHER CRIMES VS. WHITE COLLAR CRIMES

White collar crime is not a new phenomenon and has been in existence from many centuries.
It can be found in all types of businesses, professions and industries. The Supreme Court of
India in State of Gujarat vs. Mohanlal Jitamalji Porwal and Anr10 has differentiated between
the general crimes and white collar crimes. In the above-mentioned judgement, Justice Thakker
had stated that murder can be committed in the heat of moment but these economic offences
are committed with a cool calculation and planned strategy to gain personal profits. The
characteristics of white collar crime enunciated herein below distinguishes it from other street
crimes. 1. Direct access to the victim because of offender’s high position: Because of his/her
position the offender has direct access to the victim. E.g. when a thief commits a theft in a
house, he first breaks the door or window and then commits the crime. Therefore, before
committing theft a thief must first gain access to the house by entering it. Whereas this is not

10
Para 4; AIR 1987 SC 1321

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 LAWS RELATING TO WHITE COLLAR CRIMES IN INDIA

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. In case of money laundering several steps
have been taken by the government of India to tackle this problem. 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.

TYPES OF WHITE COLLAR CRIMES IN INDIA

Since white- collar crimes are non-violent, it takes many other forms. Different types of white
collar crimes include: frauds, anti trust violations, tax evasion, public corruption, and many
others. We look closely at these types in the section.

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ANTI TRUST VIOLATIONS

Shevefield and Stelzer (2001, p. 1-2) defined anti trust law as a set of rules meant to preserve
the competitive process and to ensure that the commodities needed by the consumers are
available at their satisfaction. It basically protects the competitive integrity of the market. It
limits the decision making and intervention of the government within free trade. Hence, it is
also called as “Magna Carta of free enterprise.” It limits any trust relationships and presence
of monopolies in any commodity present for free trading.11

Anti trust law protects the free market against trusts and monopolies. Trust is a right to acquire
a property under fiduciary relationship with another party who takes the benefit of the property.
On the other hand, monopoly is an economic condition wherein an entity shall have
commercial advantage to set prices, even high prices, and to set the standard quality of a certain
service or commodity as well. Anti trust law guard the economy against these anti competitive
practices which let an entity for price control and promote diminishing initiative because of the
absence of the threat of competitors. This can stagnate and even cause depression of growth of
the industry or may hinder the entire economic growth (Cornell University, 2010).

Anti trust law originated from the US via the enactment of Sherman Anti trust Act in 1890. It
aimed to protect the free market from anti competitive practices which reduce market
domination. Competition has been the basic rule of free trade since then. This has been the
basis of other anti trust laws in different trading regions and nations. Later on, international
anti trust law was also patterned to this premise (Cornell University, 2010).

According to Shevfield and Stelzer (2001, p. 114), anti trust law became an international
concern because of the following scenarios:

1) globalization of major businesses going beyond national boundaries,

2) realization that competition can contribute significantly to wealth of the nations, and

11
David T. Johnson & Richard A. Leo, The Yale White-Collar Crime Project: a Review and Critique, THE
AMERICAN BAR FOUNDATION 63, 65 (1993).

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3) continuous deregulation of the natural monopolies including gasoline companies,
telecommunications, electricity suppliers, and others.

Since, US has the most detailed streamline anti trust enforcement, it led the international trade
against anti trust violators. From its institution in 1996, violators have been sanctioned and
competition has been more or less ensured. According to American Bar Association (2009, p.
56), since 1997 up to 2007, the international antitrust division acquired more than $4billion
from individual criminal anti trust fines while for corporate violators, hundred million dollars.12

Profit- diminishing sanctions for anti-trust violations can be classified as criminal fine and
private treble damage suit. Criminal fine is the most frequently imposed. This deprives the
violators with some amount of the illegally gained profit. According to Sherman Act, the
maximum criminal fine for individual violators is $ 1 million dollars and for corporate
violators, a maximum of $100 million. Under its provision, the fines may be twice as high as
the illegal profit gained or lost by the damaged party (Geis, 2009).

Frauds

Fraud is one of the most common types of white collar crime. It works by plotting
misinterpretation and deception to secure financial or information gain though illegal means.
It usually takes place when an individual pays for a good or service but does not receive what
he has paid for. Unlike petty robbery, fraud for financial gain by initiating a transaction to its
victims, promising material gain, gets the money and then gets lost. It is very common that in
a survey conducted, 36 % of US households have been victims of fraudulent transactions
(Shover and Hocksletler, 2006).

Fraud is a general term. It has many specific forms. In this paper, we focus on computer and
Internet fraud, bankruptcy and financial fraud, and healthcare and insurance fraud.

12
David T. Johnson & Richard A. Leo, The Yale White-Collar Crime Project: a Review and Critique, THE
AMERICAN BAR FOUNDATION 63, 65 (1993).

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Computer and Internet Fraud

Computer and Internet fraud is defined as the unauthorized access of computer and Internet
facilities. It is to create intentional avenues for misinterpretation of facts to initiate loss. These
can be done through the following methods:

1) change computer input in an arbitrary authorized methods,

2) change or even delete stored data, and

3) rewrite software codes to completely access information. Some of its common form is
hacking via using sophisticated tools to access computer or Internet accounts or the theft of
password, credit card information to give authorization of use, and even identity (Cornell
University, 2010). Particularly vulnerable to this fraud are bank users’ information that will be
used for credit card cramming. Violators can use the information to create fake credit cards,
along with the real password and identification number.13

Another type of Internet fraud that the author wants to add is the intentional distribution of
dangerous computer viruses. These computer viruses are also misinterpreted as useful
programs which may also be considered a fraud and can even destroy software systems and
even the hardware facilities.

Bernnett, et al. (2007, p. 485), according to The Computer Crime Research Center, the
following are the top 10 computer and Internet fraud in descending order: healthcare fraud,
solicitation fraud, vacation scams, investment scam schemes, business and work at home
scams, pyramiding scams, information hacking (credit card cramming), Internet website design
scams, ISP scams, and Internet auction frauds. These fraudulent deals over the Internet have
caused millions of damage and thousands of victims.

Sanctions for computer aided frauds ranges from three times maximum of imprisonment and
two times maximum fine. Nevertheless, the rapid boom of Internet during the 20th century
posed serious problem in a worldwide scope. While there are efforts to enforce law over the
cyberspace such as: No Electric Theft Act, Fraud and Related Activity in Related Activity in

13
Richard M. Titus, Fred Heinzelmann & John M. Boyle, Victimization of persons by fraud, 41 CRIME &
DELINQUENCY, 1, 54 (1995).

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Connection with Computers, Wire Fraud, and other codes of law (Cornell University, 2010),
the huge and rather overwhelming size of the cyberspace is one main problem. Hence, there is
a need to restructure this virtual world or if it is impossible to do at the present time, it is up to
the people to use common sense or be critical to recognize fraudulent deals over the Internet
and report them to authorities. Search engines such as the mighty Google and Yahoo! cannot
sort out fraud and fake deals for us. We need to be smart for us not to be consumed by these
technologies.

Bankruptcy Fraud

Bankruptcy fraud takes three major forms. The first one occurs when debtors are concealing
assets to avoid forfeiting. This accounts for more than 70% of all bankruptcy fraud cases.
Failure to liquidate and reveal certain assets can allow debtors to keep their assets in spite of
having outstanding debt. Second, individual debtors file incorrect or incomplete forms. These
can also conceal some significant information about properties subject for liquidation. Third is
the multiple record filing. Debtors filing multiple false or correct documents can cause delays
and hinders forfeit of their properties. Lastly, bribery of court-appointed trustee is also a
prevalent case. Debtors may opt to pay huge amount of money than to lose their properties
(Cornell University, 2010).

Bankruptcy fraud is often used to facilitate other white collar crimes such as money laundering,
mortgage fraud, public corruption, and even identity theft (Cornell University).Bankruptcy
fraud has criminal charges. A violator can be sentenced with up to five years imprisonment
or/and a fine of $250,000. However, most of such cases diminish within the lenient bankruptcy
law processes. Hence, there is a need to make the enforcement of the law much harder
(Wichouski, 2007).

Tax Evasion and Money Laundering

Tax evasion is basically non compliance of tax- paying policies or avoiding payment by illegal
means. Some of the schemes include an individual or corporation intentionally
misrepresenting details of income with the motive to pay lower that they are supposed to
pay. Intentional misrepresentation of income occurs via underreporting, inflating deductions,

16
and even hiding amounts of money along with interest and other sources of income (Cornell
University).

Friedrichs (2009, p. 121) argues that tax evasion should not be limited to individual or
occupational white collar crime. Other sources of income outside occupation such as
investments and other properties can also be subjects of tax evasion. Moreover, failure to
comply with tax laws is not only limited to non payment. Some other violations include failure
to file and report income, false income claims and deductions, and other neglect of the tax
paying processes. Low compliance to tax laws is a major problem in most countries. A
significant amount of the nation’s income is lost due to non-payment and tax evasion. Many
countries continue to devise methods to detect tax evasion, make the payment process more
convenient and other means so as to encourage their citizens to pay their respective taxes.

In many countries, tax evasion is a crime that is subjected to serious criminal cases. Tax evaders
are sentenced with huge fines or imprisonment or both. In the United States for example, a tax
evader is amounted of not more than $100,000 or over $500,000 for corporate attempts and/or
imprisonment of not more than 5 years. In a likely condition, this includes all the sanctions of
the prosecution such as forfeit of the ownership of properties (Cornell University, 2010).

Money laundering refers to any transaction comprising of financial scheme with the motive of
concealing the identity, source, and destination of an illegally sum of money. A money
laundering can be observed within three exclusive stages:

1) the illegal activity of getting the sum of money such as bankruptcy fraud or bribery,

2) the launderer keeps the money via a complex scheme of bank transactions or any other
method to give the money to the criminal partner in the transaction and,

3) the partner return the money to the launderer in obscure way (Cornell University, 2010). In
some cases, the partner in the transaction is the same person as the true launder. False identities
are used to secure the money in a bank account.

In the absence of trusted partners, launderers opt using offshore accounts in overseas banks to
hide their ill gotten money to achieve greater privacy brought about by less regulation, and
even reduced taxation. Because any country has no authority to require foreign banks to report
the interest earned by their citizen from foreign bank accounts, the money launderer keeps the

17
account abroad along with his money without being noticed by his or her country (Cornell
University, 2010).

Becker (2005, p. 427) described money laundering as a scheme on how to legitimate a

previously illegitimate income. He stated that money laundering are frequently products of
income from illegal drugs. Along with the increase of prevalence of illegal drugs, occurrence
of money laundering increased too.

The International Monetary Fund acknowledges that money laundering is a threat to financial
integrity and social stability. Presence of money from drug trafficking and money laundering
accounts for 2 to 5 % of global domestic income. Hence, to improve the processes of combating
money laundering, many nations have participated to modify bank secrecy laws and to
strengthen law enforcement efforts (Cortright et al., 2002).

Public Corruption, Bribery, and Embezzlement

Public corruption involves an infringement of public trust and/or abuse of office by government
officials together with private sector counterparts (Cornell University, 2010). It is a crime of
official misconduct with the known corrupt behavior of an official in the course of exercising
his or her duty (Lippman, 2000). Some of the types of this misconduct include embezzlement,
misappropriation or diversion of properties and obstruction of justice. There are different view
regarding public graft and corruption and it is only in the recent years that countries aim to
come up with international standards of what will be included as public corruption. This
standardization aims to include specific offences and not only generic definition and offense
of corruption (OECD, 2008).

In many countries, especially in the third world countries, public corruption is a major problem.
It accounts for significant losses of public funds. Sectors that are particularly vulnerable are
the less represented ones such as the agriculture and fisheries sector, the youth and education,
the senior citizens and veterans and other minority groups.14

On other hand, bribery is the offering, giving, soliciting, or receiving of any token of value
used to influence the actions of an official holding a public office or legal duty. Bribery of any

14
Richard M. Titus, Fred Heinzelmann & John M. Boyle, Victimization of persons by fraud, 41 CRIME &
DELINQUENCY, 1, 54 (1995).

18
kind is objectively handled in best suiting of the private interests with regard to the maker of
the decision .

15
LEGAL FRAMEWORK

The legal framework in India is not so comprehensive to deal with the issue of white collar
crime. There are no strict laws which can punish the offender as most of the offenders get away
because of the lack of evidence. The other difficulty is that the members of the legislature who
have been given the responsibility to make and implement rules are themselves indulged in
these heinous crimes. The main reasons for which these white collar criminals or occupational
criminals go unpunished are because:

i) the law makers of the country are from the same social group;
ii) ii) the effort made by the police against these criminals is highly low;
iii) iii) of easy bail and mild sentences; and
iv) iv) the impact of white collar crimes is not on a specific individual thus it creates a
casual attitude of the society towards white collar crimes.

The delayed justice which is administered by our judiciary is also one of the reasons of
rise in white collar crimes. Since white collar crimes are on a rise, it is highly important for
the judiciary and the police to distinguish between white collar crimes and traditional
crimes.

MEASURES

White collar crime has not been defined anywhere in any act or codes, however, there are
various legislations which touch the scope of white collar crime. These legislations include The
Foreign Exchange Management Act, Companies Act, Prevention of Money Laundering Act
and Import and Export Control Act. In the present scenario, our top law enforcement agencies

15
Sutherland, E. H. (1940). White-collar criminality. American Sociological Review, 5, 1–12.

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such as Central Bureau of Investigation, the Enforcement Directorate, The Income-tax
Department, The Directorate of Revenue Intelligence and the Customs Department, needs to
be strengthened. Top ranking officials should be regularly scrutinized by the bodies such as
Central Vigilance Commission. If these agencies are strengthened, then only the problem of
white collar criminality can be controlled. It is the responsibility of the government to provide
enough powers to the law enforcement agencies because without the help of these agencies the
corruption and other economic offences cannot be eradicated from our country. The law
enforcement officials should be provided training. This training will not only help in tracking
such crimes but will also make them differentiate white collar crimes from other crimes. Strict
laws should be made to curb these types of crimes. It is seen that if found guilty the white collar
criminals get away with petty fines or mild sentences. The approach used by the judiciary while
punishing these criminals has failed to curb the threat of white collar criminality. Thus, Fast
track courts/ tribunals should be arranged by appointing more Judges. The tribunals should be
given power to impose fine and award sentence of anyone if found guilty for the said offence.

Finally, the government should take initiative to spread awareness about white collar crimes
through electronic and print media. The public should have the knowledge about white collar
crimes and how they are different from other crimes.

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 CONCLUSION

White collar crimes are a big global concern and is increasing at an alarming rate. Various
studies have proved that the financial loss to the society from white collar crime is much more
than the other crimes. India is a developing country and white collar crimes are not only a
detriment to the economic growth of the country but also spoils the image of our country. It
can be easily understood that to eliminate white collar crime is not easy at all because it has
been into existence from many centuries, however, we along with government and legal entities
should try to reduce such crimes.

Opportunities to engage in fraud have also been expanded by the growth in programs associated
with the welfare state, including Social Security, Medicare, and Medicaid, as well as a host of
other less well-known programs such as the Federal Crop Insurance Program. All of these
programs distribute enormous amounts of money to literally millions of applicants annually.
They all depend on written materials and all are open to the possibility of fraudulent
applications.

In effect, principals often do not know whether agents really are doing the right thing for them.
Second, agents have their own financial interests that may conflict with those of the principals
whom they are supposed to be serving. Taken together, these two features of trust relationships
mean that agents often have the motivation and means to take advantage of others.

Many, if not all, of the social and economic developments outlined above have been made
possible as a result of technological changes. The effects of the emergence of the personal
computer, network servers, and the Internet as the standard means of information storage,
manipulation, and communication can hardly be overstated. Money and information flow faster
now than ever before. More and more transactions take place anonymously rather than through
face-to-face contact. In this environment, opportunities to engage in fraud and deception
abound, and white-collar crime flourishes.

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