White-Collar Crime is a nonviolent crime that is frequently characterised by deception or concealment in order to obtain or prevent losing money or property, or to gain a competitive advantage for oneself or a company.
Overview
White-Collar Crime is a nonviolent crime that is frequently characterised by deception in order to obtain losing money or property or to gain a competitive advantage for oneself or a company.
Securities fraud, embezzlement, corporate fraud, and money laundering are a few examples of white collar crimes. The Securities and Exchange Commission (SEC), the National Association of Securities Dealers (NASD), the Federal Bureau of Investigation (FBI), and state authorities are among the organizations that look into white-collar crime.
Understanding White-Collar Crimes
A crime committed by a person of high social standing while working was first referred to as “white-collar crime” by sociologist Edwin Sutherland in 1949. White-collar workers held non-laboring office positions, while blue-collar workers typically wore blue shirts and worked in factories, plants, and mills.
Well-known individuals who have been convicted of white-collar crimes have participated in insider trading, accounting fraud, securities fraud, and Ponzi schemes.
Among the many new white collar crimes made possible by the internet are so-called Nigerian scams, in which phoney emails request assistance in forwarding a sizeable sum of money to a criminal ring. Insurance fraud and identity theft are two other common white-collar crimes.
Types of White-Collar Crime
The term “white-collar crime” refers to a broad range of crimes, including the following:
1. Fraud
Fraud is a blanket phrase that covers a wide range of techniques used to defraud people of their money. The offer to transfer someone a large number of money (like ₹10,000 lakhs) in exchange for a small sum of money (like ₹3,000), which the con artist may pass off as a processing or finder’s fee, is one of the most common and basic scams. Naturally, the con artist gets the money transferred to him, but he never gives out the money he promised.
2. Insider Trading
Insider trading is the practice of trading while having access to important, confidential information that gives the trader an advantage in the financial markets. An employee of an investment bank, for instance, might be aware that Company A is preparing to acquire Company B. The employee can put money into Company B with the anticipation that once the purchase is made public, the company’s stock price will jump sharply.
3. Ponzi Scheme
After Charles Ponzi, the first perpetrator of such a scam, a Ponzi advert is a financial fraud that makes unusually high returns to investors. It pays such rewards to the initial investors using the newly deposited funds of new investors.
When the con artist is unable to bring in enough new clients to pay off the old ones, the scheme falls apart like a house of cards, leaving many investors with large losses.
4. Identity Theft and Other Cybercrimes
India’s worrying 63.5% surge in cybercrime cases in 2019 indicates that the nation has become a prime target for these crooks. 60.4% of all reported cybercrime cases involved fraud. Due to the pandemic, the majority of Indian businesses saw a surge in cyberthreats or alerts of more than 25% during the transition to working from home.
5. Embezzlement
Embezzlement, sometimes known as larceny, is a type of theft that can take many different forms, from an employee taking a few dollars from the cash register to a complex strategy to move millions from the company’s accounts to the embezzler’s accounts.
6. Counterfeiting
The issue of product counterfeiting is well-known and has existed for a very long time. Ancient times saw the use of trademarks, and when there are trademarks, counterfeiting quickly follows. In recent times, the issue has received increased attention. Finding out the extent of the market for counterfeit goods would seem to be the reasonable first step.
However, determining the size of this illegal commerce is a challenging undertaking. First, since counterfeit trade is by definition unlawful, no direct measurement of it can be done. It is impossible to draw any inferences from these numbers because customs seizures make up such a small portion of total trade.
7. Money laundering
Criminals require a service like money laundering when working with significant sums of cash. It comprises moving the funds through several accounts before finally depositing them into genuine businesses, where they are combined with the legitimate revenues and lose their initial capacity to be linked to illicit activities.
8. Espionage
It is possible to say that the espionage system in ancient India was a vast network that permeated practically all administrative divisions. Through this network, the monarchs attempted to gather information, and by acting on that knowledge, efficient and successful rule was maintained.
The government used double agents, counterspies, and spies. In the past, they were actively gathering intelligence around the empire. Then this intelligence was translated. To prevent them from knowing one another, the interpreters and intelligence gatherers were kept apart.
Classifying White-Collar Crime
It is common to divide white-collar crime into two broad, generic categories:
1. Individual Crimes
Individual financial crimes are those that are perpetrated by one person or a single person and a group of people. A specific type of white-collar crime is a Ponzi scheme, such as the one perpetrated by Bernie Madoff. Additional specific crimes that fall under this umbrella include identity theft, phishing, counterfeiting, and any of the numerous other sorts of fraud schemes.
2. Corporate Crimes
Some white-collar crimes happen on a business level. An illustration would be a brokerage firm permitting members of its trading desk to engage in insider trading. Money laundering can also occur in corporate settings.
Reasons for the Growth of White Collar Crimes in India
The main causes of the rise in white-collar crimes in India are greed, rivalry, and the absence of adequate laws to stop such crimes.
Greed
Machiavelli, who is regarded as the founder of modern political philosophy, was adamant that people are greedy by nature. He claimed that a man can forget his father’s passing more quickly and easily than the loss of his inheritance. The same is true when White-Collar Crimes are committed.
Effect of Easy, Prolong and Swift
The pressures of business, politics, and rapidly expanding technology have given criminals access to newer methods of committing white-collar crimes. A person can now be harmed or lose something faster and easier thanks to technology.
Competition
After reading Charles Darwin’s “On the Origin of Species,” Herbert Spencer coined the expression “survival of the fittest” to describe how evolution works. This suggests that there will always be competition among the species, and the best survivor will be the one who can best adapt to the environment.
Lack of Stringent Laws
Laws appear reluctant to pursue these cases as investigating and tracking these crimes becomes a challenging and complicated task given that the majority of these crimes are made possible by the internet and digital methods of transfer payments.
Modern Technology
One of the expectations of modern technology is the ease of doing business. In a sense, this expectation also applies to white-collar crimes, which has made it possible for them to reach out to more people and commit large-scale crimes without drawing the attention of the law.
Conclusion
A non-violent crime with a financial motivation is called “white-collar crime.” White-collar offenses can be committed by an individual or an organization. But with the sophisticated technology that is now accessible, even white-collar crimes committed by a single person may cost the victims tens of millions of dollars. Edwin Sutherland, a sociologist, and criminologist coined the term “white-collar crime” in 1939. Many people refused to accept that members of the “upper class” engaged in these practices before his writings on the subject. Vakilsearch provides knowledge regarding the scrutiny of white-collar jobs and also provides assistance of the same.
Frequently Asked Questions
Is corruption a white collar crime in India?
Yes, corruption is often classified as a white-collar crime in India. It involves abuse of power or influence for personal gain, typically without direct physical force.
What is an example of a white collar crime?
A common example is financial fraud, where individuals manipulate financial systems, misrepresent information, or engage in embezzlements to gain unlawful financial benefits.
What is blue collar crime in India?
Blue-collar crime, on the other hand, refers to crimes typically committed by individuals from lower socioeconomic backgrounds, often involving physical force.
What are the biggest white-collar crimes?
Notable white-collar crimes include Ponzi schemes, insider trading, tax evasion, and cybercrimes like hacking and identity theft.
Who investigates white-collar crime in India?
Various agencies like the Central Bureau of Investigation (CBI), Enforcement Directorate (ED), and Serious Fraud Investigation Office (SFIO) are responsible for investigating white-collar crimes in India.
What is green-collar crime in India?
Green-collar crime pertains to offences against the environment, such as illegal dumping, wildlife trafficking, and environmental fraud.
What is a GREY collar crime?
Grey-collar crime refers to offenses that fall between white-collar and blue-collar crimes. These crimes may involve individuals with technical expertise or specialised knowledge who exploit their positions for financial gain, often in a non-violent manner.
What are white-collar crimes?
White-collar crimes are non-violent, financially motivated offenses typically committed by individuals, businesses, or government professionals in positions of trust and authority. These crimes often involve deceit, fraud, or manipulation for financial gain.
What is white-collar crime from an Indian perspective?
In an Indian context, white-collar crime refers to financially motivated offenses committed by individuals in positions of authority or trust, often involving fraud, corruption, or financial manipulation. These crimes impact the economic fabric and undermine financial integrity.
What is the landmark case of white-collar crime in India?
A landmark white-collar crime case in India is the Harshad Mehta securities scam of the 1990s. Mehta manipulated stock prices, leading to significant financial irregularities in the Indian stock market.
What are four white-collar crimes?
Four common white-collar crimes include embezzlement, insider trading, money laundering, and securities fraud. These offenses are characterised by financial deception, manipulation, and misuse of positions of trust.
Who mostly commits white-collar crime?
White-collar crimes are predominantly committed by individuals in positions of authority or trust, such as corporate executives, government officials, or professionals with access to financial systems.
Why is it called white-collar crime?
The term 'white-collar crime' originated from the traditional attire worn by professionals and office workers, which typically included white shirts. These crimes contrasted with 'blue-collar' crimes associated with manual labourers.
How can we stop white-collar crime in India?
Preventing white-collar crime in India involves strengthening regulatory frameworks, promoting ethical business practices, enhancing corporate governance, and fostering a culture of transparency. Rigorous law enforcement and effective judicial processes are also essential.
What is white-collar crime in India abstract?
In the Indian context, the abstract of white-collar crime involves financially motivated offenses committed by individuals in positions of trust or authority, impacting the country's economic stability. These crimes often include fraud, corruption, and financial manipulation.
Who introduced white-collar crime?
The term 'white-collar crime' was introduced by sociologist Edwin Sutherland in 1939. Sutherland defined these crimes as offenses committed by individuals of high social status and respectability in the course of their occupations.
Is there a mens rea in white-collar crime in India?
Yes, mens rea (guilty mind) is a crucial element in white-collar crimes in India. Intent to commit fraudulent or deceptive acts is often required to establish criminal liability in cases involving financial offenses.
What is cyber crime India?
Cybercrime in India refers to offenses committed in the digital realm, including hacking, online fraud, identity theft, and cyberbullying. The Information Technology Act, 2000, addresses various aspects of cybercrime and prescribes penalties for offenders.
