Federal Investigation Agency

White-Collar Crimes

Syed Muhammad Wasi Hyder,psp

Additional Director,
FIA, Crime Circle, Hyderabad
 LEARNING OBJECTIVES

 Blue Collar Crime

 White-collar crime
 Types of White-collar crimes
 Examples of white-collar crimes
 Impact of white-collar crime on society
 White-collar crimes in Pakistan
 BLUE COLLAR CRIME
• Blue collar crime is a crime that is usually
committed by individuals or groups from a low
social class.
• These crimes are typically committed out of an
immediate desire or need and without intensive
planning.
• This is because they do not have access to the
power or influence of white-collar criminals.
 BLUE COLLAR CRIME
• Coined in the 1920s
• Low social class
• Skill or unskilled
• Paid wage-labor
• Not require a higher academic education
• Examples are:
• Burglary & Theft
• Drug Abuse
• Murder
White Collar Crime
(WCC)

“crime in the suites”

as opposed to
“crime in the streets”
 Defining White-Collar Crime
 Edwin Sutherland first coined the term
“white collar crime” in 1939
 The crime “committed by a person of
respectability and high social status in the
course of his occupation”
 Crimes committed by corporations and
other legal entities also white-collar
crimes
 US Department of Justice
 Non-violent crimes
 Financial gain
 Committed by means of deception
 By persons whose occupational status is
entrepreneurial, professional or semi-
professional (special technical & professional
knowledge)
 Utilizing their special occupational skills and
opportunities
 Modern Concept of WCC

The Federal Bureau of Investigation (FBI)

has defined white-collar crime as:

“those illegal acts which are characterized by

deceit, concealment, or violation of trust and
which are not dependent upon the
application or threat of physical force or
violence.”
 Modern Concept of WCC

WCC is now synonymous with the full

range of frauds committed by business
and government professionals
 Modern Concept of WCC
 Corporate, white collar and organized
crimes are variants of the same form of
crime

 Crimes committed by two or more than

two persons are called organized crimes
 Corporations needs assistance and
support of tax officials for committing Tax
Fraud
 WCCs vs Violent Crimes
 White-collar crimes subject to criminal law and
criminal justice
 Not regarded as crime in the same way as
burglary, robbery, assault, target killing or other
violent crimes
 White-collar crimes are less likely to prompt
calls for tougher policing and punishment
 WCC vs Violent Crimes
 Its not common to hear demands for
“zero tolerance” of fraudsters or
antisocial behavior orders for companies

 The key feature of WCC- high status of

offenders lead to its different treatment in
the criminal justice process

 It is not violent (in most of cases)

 WHITE COLLAR CRIME VS BLUE COLLAR CRIME
WHITE COLLAR CRIME BLUE COLLAR CRIME
NATURE OF CRIMES NATURE OF CRIMES
Non-Violent, financially motivated (eg. Often involves physical actions and can
Fraud, embezzlement, insider trading) be both violent and non-violent. (eg.
Robbery, assault, vandalism)

Perpetrators Perpetrators
Typically performed by individuals in Often performed by individuals from
professional or managerial positions lower socioeconomic backgrounds

Detection & Prosecution Detection & Prosecution

Usually harder to detect and prove, Generally Easier to detect, with
often requiring extensive investigation perpetrators often caught in the act or
and financial audits through straightforward police work

Societal Impact Societal Impact

Can have a profound impact on the Directly affect communities, leading to
economy, trust in financial systems, physical harm, property damage, and a
and can lead to a significant finan loss sense of insecurity among the public
Types of WCCs
 Types of WCCs
 Corruption

 Corporate Crime

 Financial Crime

 Banking Frauds and Forgeries

 Pyramid / Investment Schemes

 Plastic Money Crimes (Credit/Debit/ATM Cards)

 Cyber Crimes

 Counterfeiting
 Types of WCCs
 Embezzlement

 Stock Exchange Crimes

 Insurance Frauds
 Money Laundering
 Terrorism Financing

 Financing of Proliferation

 Hawala / Hundi
 Types of WCCs
 Illegal Logging

 Environmental crimes

 Trafficking in Persons

 Smuggling of Migrants

 Immigration Crimes

 Passport Related Crimes

 Tax Evasion
 Types of WCCs
 Infringement of Intellectual Property
Rights (IPRs)
 Identity Theft
 Insider Trading: using non-public
information to sell or buy stock before the
time in order to make money/ save loss
from good or bad news
 Challegnes of WCCs
 Invisible: take place in the private
sphere of the workplace
 Relatively invisible and can be
concealed more easily because
‘business offenders are legitimately
present at the scene’
 Trust: committed during the course
of an occupation, they involve an
abuse of the trust
Challenges of WCCs
Insider Knowledge:
 Offences made possible by
use of some technical or
‘insider’ knowledge.
 It may be an awareness of
how to use organizational
routines to conceal offending
or may involve the abuse of
professional, scientific or
financial ‘expertise’
Challenges of WCCs
 Complex: many WCCs are
complex and involve various
financial transactions
 Paper Trail: Offences may be
with a long ‘paper trail’
 Transnational & Organized:
Many WCCS transnational &
highly organized involve several
participants with differing
degrees of responsibility
 Misconception about WCCs

 Victimless: Offences
are characterized as
victimless

 There are no victims of

WCCS

 No Victim, No Crime
 Misconception about WCCs
 WCC is not a victimless crime

 A single scam can destroy a

company, devastate families by
wiping out their life savings, or cost
investors billions of dollars
 Examples
of
White-Collar Crimes
 Examples of WCCs

 Lehman Brothers- USA

 Parmalet - Italy

 Enron - USA

 HIH - Australia

 AIG - USA
 Examples of WCCs

 Freddie Mac- USA

 Fannie Mae- USA

 Northern Rock Bank - UK

 Impact
of
White Collar Crimes
on Society
 Impact
 Financial ‘scandals’ such as the
collapse of major banks and
pension frauds question the
legitimacy of the financial world
 Tax and public sector fraud
reduces government resources for
health, education and welfare
 Impact
 Increased economic hardship for the
average citizen and consumer
 The WCCs increases the cost of doing
business
 Increase in business costs passed on to
the consumer through increased prices
and decreased services
 Impact
 The criminal activities of conglomerates
endanger the safety of workers,
consumers and passengers, and have a
wider impact on public health and the
environment
 It deprives the ordinary people from its
hard earned income/ savings e.g stock
market crash, fraudulent investment and
pyramid schemes
Questions?