White Collar Crimes in India

Abstract
The prevalence of white-collar crimes in India is a major cause of violations of the law. India is
one of the most attractive targets for mergers and acquisitions (M&As), second only to China.
But it is also one of the riskiest locations for that kind of investment. One part of that risk is
white‐collar crime (WCC), which continues to grow worldwide at an incredible rate. It is a
plague that affects all countries‐and India is no exception. The last few years saw a gradual shift
in the public perception of doing business in India. According to the statistics, white-collar crime
cases are more conventional compared to crimes like robbery, arson, and extortion which tend to
be more identifiable by most individuals. However, the damage caused by white-collar crimes is
much higher than that generated by common crimes. Collective security operations and strategies
in various states have enabled groups of white-collar criminals to be more active on the
international stage. 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. This has created a nexus where people from almost
all walks of life have started forming group to do white collar crimes and being protected by
professionals in law. This article explores the emergence of white-collar crimes, different types
prevalent in India, the existing law and its development to deal with diverse kinds of these
crimes.

Keywords:, Government, White collar crime, Eradication.

Introduction

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With technological advancement, White Collar Crime is becoming a global issue, and it has
grown immensely in India due to the growth of the economy and industry. The increase in cyber-
specific white-collar crimes among others has indeed been unprecedented and unforeseen, as
well as being a significant challenge to federal agencies since these offenses can be perpetrated
by an anonymous person anywhere on the planet. Some unethical professionals engage in illegal
activities without fear of the loss of respect and prestige and ignore the ethical practice.

This study assesses the emerging trends on white-collar incidents and the respective laws and
regulations in India as well as seeks to comprehend India's conception of white-collar crime.
White-collar crimes are the acts of knowledgeable individuals drawn from a higher class of
society abusing their position. It has also been regarded as a criminal act of trained, skillful
plutocrats. The author discusses the common types of white-collar criminal acts that have
developed in India in recent years, as well as how this has developed into a cultural-economic
issue. There are also crimes involving professional occupations, such as health, academic, and
legal professionals. The study outlines different Indian statutes concerned with the penalty of
such offenses. The article completes the paper with his own recommendations.

Background
The American Sociologist Edwin Sutherland, who first described financial crimes internationally.
In comparison to those who undertake ordinary crime during everyday employment, he
explained this crime as being a matter of wealth and status to the individual. In 1934, Morris
again pointed out that the emphasis on crime needs to be changed. He emphasized on the need to
bring this crime category public and to make it punishable for any anti-social activity committed
by people of affluence in the course of their profession. Lastly E. H. Sutherland also, via his
research as a pioneer, underlined that these ' High Echelon crimes, committed by affluent
individuals during their occupation, should be called ' white-collar crime ' to be differentiated
from the ' Blue-collar crimes.

White Collar Crimes in India

Cases of White Collar Crimes are increasing in our nation as trade and innovation are
progressing. New technological advancement has brought cyber-related crimes recognized as
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digital fraud to new dimensions. With the emergence of new internet sites, the offenses of white-
collar increase. These crimes affect financial services, financial institutions, the business sector,
and the manufacturing sector.

These crimes are perpetrated by highly skilled people, like medical professionals, legal
professionals, bookkeepers, civil servants, and not by violent criminals. The forms of crime vary
from common offenses like fraud misconduct, forgery, negligence, irregularity, etc. Such crimes
have been committed with no thought and emotion by calculated and organized conspiracies. If
offenders undertake socio-economic offenses, people are more likely to accept them since they
benefit and sometimes associate with the perpetrators. Initially, white-collar crimes were
intended to classify middle-class and high-class businessmen who infringed the law during their
regular jobs. However, it refers to a wide range of workplace abuses by citizens of any rank
.Usually the entire society or the whole country are the targets of economic crime besides the
citizens. Such acts do not contain or carry any shame whereas common offenses create an
impression of embarrassment and perversion. Such attacks establish a new class since the
regulation over these offenses requires maintaining and sustaining the general economic and
environmental structure of civilization from corruption and misuse.

Indian Scenario

Some big business criminal acts have been uncovered recently. Some of the most significant
mishaps discussed today are the disappearance of shadowy companies. 2750 of the 5,651
Bombay Stock Businesses have disappeared mysteriously. It implies for every 2 firms that enter
the bourse to collect capital; one runs away with money raised from the shareholders. Also, large
brands such as ' Home Trade ' had massive publicity but disappeared into thin air after they were
laundering millions of dollars. In these 2750 firms, nearly 11 million shareholders have spent Rs
10,000 crore. We have the Indians ' Securities Exchange Board, the Indian Reserve Bank, and the
Department of Companies to track the stock market trades, and none of these 2750 odd
companies have been banned for life. Several of the sponsors and commercial financiers guilty
for these crimes are still free to wander. Market authorities and banks are not in a position to
prosecute or reclaim their assets. So far, only 229 of 2750 ghost businesses have been reported

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by authorities. It is difficult to penalize or recover the assets of financial over authorities and
stock markets. Thus far, only 229 of 2750 disappearing businesses were reported by authorities.
EMERGENCE OF WHITE COLLAR CRIME
White-collar crime has been termed as a socio-economic crime due to its direct influence on our
community and our financial systems. Developments in science, morals, and social theories have
now led to changes in society restructuring, and this has materially affected criminal law,
whether due to new progressive thinking or economic and social imbalances.
Corporate Personality Analysis

Corporations are nothing more than collectives of individuals according to this theory. In this
case, a person commits the offence; the corporation is then charged with the responsibility of that
individual.
Theory of the realist
This theory states that corporations have an existence that is in some degree independent of their
members ' existence. This is where corporate responsibility rests above all. In my view, realist
philosophy seems more compelling and more realistic. Some of the arguments supporting the
assumption that corporates can take responsibility for criminal matters is that it is often the
company itself that is wrong and that prosecutions and retribution are aimed directly to the true
perpetrator via its policies or practices. For most cases one has not committed a felony by
himself. The offense usually encompasses the work of many parties in conjunction with the weak
or non-existent policies of a business which causes damage in the end. In several instances firms
also have complicated frameworks buried in several layers of corporate hierarchy, which make it
difficult, if not impossible, to identify the real blame. There is no dispute once just fines are
levied in compliance with any statute. There is no deception when the position of the judge
allows the right to enforce a penalty or a sentence, because client penalties are levied by jury in
every situation. A legal enterprise cannot obviously be incarcerated, because it cannot be put in
jail. A legal controversy is there when the statute provides for the punishment of the offense of
obligatory incarceration with penalty of fine. The Supreme Court Commisioner of Assessment-
LL, Banglore & Ors. v. Velliappa Textiles Ltd&Anr. was of the opinion that since the artificial
human, such as a firm cannot be sentenced to incarceration, such a clause, that demands that a
certain incarceration period be enforced, can not be implemented in the case of a fine. In 2005,
however, the Supreme Court expressly overruled the Velliapa Textiles case in Standard Charted

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Bank v. Directorate of Enforcement in a 3:2 majority decision. K.J Balcrishanan J. J. "We
consider that perhaps the firms do not have clemency simply because prosecution is an offense
for which the penalty prescribed is mandated incarceration. "Another category of serious white
collar crime is government scams, an act which is illegitimate and deliberately wipes the
government out of funds through trickery." If the policy is fiddled, the rates are paid by
taxpayers. Procurement and vendor corruption are the most costly forms of government
bribery.In the case of deception, the perpetrator utilizes another's personal data to defraud people.
Grifters of this kind of crime must face heavy sanctions if they are trapped. Insurance fraud is
very popular wherein perpetrators falsify compensation claims, injuries and other claims that are
inflated so asr to obtain additional reimbursements. Postal theft is perpetrated through the use of
Postal Service or any personal or corporate national mail carrier, including
mailboxes.Laundering is an activity where the asset and motive of illegally obtained assets is
concealed by criminals.Government corruption undermines the obligation for civil servants to
also have faith in their community. Whoever is appointed, nominated, employed or a staff
member of a population electorate will be deemed to have broken the law at the state or local
level if they make a favorable decision in return for a favour. White collar crime, involving
companies, broker-sellers, consultants and foreign investors, become involved in deception on
shares when the trustee is deliberately misleading shareholders for economic benefit. Any
perpetrator who evades taxes knowingly and unlawfully prevents the government from collecting
valid tax. A telemarketing scam is a form of white-collar crime where the guilty party plans to
use phone communication to trick their victims from their funds or assets unlawfully. Award
prizes, car purchases, and loan promotions are among the most common types of cold calling
scams
.

The main reasons why such professional criminals remain unpunished are as follows
:i) Lawmakers and law enforcement agencies belong to the same group or class as these
criminals;
ii) Very little effort by the authorities;
(iii) Rules that are favorable the criminal;
iv) A reduced effect on victims

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We need to strengthen our agencies such as the Enforcement Directorate, the Central
Investigation Bureau, the Revenue Intelligence Department, the Customs Department and the
income-tax department at this stage. Quick trials ought to be organized through the appointment
of more magistrates. The Central Vigilance Commission should continue to investigate the
activities of the senior officers. The general public should not stop persecuting the white-collar
criminals because the offence is usually targeted at them. Ultimately, if they are tracked and
convicted of a crime, then this serves as part of the dissuasive punishment concept.

Common Types of White Collar Crime In India:

1) Bank Fraud Fraud is a crime perpetrated with the aim of deluding itself and receiving
unfair profit. Bank fraud is a criminal act perpetrated against the banks by the fake firms.
The abuse of legally binding items such as check bouncing, bonds, deposit accounts, etc..
Bank fraud impacts the general public because the banks and the government have a
connection in terms of confidence..

2) Bribery: Through bribery which means providing the individual in the highest place
cash or a certain good to do a favor. Bribes are also a very popular type of white collar
crime. Simply put, corruption is when one person gives cash to the other person in power.

3) Cybercrime:The major source of fraud in India is cybercrime. This is the most recent
problem in the cyber world. The abuse related to computer networks is digital security.
There is also an accelerated spike in crimes linked to technology, as technology advances
rapidly. Cybercrime consists of people who are specialists in computing. It's dedicated to
harming the developer's credibility or physically affecting the technical aspects of the
technology directly or indirectly.

Cybercrime affects countries, the security and financial status of individuals. The country
may be affected by cybercrime as well since it may also violate a person's privacyin
addition to monetary loss. Classified disclosure can generate privacy issues. There is also
growing cybercrime against women. Cell phone -stalking, the sending obscene messages

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 and photos by criminals to women are also increased by the use of telecommunications
networks.

4) Money Laundering: Laundering is a fraud activity where the perpetrators mask the
money's origin. In this fraud, offenders attempt to conceal the actual ownership of cash
and the location where it was obtained illegally. In this fraud, offenders attempt to
conceal the actual ownership of cash and the location where it was obtained illegally.For
example, if an individual gets black market resources, the cash is deemed "illegal" and he
is unable not deposit it into financial institutions, which may find it odd because if he
transfers the money directly into the institutions he has to provide reports and documents
showing where and how it was made

5) Tax Evasion: Tax avoidance is done to disguise the real taxable income and the initial
status of the proceeds. This concealment of income is done to reduce the tax liability in
the eyes of government. Such cover-up of taxes are made in the glare of the government
to reduce tax responsibility. Simply put, such involves removing the earnings through
illegal means, so that the tax authorities may accept a reduction in their obligation and
display low income. Tax avoidance is negatively affected by the demoralization of honest
taxpayers, which also puts power and influence in the possession of few undeserving
citizens.

6) Identity Theft: Theft in personality is one of these days ' best offences. Thanks to
advances in technology, everyone's personal data can be accessed very easily. Identity
theft is a crime in which the criminal access unauthorized information such as name,
address, phone number etc. and use this information to gain money. Theft of
identification is a felony in which confidential data like name, email, telephone number,
etc. is obtained by the perpetrator and this knowledge is used to steal money.

How White Collar Crimes Affects More Than Just The Criminals:

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Tax evasion can have a huge effect on society and not only on offenders. It has also been named
as a socio-economic activity as it directly affects community. If a white collar crime occurs,
massive business losses are caused that negatively affect the end user and community. Diverse
amounts of scams and schemes in our nation have been uncovered in recent times including 2g
scandle, havala scandle, financial institition scandle, ammo scams and more. Because of these
scams and shysters, our country's economy is in shambles. To compensate for these
consequences of theft or schemes, companies and governments raise costs. That leads to higher
customers ' premiums for increased taxes, and increased insurance rates. The effects of financial
crime on social order are enormous. In all fields there are losses from commodity costs to bonds
and health coverage. The businesses, shareholders and the state may be influenced by white
collar crime. You only need a lousy tipper who will plan to defraud the firm fout of covetousness
and harm the company's reputation

Legislations Against The White Collar Crime In India:

In order to identify white collar crimes, the government has introduced various legislation. This
law contains penalties for these crimes.. These laws are, in fact, the Industry Act of 1951, the
Imports and Exports Act of 1947, the Essential Commodity Act of 1955,the Company Act
of1956, the Money Laundering Act of 2002 and the Foreign Exchange Act of 1974, .

The penal code in India includes rules for the prevention of crimes like banking fraud, credit card
fraud, insurance fraud, etc. The security department in India also initiated many measures to
handle this issue. India’s Reserve directed instructions that the banks strictly follow in
accordance with the guidelines of KYC (know your client). Financial institutions and banks are
obliged to keep the transaction records for a period of 10 years.

The information technology law of 2000 was introduced to provide legal acknowledgement of
the authentication of information exchanged in the context of commercial transactions to address
computer-related crimes.

The punishment for the following crimes is provided for in Sections 43 and 44 of the Information
Technology Act:

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 ● Copying an extract from any data is unauthorized.
● Accessing and downloading of unauthorized files.
● Denying access to a computer system for an authorized person.
● Support anybody to facilitate unauthorized computer access.

While cybercrime is not the focus of the Information Technology Act, there are some provisions
in this Act to deal with white collar crimes. The offense in cyber-crime is covered in Section XI
and in Section IX the punishment and award of crime are addressed. In addition, because of the
lack of focus, many problems seem to be unresolved. Certain ones are:

● Ineffectiveness
● Appointment qualification as an Adjudicator not prescribed
● Definition of hacking
● Zero measures to combat piracy
● International cooperation deficiency
● Police authority to access and is check only applicable to public places

In order to identify white collar crimes, the government has introduced various legislation.
This law contains penalties for these crimes.

i. Tax Law on Customs, 1961.

Recommendations to curb white collar crime menace

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 1. Establishment of organizations specializing in investigative expertise
2. Establish investigative centres of excellence
3. Increase awareness and promote whistleblowing
4. Private public partnership.

CONCLUSION
The implicit effects of white-collar crime, turning it into survivors across India, should be
stressed to promote more political engagement to influence government discourse about
these less obvious, ' victimless ' forms of crime. Therefore, Indian government must improve
governance and take strict action against the offenders. Auditor General is showing the way
forward, the need of the hour is for political parties to have the spirit to clean up the mess.
The private sector must implement fraud prevention measures and focus on ethics to reduce
frauds. Both sectors have to collaborate to minimize fraud risks in India. The reasons of
justifications are there for the methods used for the control of white collar crimes, the
ambivalence of the social response to this sort is so related to wider social factors which have
both objective and subjective dimensions.

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