What is white-collar crime?
White-collar crime or corporate crime refers to financially motivated, non-violent crime committed by businesses and government professionals. It was first defined by the sociologist Edwin Sutherland in 1939 as a “crime committed by a person of respectability and high social status in the course of their occupation.” White-collar crime includes wage theft, fraud, bribery, Ponzi schemes, insider trading, labor racketeering, embezzlement, cybercrime, copyright infringement, money laundering, identity theft and forgery.
White collar crimes are rapidly increasing in India with the advancement of commerce and technology. The recent developments in technology have given new dimensions to computer related crimes known as cyber-crimes. As such, the white-collar crimes are increasing with the development of new websites. The areas affected by these crimes are banking and financial institutions, industry, business etc. Thus, crime is an act or omission which constitutes an offence and is punishable under the law. As the white-collar crimes are increasing on daily basis, it injures the society on a large scale because the laws are not properly administered and therefore there is a need to curb the factors that are helping in the commission of such crimes.
Elements of a white collar crime.
In order to prove that a white-collar crime was committed, the prosecution must prove the following four elements:
- Intent: the defendant must intentionally commit an unlawful, wrongful act
- Disguise and concealment: The defendant hides or conceals their criminal activity to avoid getting caught
- Knowledge: the defendant must have known that they committed the crime
- Reliance: the plaintiff or victim relied on the defendant’s fraudulent act or scheme
Who is a white-collar worker?
A white-collar worker is a person who performs professional, managerial or administrative work. White-collar work may be performed in an office or other administrative setting. White-collar includes business management, customer support, market research, finance, engineering, operations research, marketing, information technology, networking, attorneys, medical professional, public relation, talent professionals, architects, graphic design, stockbrokers, accounting, auditor, actuary, customs professional, research and development and contracting. The term refers to the white dress shirts of male office workers common through most of the nineteenth and twentieth century in western countries. The term “white collar” is credited to Upton Sinclair, an American writer, in relation to contemporary clerical, administrative, and management workers during the 1930s.
Types of white-collar crimes:
- Bank fraud: refers to engage in such activities in order to fraud a bank or using illegal means to obtain assets held by the financial institutions
- Bribery: offering money, goods or any gift to someone in order to have control over his actions. It is a crime if someone accepts or offers a bribe
- Blackmail: demand for money by threatening some person to cause physical injury or exposing his secrets
- Computer fraud: those frauds which involve hacking or stealing information of some other person
- Embezzlement: when someone entrusted with money or property uses it for his own use, it is embezzlement
- Extortion: when a person illegally obtains someone’s property by actual or threatened force
- Insider-trading: when someone uses the confidential information to trade in shares of publicly held corporations
- Money-laundering: concealment of origin of illegally obtained money
- Tax fraud: evading tax by providing wrong information in tax forms or illegally transferring property in order to avoid tax.
Laws relating to white-collar crimes:
The government of India has introduced various regulatory legislations, the breach of which will amount to white-collar criminality.
- Companies Act, 1960, Income Tax Act, 1961, Indian Penal Code, 1860, Commodities Act, 1955, Prevention of corruption Act, 1988, Negotiable instrument Act, 1881, Prevention of money laundering act, 2002, Information Technology Act,2005, Imports and Exports (control) Act,1950, etc.
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 several offences such as 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.
There are several measures to deal with white-collar crimes. Some of them are, creating public awareness of crimes through media or press and other audio-visual aids and legal literacy programmes. Special tribunals should be constituted with power to sentence the offenders for at least 5 years and conviction should result in heavy fines rather than arrest and detention of criminals. Unless the people will strongly detest such crimes, it is not possible to control this growing menace. White-collar crimes are the crimes which cause harm to the economy of the country as a whole. It threatens the country’s economy by bank frauds, economic thefts, evasion of tax, etc. It not only affects the financial status of a country or a person but it has also a negative impact on the society. The various crimes such as bribery, corruption, money laundering has affected society in a negative way.