ETHICS AND VALUES

WHITE COLLAR
CRIME

WHITE COLLAR CRIME

Definition:
Since its coining in 1939 by Edwin H. Sutherland, "whitecollar crime" has grown and spread through the
expanding worlds of business and technology.
A non-violent crime that is committed by someone,
typically for financial gain.
The typical white-collar criminal is an office worker,
business manager, fund manager or executive.

 White-collar crime, defined broadly by

criminology professor Gilbert Geis, involves "the
abuse of power by upper-echelon businessmen in
the service of their corporations.

Types:
Illegal Insider Trading

Example: A high-profile employee of a

corporation learns about a merger that is going
to bring in profits for the company, and buys
shares before it is made public.

Securities Fraud

Example: Fraudsters create dummy

corporations and mislead investors into buying
shares in this corporation.

 Antitrust Violations
Example: A company that makes
computers and holds a majority of the
market share, forcefully attaches a
particular product with theirs, forcing the
buyers to purchase both.

Bribery
Example: The CEO of a corporation may bribe
an employee and indulge in insider trading
through him/her.

 Environment Law Violations

Example: A company producing toxic waste may
decide to dump this waste in rivers or oceans, so
as to avoid paying for its chemical treatment.

Economic Espionage and Trade Secret

Theft
Example: A soft drink corporation unlawfully
obtains the formula for a secret ingredient of its
rival soft drink company.

Bankruptcy Fraud
Example: A man with assets worth $20,000 shows
its worth to be $10,000, and later files for
bankruptcy. This is committing a bankruptcy fraud

 Insurance Fraud
Example: A man whose house or property was
damaged in a fire claims for payment of a value
that is more than the value of the actual damaged
property.

Credit Card Fraud

Example: A person may use lost/stolen credit
cards to make purchases on the actual card
holder's name.

Internet/Computer Fraud
Example: A wrist watch belonging to a particular
brand is not available in a particular region. But
wrist watches with almost similar design (although

Likewise there are many other types of white collar

crimes exist.
As
Health Care Fraud
Investment Schemes
Money Laundering
Racketeering
Securities Fraud
Tax Evasion
Telemarketing Fraud
Welfare Fraud
Counterfeiting
Etc

 FACTORS GOVERNING THE

OCCURRENCE OF WHITECOLLAR CRIME:

The criminal may suffer from financial pressure,

or low self esteem because of social pressure.

Factors also contributing to the temptation to

commit a crime may be the lack of sufficient
sanctions provided by legislation, a lack of
enforcement thereof, or a belief that legislation is
inefficient,

When employees feel disgruntled because of

unfair treatment, such as perceived unfair

 Unfair competition in the market as a result of

corruption is a major incentive for management
to start bribing officials, etc. to gain market
share. There is discrimination against honest
companies.
Unethical behavior by management itself, or
tolerance of crime by management, may also
motivate potentially dishonest employees to use
a gap. A culture of dishonesty may soon prevail.
The disintegration of values in social
structures - starting as small as the family - has
led to a lapse of morality in general. The
boundaries between right and wrong have

 Although many offenders are genuinely needy,

many others are just greedy or crave the feeling
of power. Many offenders become hooked on
money. Richard Nixons involvement in the
Watergate scandal is an example of greed for
political power. Greg Blank, who was convicted in
1994 for the embezzlement of his clients money by
means of a complicated investment scheme,
admitted to the pleasure he felt in having power
over his clients in this way.
The FTC has significant powers and resources to
stop fraudulent practices, such as the ability to
obtain injunctions and asset freezes which enable
them to stop fraudulent conduct soon after they

Effects:
White-collar crime has been defined recently as the
use of a significant position of power for illegal gain
that results in damage or harm to victims as
measured by financial loss, physical harm, and
damage to the community's moral climate.
Most experts agree that the economic impact of
white-collar crime is far more costly than ordinary
crime.
White-collar crime can endanger employees through
unsafe working conditions, injure consumers because
of dangerous products, and cause pollution problems
for a community.

 Most research on perceived crime seriousness

suggests that the public generally ranks whitecollar violations as serious, especially
embezzlement and activities which result in death
or injury to individuals.
When a company suffers from fraud from any
source, it must make up for it by raising costs,
which ultimately means higher prices for
consumers.
It can also mean less pay for employees and even
cutting jobs.
The effect can continue to ripple when it comes to
those employees or investors who now find

White Collar Crimes in Different

Professions:

Medical Profession:

Engineering

 Legal profession

Educational Institutions

Ramalinga Raju And The

Incredible Story
Of India's Greatest White Collar
Crime
On January 7, 2009, Ramalinga Raju, Chairman
and
founder promoter of Satyam Computer Services
(SCS)
vanished. He left a confessional letter. He said he
had
falsified accounts to the tune of thousands of
crores. At
the time, SCS was an IT major. It was
headquartered in
Hyderabad and listed on the New York Stock
Exchange

The verdict was announced Ironically, Raju was

considered one of
the most honest members of India Inc. SCS had won
the
prestigious Golden Peacock award for Corporate
Governance..
Ten accused including Raju himself were convicted
under various
sections of the Indian Penal Code (IPC), such as Sec
120B (criminal
conspiracy), 409 (criminal breach of trust), 420
(cheating), 467
(forgery of valuable security), 468 (forgery for
cheating), 471(using
forged documents as genuine) and 477-A (falsification
of accounts).
Raju has been sentenced toseven years in prison.

HOW TO COMBAT THIS

UNETHICAL ISSUE ?
(A Powerful
Punch 5 Ps)

OME REMEDIES FOR WHITE COLLAR CRIM

I. Creating public awareness through the
media and press and other audio visual
aids.
II. Special tribunal should be constituted
with power to award a serious sentence.
III. Stringent regulatory laws and drastic
punishment for white collar criminals,
may help in reducing these crime.
IV. Separate chapter should be inserted in
the Indian Penal Code, 1860 relating to

CONCLUSION
The real solution to this problem is
going to have to come from the
people who are being affected by it.
They are the most likely to stop it.
They cannot let anyone take
advantage of them anymore.

THANK YOU