The crime rate in India is on the rise. When it comes to the commission of the crime, the status of the person does not seem to matter. People of higher class and lower class both commit the crime. When a person who has received a good education and is a salaried employee commits a crime while they are an employee of the company is called a white-collar crime. The people who commit these kinds of crime belongs to a higher status. These crimes are being committed in every field, namely education, health, commerce etc.
History of White Collar Crime
The term White Collar crime was given by an American Sociologist Edwin Sutherland in 1941. He stated that White Collar crimes are those crimes that are committed by people who have respect and high social status. He said that these crimes are anti-social crimes committed by people of the upper class. These crimes aim to take leverage of their high-status occupation and to take advantage of the whole economy. In earlier times, no law could control these crimes, resulting in the offenders getting away without any punishment. Due to this, numerous studies were conducted, and several criminologists suggested to the government reforms and measures to tackle such crimes.
Types of White Collar Crime in India
- Bribery– It is a very prevalent type of White Collar Crime. In simple words, it means giving money or any other goods to someone to gain favour from that person. It can be done to stop someone from doing something or to urge someone to do something.
- Bank fraud– It means to cheat the banking institutions by making forged documents or false identification. It also includes making a false representation in cheque bounce, securities, bank deposits etc. Whenever such type of crime is committed, it is the ordinary people that get affected.
- Money laundering– It means when a person hides the source of the money that he has acquired. Here the person receives the money from illegal sources and then pretends that he earned that money legitimately. He may receive the money from the black market, sale of illegal objects or any illegal source of making money. The person will try to make numerous deposits to avoid suspicion, and by depositing the money into the bank, the money becomes legitimate and can be used.
- Insider trading– It means when someone uses the information to be kept a secret from the public and discloses it to people who then make profits by exploiting that information. The person disclosing that information can be any member of the company. This results in substantial financial losses to the institution and also to the shareholder.
- Identity theft– It means when the person uses another person’s identity to access personal information and uses it to commit fraud. The person committing such a crime may use information like name, bank account number etc. The person who commits such a crime is often well versed in computers and hacking.
- Tax evasion– It means when a person avoids paying tax which is mandatory to be paid. The person may give false information to the tax authorities or may transfer the property illegally.
Law related to white-collar crime in India
The law related to white-collar crime in India is
- Income tax act– Under this act, punishment can be given for evading tax by using illegal means, giving false information to the authorities, late payment of tax etc.
- Indian Penal Code– In this act, punishment can be given for committing fraud, forging documents, bribery etc.
- Companies act– In this act, punishment can provide a false statement, give false evidence, etc.
- The Prevention of Corruption Act– Under this act, punishment can be given for committing corrupt activities, giving false documents etc.
- Information Technology Act– Under this act, activities like identity theft, stealing confidential information can be punished.
- Prohibition of Insider Trading Regulation Act– This act prohibits the act of insider trading.
- Negotiable Instruments Act– Under this act, activities like cheque bounce, fraud concerning bills of exchange, promissory notes etc., are punishable.
White-Collar Crime in the U.K.
White-collar crime is also prevalent in the U.K. In earlier times, the investigating authorities have let the institution that commits such crime avoid prosecution and go for mediation and settlement. This was seen more during the time period after the financial crash. Nevertheless, since then, lawmakers and the investigating agencies have stepped up their efforts to fight white-collar crime and making the punishment more stringent. In 2018, the act named Criminal Finance Act was established. This act gave power to investigating agencies to issue an “unexplained wealth order” or UWO, and it gives them authority to enquire the people who own certain possession to explain the origins of that property. This law has helped the U.K. to curb the commission of the white-collar crime. The English court has also helped in reducing such crimes. The court has ordered that litigation privilege must be established between clients and lawyers for investigation. The agencies that can investigate and punish white-collar crimes are the Serious Fraud Office, National Crime Agency and Financial Conduct Authority.
There are two types of offences related to White-collar crime, i.e. Summary offences, Indictable offences. Summary offences can only be heard by Magistrate court, and the maximum punishment that they can give is up to 12 months of imprisonment. Indictable offences are those offences that the Crown court can hear. The severe offences are heard there. In England, the companies, including private and public, are given a separate legal identity from the people who work there. So the liability can be established either vicariously or Non-vicariously.
White-collar crime in Canada
In Canada, white-collar crimes are prohibited under the Canadian Criminal Code. It includes crimes like tax evasion, blackmail, corruption, insider trading, money laundering etc. Earlier, there was an act called Combines Investigation Act, 1923, which dealt with such offences, but it was abolished and in its place came the Competition Act, 1986. In 2018, Canadian Criminal Code was revised to insert the provision of DPA or Deferred Prosecution Agreement. It is an agreement between the company that has committed a white-collar crime and the prosecutor. It means that the trial against the company will be paused, but certain conditions will be presented to the company, which they have to fulfil to avoid conviction. The condition may include paying penalties, enhancing the reporting requirements etc.
There has been a steady rise in white-collar crime. These kinds of crime are not isolated, meaning that they do not just affect one person but can affect society as a whole. In India, scams like PNB, 2g scam etc., has had a significant impact on society. The judiciary and the legislation should work together so that laws can be made and amended from time to time to curb such crime better.