White collar crimes
“The practitioners of evil, hoarders, the profiteers, the black marketeers, and speculators are
the worst enemy of our society. They have to be dealt with sternly. However well placed
important and influential they maybe, if we acquiesce in wrongdoing, people will lose faith in
us.”
- [Link]
It was in 1939 when for the first time Edwin Sutherland, an American sociologist, defined
white collar crimes. He described it to be crimes committed by a person of high social status
and respectability who commits such crimes during the course of their occupation.
The five attributes of the given definition are:
It is a crime.
That is committed by an important person of the company.
Who enjoys a high social status in the company.
And has committed it in the course of his profession or occupation.
There may be a violation of trust.
These crimes are quite rampant in third world countries due to the economy, for instance,
the ease of doing business has taken a jump of almost 37 positions in the last two years
(2018-2020) in India which allows more investment and businesses to flow into the country
but exposes consumers and their rights and this has led to the rapid increase of cases over
80% just in 2019. Edwin Sutherland stated that white crime could harm society more than
other normal offences mainly because of the financial losses that the public would incur in
fact, white-collar crimes can be traced back to the 15th century in the UK and later also in
the US during the civil war which allowed large monopolies to take over which led to the
enforcement of Anti-trust laws to protect the consumers and allow fair competition. With the
world moving at a fast pace and the rate of development in technology and commerce it’s
fair to say that India is unable to deal with the increasing level of unprecedented growth
which is leading to white-collar crimes such as cybercrimes. This also means that crime can
be committed across any country’s border. Due to the ease of committing these crimes,
fraudsters have also become greedier and has also resulted in the lower average age of
these fraudsters and due to their ease of accessing and optimising technology the number of
white-collar crimes is increasing and it also points out that the future of our country is turning
towards the dark side. Related to the corporate sector, white collar crimes are defined as
non-violent crimes, generally committed by businessmen and government professionals.
In simple words, crimes committed by people who acquire important positions in a company
are called white collar crimes.
White collar crime in India
Corruption, fraud and bribery are some of the most common white-collar crimes not only in
India but across the world.
The Business Standard dated November 22, 2016 published a report titled "Changing
Dynamics of White-collar Crime in India" in which it stated that the Central Bureau of
Investigation (CBI) has identified a total of 6,533 cases of corruption in the last decade.
In the last two years, 517 cases were registered.
According to statistics, 4,000 cruise trade is being conducted using false or double -pan
cards.
Maharastra indicates that the number of cases on the Internet is increasing rapidly, but 999
cases are recorded. The report also said cash card details were stolen from YES Bank
ATMs managed by Hitachi Payment Services, causing losses to around 3.2 million people.
Technological and commercial advancements have led to an unparalleled surge in
cybercrime, a subset of white collar crime. Because the chance of being discovered or
caught is so low, cybercrimes are on the rise. Over time, India's standing has improved on
Transparency International's Corruption Perception Index (CPI).
India was ranked 85th in 2014, but because to various efforts to combat white collar crime, it
rose to 76th place in 2015. India ranked 78th out of 180 countries in 2018, up three spots
from the previous year, according to a research published in The Economic Times.
India is a growing nation, and along with poverty, white collar crimes are increasingly
contributing to the country's underdevelopment.
Reasons for the growth of white collar crimes
in India
Greed, competition and lack of proper laws to prevent these crimes are
the main reasons for the growth of white collar crimes in India.
Greed
The father of modern political philosophy, Machiavelli, firmly believed that men
are inherently greedy.
He said people tend to forget the death of their father more quickly and easily than they
forget the loss of an [Link] same is true for white-collar crime. Why would
someone of high social status, importance and enjoying financial security commit such a
crime, if not out of greed?
Simple, quick, and long-lasting effects
White collar crime is being committed in new and inventive ways by criminals because to the
rapid advancements in technology, business, and political pressure. Additionally, technology
has sped up and simplified the process of harming or losing something to another person. It
would also take longer for the victim to recover from such crimes because they are far more
expensive than other crimes like murder, robbery, or burglary. This would reduce the level of
competitiveness.
Competition
Herbert Spencer after reading ‘On the Origin of Species’ by Darwin, coined a phrase
that evolution means ‘survival of the fittest’. This implies that there will always be a
competition between the species, and the best person to adapt himself to the
circumstances and conditions should survive.
Lack of stringent laws
Since most of these crimes are facilitated by the internet and digital methods of transfer
payments, laws seem reluctant to pursue these cases as investigating and tracking becomes
a difficult and complicated job. Why it becomes difficult to track it is because they are usually
committed in the privacy of a home or office thereby providing no eyewitness for it.
Modern technology
Ease of business is one of the expectations of modern technology; in a way, this also applies
to white-collar crimes, which have made it possible for them to reach a wider audience and
carry out significant crimes without drawing the attention of the authorities. Numerous people
have fallen prey to various scams, like the credit card scam. In addition, the pandemic
created a new market for them by taking advantage of the medical industry and establishing
a black market for Covid medications like "Remdesivir." More than a hundred cases were
filed against the illegal use and sales of this medication, with doctors and hospital staff being
implicated in the majority of them. People's desperation and greed have led them to the
point where they willfully take advantage of any possible field. It doesn’t stop there the
development in technology is so rapid that people can acquire nuclear weapons with a click
of a button, this was the case in Mumbai when authorise seized two people acquiring 7kgs of
natural uranium which is highly radioactive and dangerous to human life. This makes us
question the level of threat that these cartels and organizations impose on the nation and the
level of sophistication these crimes have reached for the personal gains of their lives.
Lack of awareness
White collar crimes are not the same as traditional crimes in nature. The majority of people
are the worst victims of crime because they are ignorant of this and do not comprehend it.
Due to the fact that most crimes involve large corporations and there may be little to no
evidence to actually produce a criminal, victims of these crimes often are unable to
understand the concept of the crime, the specific offense that has been committed, and
whom to approach or file a complaint against. In some cases, such as scams and fraud,
victims may not even be aware that they have been the victim of a crime, such as bank
fraud, of which over a thousand cases are reported annually. Additionally a victim of a scam,
like the double-dip scam, could become the victim again because the scammer keeps their
information on file and gives it to another one. A wider audience is needed, and government
awareness campaigns may help people understand the seriousness of these crimes and the
loopholes these criminals use, potentially lowering the rate of white-collar crimes in the
future. These cases are increasing, particularly in metropolitan areas, but we are not aware
that we could become victims of such crimes.
Competition
We live in a fast pace world where only the fittest can survive and it has grown to such an
extent that crimes are committed for survival especially belonging to the lower socio-
economic classes their work environment is poorly designed and they are often underpaid so
in order to earn more and make a decent living their moral and ethnic values may be
compromised and just to move out of poverty or to make more gains their behaviour cannot
rationalised and is often out of greed that they have no limits. Criminal organizations and
cartels are also multiplying and advancing in their methods due to this competition
necessity
. White collar crime is also committed by people in order to support their families and
themselves. However, feeding one's ego is the most crucial thing that people in high social
position desire.
The following are the reasons why white collar offenders escape punishment:
The same class of persons that these professional criminals belong to also includes
legislators and those who carry out laws.
Because they find the inquiry to be difficult and draining, the police put in less effort, and
these perplexing searches frequently yield unsatisfactory outcomes.
The way laws are written, only professional criminals benefit from them. White collar crime is
also committed by people in order to support their families and themselves. However,
feeding one's ego is the most crucial thing that people in high social position desire.
The following are the reasons why white collar offenders escape punishment:
The same class of persons that these professional criminals belong to also includes
legislators and those who carry out laws.
Because they find the inquiry to be difficult and draining, the police put in less effort, and
these perplexing searches frequently yield unsatisfactory outcomes.
The way laws are written, only professional criminals benefit from them.
The judiciary has always faced criticism for rendering decisions slowly. Occasionally, the
accused has passed away by the time the court renders the verdict. This makes criminals
loose in commiting crimes . While white collar crimes are increasing at a faster rate, the
judiciary must increase its pace of delivering judgements.
Chronological background
Often referred to as the "Carrier's case," it was the first instance of white collar crime to be
recorded in England in 1473. In this instance, the agent was given the authority to carry out
the principal's duty of moving wool between locations. A portion of this wool was found to
have been stolen by the agent. Following this decision, the English Court established the
theory of "breaking the bulk," which states that the person granted custody of the goods
attempted to open it and take anything of its contents.
But the rise of industrial capitalism has raised the bar for criminality. The bourgeois
establishment indulges in such criminal activity out of a desire for more, both materially and
in terms of happiness. The Sherman Antitrust Act of 1890 in the United States outlawed
monopolistic behaviors. The Sherman Act was more comprehensive than other nations'
antitrust or competition legislation, as well as the punishments meted out to white collar
criminals in Great Britain.
A group of journalists elevated reform-seeking emotions in the late 18th and early 19th
centuries. By 1914, Congress was evidently working hard to fortify the principles established
by the Sherman Act. When it came to combating monopolistic illegal practices, this Act
turned out to be more strict than the Sherman Act.
criticism
Coleman and Moynihan brought up the fact that Edwin Sutherland's definition contained a
few unclear terms, such as:
No qualifications for these "persons of responsibility and status" have been outlined.
Furthermore, "person of high social status" is ambiguous. It is confusing since the legal
definition of the phrase may not align with its popular meaning.
Sutherland's definition does not account for an individual's socioeconomic status. It simply
demonstrated how different types of white collar crimes depend on the circumstances
surrounding their commission.
Mens rea, or having a guilty mentality, and actus reus, or engaging in unlawful behavior, are
two prerequisites for crimes. Sutherland's definition, however, seems to imply that mens rea
is not always necessary for white collar offenses.
Remarks from Morris. Albert Morris proposed in 1934 that individuals of high social rank
should be held accountable for the criminal offense that corresponds to the illicit activities
they engage in as part of their employment. In addition, he said that it ought to be illegal.
Once more entering the picture, Sutherland explained that crimes committed by members of
upper socioeconomic categories while they were employed would be classified as "white
collar crimes." and went on to say that "blue collar crime" will be the term used to describe
the conventional crimes.
He therefore distinguished between blue-collar crimes, or more conventional crimes like
theft, robbery, and the like, and white-collar crimes, or corruption, bribery, and fraud. After
that, the term "white collar crimes" was eventually acknowledged by criminology in 1941.
Difference between white collar crime and blue-collar crime
The phrase "blue collar crime" first used at some point in the 1920s. After then, Americans
who worked physically were referred to by this word. They frequently favored wearing darker
clothing to make stains less noticeable. A few people once wore blue collared shirts. These
were hourly workers who received a pitiful wage. White collar crime is not new to any
industry, profession, or business; it has been around for generations.
The Supreme Court of India established the distinction between "white collar crimes" and
"blue collar crimes," which are crimes of a more broad nature, in the State of Gujarat v.
Mohanlal Jitamalji Porwal and Anr[2] case. Justice Thakker clarified that an individual
canmurder another person in the heat of the moment, but causing financial loss or say
committing economic offences requires planning. It involves calculations and strategy
making in order to derive personal profits.
Here are the characteristics of white collar crimes which distinguish it from other crimes of
general nature:
Meaning
Blue-collar crimes refer to people who work physically, using their hands, whereas white
collar crimes refer to knowledgeable works, who use their knowledge to commit crimes.
New v/s Traditional
Where blue-collar crimes refer to traditional crimes that have been committed since ages,
the concept of white collar crimes has recently developed. It’s a new species of crime.
Mens rea
To constitute a crime element of mens rea and actus reus is must. Where mens rea is an
essential element of blue collar crimes, its involvement in white collar crimes is not
necessary.
Straightforward access to the objectives
Because white collar criminals are individuals holding higher positions within organizations,
they have legitimate, direct, and simple access to their objectives. In the case of blue-collar
crimes, things are different. For instance, in order to steal from Babitaji's home, Jhethalal
would need to smash down the door or create an opening. Only then could he carry out the
heist. So, before actually committing theft, Jhethalal will first have to get access to Babitaji’s
house. Whereas in white collar crimes, one can have direct access to their target making
use of one’s higher position and power.
Veiled offenders
White collar crimes do not require victim identification to be revealed in person, so the
identity of the victim is concealed. In contrast, physical harm must be done to another person
in order to commit blue collar crimes.
