There is no definition of "white-collar crime" in any statute. The phrase, which
has a colloquial meaning, is used to characteristic a variety of non-violent
acts that are carried out by people in power or positions of trust, frequently
for financial gain.
Although the term "white-collar crime" is not specified in any statute, both
federal and state laws identify and forbid several particular kinds of
white-collar crimes. Infractions include fraud, embezzlement, money laundering,
insider trading, and securities fraud are only a few examples of these..
There are regulations that target particular businesses or industries where
white-collar crimes are especially prominent in addition to particular criminal
charges. For instance, the False Claims Act (FCA) permits private parties to
file lawsuits on the government's behalf to recover costs caused by deception
against government programmes or contracts, while the Foreign Corrupt Practices
Act (FCPA) forbids paying bribes to foreign officials in order to win or keep
White-collar crime does not have a legal definition, but it is a term that is
generally accepted among law enforcement, government officials, and attorneys.
This acknowledgment takes into account the complexity, sophistication,
difficulty in detection, and frequent serious financial and societal
repercussions of white-collar crimes.
White-collar crime has received more attention in recent years, especially in
the wake of high-profile incidents like the Enron disaster and the 2008
financial crisis. Due to this, efforts have been made to enhance
already-existing laws and regulations as well as to increase enforcement and
punishments for crimes against white-collar workers.
Business executives, legislators, and government officials are examples of
people in positions of authority and trust who frequently engage in white collar
crime. White collar crime is a serious issue that has been in India for a long
time. This essay seeks to examine white collar crime in India, its causes, and
the responses offered to it.
How white-collar crimes are different from ordinary crimes?
Ordinary crimes and white-collar crimes differ in a number of ways, including
the nature of the conduct, the parties involved, the motivations for the crime,
and its effects.
- Offense Type
White-collar crimes frequently entail financial fraud, embezzlement, bribery, or
insider trading, while common crimes typically involve actions like theft,
assault, robbery, or murder. Those who have access to private financial
information or who are in positions of authority within businesses are
frequently those who perpetrate white-collar crimes.
- Individuals Involved
Most people who commit common crimes are desperate for money, drugs, or other
forms of personal enjoyment. White-collar crimes, on the other hand, are
committed by those who are driven by greed, a need for status or power, or a
sense of entitlement. White-collar criminals are frequently intelligent,
prosperous, and well-liked members of society.
- Motives Behind the Crime
White-collar crimes are typically driven by avarice or a desire for power,
whereas regular crimes are frequently committed out of necessity or desperation.
The resources and connections that white-collar criminals frequently have
provide them the ability to perpetrate complex crimes.
Consequences of the Crime
Ordinary crimes typically only have immediate effects on the victims, however
white-collar crimes can have far-reaching effects on a variety of persons.
White-collar offences can result in monetary losses for shareholders, creditors,
and investors as well as harm an organization's reputation.
- Investigating and bringing charges
Local law enforcement organisations often conduct investigations into common
crimes, and state or federal prosecutors typically bring charges. Contrarily,
white-collar crimes are frequently looked into by specialised authorities like
the Securities and Exchange Commission (SEC) or the Federal Bureau of
Investigation (FBI), and they are frequently brought to justice by federal
prosecutors. White-collar cases are frequently complicated and necessitate
extensive investigation and prosecution resources.
In conclusion, white-collar crimes differ from regular crimes in terms of the
nature of the offence, the parties involved, the motivations driving the crime,
its repercussions, and the investigation and legal process. White-collar
offences have the potential to have a large negative impact on society, so it is
essential that they be handled seriously and dealt with harshly.
Social-economic Crimes are another term for white-collar crimes
White-collar crime is another name for social-economic crimes, a category of
crime. These crimes, which include financial fraud, embezzlement, bribery,
insider trading, and other types of white-collar crime, are generally committed
by people in positions of authority, trust, and responsibility within
corporations. In order to highlight the effects of these offences on society,
the economy, and the public's confidence in institutions, the term
"social-economic crime" is frequently employed.
American sociologist Edwin Sutherland first used the term "white-collar crime"
in 1939. White-collar crime, according to Sutherland, is "a crime committed in
the course of one's employment by a person of legitimacy and high social
status." Sutherland asserted that white-collar crime was a significant issue
that the legal system had mostly overlooked.
Similar to white-collar crimes, social-economic crimes are frequently committed
by those with access to confidential financial information, positions of trust,
and the authority to influence organisational decision-making. The consequences
of these crimes on society, the economy, and public confidence in institutions
may be enormous.
Financial fraud is one of the most prevalent types of social-economic crime. The
deliberate misrepresentation or omission of financial information for the goal
of financial advantage is referred to as financial fraud. Accounting fraud,
securities fraud, and mortgage fraud are just a few examples of the many
different types of financial fraud.
The manipulation of financial statements to falsely represent a company's
financial performance is known as accounting fraud. This can include, among
other things, overstating revenue or understating expenses. In order to
manipulate a security's price or persuade investors to acquire or sell shares,
securities fraud entails misrepresenting information. In order to get a mortgage
or to get a mortgage at a better rate, mortgage fraud entails giving false
Another prevalent type of social-economic crime is embezzlement. Theft of money
or property by a person who has been given responsibility for keeping that money
or property secure is known as embezzlement. Embezzlement can happen in a
variety of settings, such as the workplace, the government, and non-profit
Another instance of social-economic crime is bribery. Giving or receiving cash
or other rewards in exchange for a choice or action is known as bribery. Bribery
can happen in many different situations, including those involving politics,
business, and law enforcement.
Another type of social-economic crime is insider trading. Trading securities
based on knowledge that is not generally known is known as insider trading.
Because it gives insiders an unfair competitive advantage and has the potential
to hurt other investors, insider trading is prohibited.
Social-economic crimes can have serious repercussions. Investors, stockholders,
and creditors may suffer financial damages as a result of these crimes. They can
also harm the organisations' reputations and undermine public confidence in
institutions. Social-economic crimes sometimes even cause recession or economic
An growing amount of attention has been paid in recent years to social-economic
crime and the need to hold those responsible for it accountable. Governments all
across the world have enacted legislation and created regulatory bodies to
combat and look into social-economic crime. The Securities and Exchange
Commission (SEC) of the United States and the Financial Conduct Authority (FCA)
of the United Kingdom are two examples of regulatory organisations in charge of
looking into social-economic crimes.
In conclusion, white-collar crime is also known as social-economic crime. These
crimes, which include financial fraud, embezzlement, bribery, insider trading,
and other types of white-collar crime, are committed by people who have
authority over other people and are trusted by companies. The economy, society,
and public confidence in institutions can all be significantly impacted by
social-economic crimes. Governments and regulatory bodies must hold those
responsible for these crimes accountable, both personally and corporately.
Classification Of White - Collar Crimes
A wide term used to describe non-violent criminal actions committed by people or
organisations for financial gain is "white-collar crime." These crimes
frequently involve the misappropriation or theft of money, property, or
information and are frequently committed by individuals in positions of power,
such as executives, managers, and professionals. Although there isn't a single,
widely accepted classification for white-collar crimes, they can be divided into
many major categories according to the offense's specifics.
One of the most prevalent categories of white-collar crime is fraud.
For financial advantage, it entails purposeful misrepresentation or deception of
another individual. Securities fraud, bank fraud, insurance fraud, and tax fraud
are a few examples of fraud.
is the theft of money or other assets that has been entrusted to
a person by a company, organisation, or government body. Typically, a trusted
employee�like a bookkeeper, accountant, or treasurer�commits embezzlement.
Bribery is when something of value is offered, given, or received in
return for a favour, such a commercial deal or a government contract. Bribery is
frequently used to obtain an unfair advantage over rivals or to sway judgements.
- Insider trading:
Is the practise of purchasing or selling stocks based on
information that is private and not generally known. Because it gives insiders
an unfair advantage in the stock market, it is unlawful.
- The practice of passing off the proceeds of unlawful activity as legitimate
funds is known as money laundering. This is frequently accomplished by
transferring the funds through a convoluted series of transactions to make them
hard to track.
Cybercrime refers to any crime committed using technology, such
as breaking into computer systems to steal confidential data or commit fraud.
The rising reliance on technology in business and daily life has led to an
increase in cybercrime in recent years.
- Crimes Against the Environment:
Crimes against the environment involve
breaking environmental rules and laws in order to obtain financial gain. This
can include illicit logging, the disposal of hazardous waste, and other types of
- Theft or unauthorised use of intellectual property, such as patents,
copyrights, and trademarks, constitutes intellectual property crime. This can
involve software piracy, counterfeiting of items, and other types of
intellectual property theft.
- Public Corruption:
Abuse of authority by elected officials or other public
servants for private benefit is referred to as public corruption. Accepting
bribes, kickbacks, or other types of illicit payment are examples of this.
- Securities Fraud:
Financial data is manipulated in securities fraud in order
to fool investors or influence the stock market. Insider trading, accounting
fraud, and other kinds of securities fraud fall under this category.
To sum up, white-collar crimes can come in a variety of shapes and sizes, but
they are all done for financial benefit and frequently include the
misappropriation or theft of money, assets, or information. Serious
repercussions for people, organisations, and society at large may result from
these acts. In order to safeguard the public and make sure that justice is done,
it is crucial for law enforcement authorities and regulatory organisations to be
attentive in identifying and prosecuting white-collar crimes.
Laws regulating white - collar crimes
Criminal offences known as "white-collar crimes" are committed by people in
high-ranking positions within enterprises or organisations. Even while these
crimes are often not violent, their victims may still suffer serious financial
consequences. A number of laws have been passed at the federal and state levels
to control and punish these acts.
- Act to Prevent Corruption (PCA):
The PCA is a comprehensive piece of
legislation that addresses corruption offences committed by public authorities,
including employees of public sector companies and government employees. It
defines and punishes offences like extortion, abuse of power, bribery, and
illegal behaviour by public employees. The PCA also creates procedures for
examining, pursuing, and punishing corrupt actions.
- The Indian Penal Code (IPC) is a general criminal code that contains rules
relating to many types of white collar crimes, including fraud, forgery, fraud,
breach of confidence, and criminal conspiracy. Both persons and organisations
engaged in white collar crimes are subject to these regulations. In cases
involving white collar crimes, the IPC is frequently used since it provides the
legal foundation for categorising and punishing various forms of financial
- Companies Act:
In India, the Companies Act controls how businesses are formed, run, and
managed. It has provisions for company governance, financial reporting,
auditing, and corporate disclosure needs. The Companies Act additionally
specifies the obligations and duties of company executives, directors, and
other workers. It also offers procedures for looking into and punishing
financial crimes like insider trading and corporate fraud.
- Act governing India's Securities and Exchange Board (SEBI):
The main piece of
legislation regulating India's securities market is the SEBI Act. It covers laws
relating to securities frauds, insider trading, manipulation of markets, and
other offences linked to securities transactions and establishes the Securities
and Exchange Board of India (SEBI) as the regulatory body for the securities
market. Additionally, the SEBI Act creates a legal structure for overseeing the
securities market's intermediaries, including stock markets, brokers, and
- The Prevention of Money Laundering Act (PMLA) aims to stop money laundering,
which is frequently linked to white-collar offences like fraud, corruption, and
illegal financial activity. The PMLA specifies what constitutes a money
laundering offence, sets forth procedures for identifying, verifying, and
notifying suspicious transactions, and outlines the investigation, legal action,
and penalties for money laundering offences. The Enforcement Directorate is
given further authority by the PMLA to conduct investigations into cases of
money laundering in India.
- The Information Technology Act, usually referred to as the IT Act, is a
comprehensive piece of legislation that regulates data protection, cybercrimes,
and electronic transactions in India. It has provisions for offences including
hacking, phishing, theft of identities, cyberfrauds, and other types of
electronic crime that are frequently connected to white collar crimes.
Cybercrimes, which are more and more common in the world of white collar crimes,
are investigated, prosecuted, and prevented legally thanks to the IT Act.
- Other pertinent laws In addition to the laws stated above, India also
has additional relevant laws and rules that apply to particular categories
of white collar crimes. The Benami Transactions (Prohibition) Act, for instance,
addresses benami transactions, which are transactions in which one person holds
property while another person pays for it. The Foreign Exchange Management Act
(FEMA) addresses offences involving foreign exchange, including cross-border
transactions, external commercial borrowings, and money laundering.
Associated With Corporate Insolvency, Fraudulent Practises, and Avoidance
Transactions are covered by the Insolvency and Bankruptcy Code. Additionally,
there are laws and rules that are specialised to the banking, insurance, taxes,
competitors, and consumer protection industries that include provisions for
white collar crimes within their respective jurisdictions.
Causes of White Collar Crime in India
Corruption is one of the key causes of white collar crime in India. People in
positions of authority routinely engage in criminal activities without being
concerned about the repercussions since corruption is pervasive in politics,
business, law enforcement, and other facets of society. As a result,
accountability is lacking.
The regulatory landscape is intricate. Another factor
that contributes to understanding India's extensive regulatory framework is the
country's high rate of white collar crime. People can commit crimes more easily
and undetected since numerous laws and regulations are not strictly enforced.The
lack of accountability among individuals in positions of authority is another
factor that contributes to India's high rate of white collar crime. Criminals
usually go unpunished, which promotes an environment of impunity.
Measures Taken to Address White Collar Crime in IndiaSpecialized Agencies:
To look into financial crimes, the government set up
specialist institutions like the Central Bureau of Investigation (CBI). Several organisations have been tasked with looking into high-profile white collar crime
cases and prosecuting individuals responsible.
New Laws and Regulations:
To address white collar crime in India, the government
has passed new rules and regulations. To combat the problem of money laundering,
the Prevention of Money Laundering Act (PMLA) was introduced in 2002. To improve
corporate governance and boost transparency, the Companies Act, 2013, was also
The government has also taken steps to support the organisations that help India fight white collar crime. To combat insider
trading, for instance, the Securities and Exchange Board of India (SEBI) has
been given increased authority.
Also, the government of India has taken steps to raise
public awareness of white collar crime. A campaign to inform the public about
the risks of corporate fraud and the significance of corporate governance, for
instance, has been initiated by the Ministry of Corporate Affairs.
Courts and White - Collar Crimes in India: Brief of recent cases
White collar crime has recently been involved in a number of high-profile
instances in India. In this essay, we'll talk about some of the most important
cases and the effects they had on the nation.
- Swindle at Punjab National Bank
Punjab National Bank (PNB), the second-largest state-run institution in India,
disclosed in February 2018 that it had discovered fraudulent transactions
totaling more than $1.8 billion at one of its Mumbai branches. Jeweler Nirav
Modi and his uncle Mehul Choksi were allegedly engaged in the scam. They
allegedly obtained fraudulent loans from PNB using phoney letters of credit. The
scam had a negative effect on the share price of PNB as well as the entire
banking industry in India.
- IL&FS Scam
A non-banking financial organisation called Infrastructure Leasing & Financial
Services (IL&FS) is in charge of funding infrastructure projects in India. The
business had a $12 billion debt when it was discovered that it couldn't pay its
creditors in 2018. The IL&FS scam brought attention to India's banking sector's
lack of accountability and transparency and sparked considerable public
- Yes Bank Scam
One of the top private sector banks in India, Yes Bank, was placed under a
moratorium by the Reserve Bank of India (RBI) in March 2020 as a result of a
serious worsening in its financial situation. The Enforcement Directorate (ED)
detained the bank's founder, Rana Kapoor, on suspicion of money laundering. The
scandal served as a reminder of India's banking industry's inadequate leadership
and lack of openness.
- DHFL Scam
Dewan Housing Finance Company Limited (DHFL) and its promoters were the subject
of a money laundering complaint filed by the Enforcement Directorate (ED) in
November 2019. According to the corporation, more than 2,60,000 fictitious home
loan accounts were created, and the promoters stole more than Rs 31,000 crore
from the business. The DHFL scandal served as a reminder of the Indian financial
sector's need for improved regulation and monitoring.
- Vijay Mallya Case
The head of Kingfisher Airlines and an Indian businessman named Vijay Mallya
escaped to the UK in 2016 after defaulting on loans totaling more than Rs 9,000
crore. Mallya is currently being sought by India for extradition on suspicion of
fraud and money laundering. The case brought attention to the problem of wealthy
Indians defaulting on their loans as well as the lack of accountability
displayed by people in positions of authority.
- Satyam Scam
Ramalinga Raju, the chairman of Satyam Computer Services, acknowledged
falsifying records and defrauding investors of more than Rs 14,000 crore in
2009. One of the largest corporate frauds in Indian history, the Satyam scam
caused the company to fail. The case made clear that India's IT industry needs
more corporate governance and responsibility.
The economy and prestige of India have been significantly impacted by these
high-profile incidents of white collar crime. They have emphasised the necessity
of more stringent corporate governance and responsibility, as well as tighter
regulation and control of India's financial industry. To stop future occurrences
of these types of situations, the government must act decisively to solve these
challenges. Therefore, it is essential that those who conduct white collar
crimes are held accountable and prosecuted.
White - Collar Crime in Corporations
Yes, businesses can commit white-collar crimes. White-collar offences are
motivated by money, non-violent crimes often committed by those in situations of
power or influence within organisations, such as businesses, for their own
advantage or the benefit of the organisation. These crimes can lead to severe
financial losses, reputational harm, and legal repercussions and are frequently
committed by deceit, fraud, or other unethical ways.
Professionals, executives, or workers in positions of responsibility inside
organisations are frequently the perpetrators of these crimes. White-collar
crime can have major repercussions for businesses, such as financial losses,
reputational damage, and legal penalties.It's crucial to remember that
companies, as legal persons, may be held criminally accountable for white-collar
offences committed by their officers, agents, or employees and may suffer
serious legal and financial repercussions, including penalties, fines, and
reputational harm. To avoid and identify white-collar crimes and to take early
and suitable action if any such misbehaviour is found, firms must have strong
internal controls, compliance programmes, and ethical standards in place.
Examples of white-collar offences that Corporations may commit include:
- Accounting fraud is the manipulation of financial statements, falsification of
accounting records, or misrepresentation of financial data in order to deceive
stakeholders such as investors or authorities.
- Insider trading: Illegal trading in stocks based on data that is not generally
known to the public and is frequently carried out by corporate insiders, such as
executives, staff members, or directors.
- Offering or accepting favours or kickbacks to obtain an unfair advantage in
commercial negotiations, such as obtaining agreements or permits, or persuading
representatives of the government, is known as bribery and corruption.
- Money laundering is the process of making unlawfully obtained funds appear
legitimate by hiding their source or nature through complex financial
- Intellectual property theft is the taking or appropriation of another company's
trade secrets, patents, copyrights, or trademarks for personal or commercial
- Environmental crimes include breaking environmental regulations and laws, such
as by polluting the environment or endangering the public's health or the
environment by improperly disposing of hazardous material.
- The Punjab National Bank (PNB) fraud case, which was discovered in 2018, is one
prominent instance of white-collar criminality in Indian organisations. The case
involves a substantial fraud that was carried out by wealthy jeweller Nirav Modi
and his uncle Mehul Choksi, the proprietor of Gitanjali Gems, with the help of
- In order to receive credit from different Indian banks abroad without putting up
collateral, Nirav Modi, Choksi, and their enterprises used bogus Letters of
Undertaking (LoU) issued by PNB personnel. One of the greatest financial scams
in Indian history, the scheme was believed to be worth more than INR 14,000
crore (about USD 2 billion) at the time.
Significant flaws in the bank's internal controls and risk management
procedures, as well as complicity between the accused and bank employees, were
exposed by the PNB fraud case. It caused a big controversy that resulted in the
arrests of numerous people, including Mehul Choksi and Nirav Modi, as well as
substantial losses for PNB and the other institutions involved. Investigation
and legal actions are still being taken in the situation.
The Satyam Computer Services affair, which surfaced in 2009, is one significant
instance of white-collar criminal activity in an Indian business. One of the
biggest corporate frauds in Indian history was Satyam Computer Services Ltd., an
IT services business from India.
Ramalinga Raju, the company's founder and chairman, admitted to faking the
company's financial records to the tune of INR 7,136 crore (about USD 1.5
billion at the time), exaggerating the company's revenues, earnings, and cash
balances. In addition to falsified bank records, exaggerated invoices, and
phoney client accounts, Raju admitted the allegations of fraud had been ongoing
for a number of years.
substantial financial losses were experienced by investors, employees, and other
stakeholders as a result of the Satyam affair, which also had a substantial
influence on the Indian corporate sector. These effects included heightened
regulatory scrutiny, modifications to corporate governance procedures, and a
decline in investor trust. The company was later acquired by Tech Mahindra,
another Indian IT services company, to revive its operations and image after
Raju and other significant fraud participants were detained and charged
In order to deter and identify white-collar crimes, firms must have strong
corporate governance, openness and moral procedures, which are all highlighted
by the Satyam incident. It also emphasises the necessity of strong regulatory
enforcement and oversight to hold people and businesses responsible for
White-collar crime is a sophisticated and developing area of criminal law with
far-reaching effects on people, organisations, and society at large. Although
the term "white-collar crime" is not specifically defined in any statute, it is
frequently used to refer to a variety of non-violent crimes that are carried out
by those in positions of trust or power.
White-collar crime frequently involves people who have positions of power or
control within organisations, which is one of its primary characteristics. These
people might take advantage of their positions to commit crimes like money
laundering, insider trading, fraud, and embezzlement in order to enrich
themselves or their organisations at the expense of other people.White-collar
crime is distinguished by the fact that it frequently involves intricate
financial transactions or other types of deception that can be challenging to
uncover and prosecute. It may be difficult for law enforcement authorities and
regulators to detect and bring charges against white-collar offenders as a
result of this intricacy and expertise, and it may also be tricky for victims to
get their losses back.
Notwithstanding these difficulties, there are several laws and rules intended to
deal with white-collar crime. These laws may target particular illegal
behaviours, such insider trading or money laundering, or they may concentrate on
particular sectors of the economy or types of business that are particularly
vulnerable to white-collar crime.
White-collar crime has received more attention in recent years, especially in
the wake of high-profile incidents like the Enron disaster and the 2008
financial crisis. This focus has intensified attempts to make laws and
regulations stronger, as well as to increase enforcement and penalties for
crimes against the wealthy.
On the issue of white-collar crime, there is still a lot of work to be done.
This might entail enhancing the identification and prosecution of white-collar
criminals, toughening up on offenders, and putting corporate governance, ethics,
and transparency reforms in place. Overall, white-collar crime continues to be a
serious and complicated problem that calls for ongoing attention and action by
law enforcement organisations, regulators, corporations, and society at large.
We can ensure that our financial and economic systems are just, open, and devoid
of illicit behaviour by cooperating to address this issue.
White-collar crimes are immoral and against the law, and committing them can
have dire repercussions, including money losses, legal repercussions, and
I would strongly advise people and organisations to follow ethical business
practises and abide by all relevant laws and regulations rather than making
proposals for white-collar crimes in India or anyplace else. Here are some
helpful recommendations for companies in India, or any other nation, to
encourage moral behaviour and deter white-collar crimes:
Develop and implement strong internal controls to guarantee accuracy, integrity,
and transparency in reporting on finances, record-keeping, and other company
activities. This entails the division of labour, periodic audits, and review
procedures to find and stop fraud.
Encourage an ethical and honest culture:
Encourage an ethical and honest culture
throughout the entire organisation, starting with the top leadership. Create a
code of ethics that spells out acceptable ethical conduct, and offer frequent
training and awareness campaigns to your staff.
Enhance corporate governance by adhering to sound corporate governance
principles, such as independent board monitoring, distinct director and
executive positions, and open decision-making procedures. By doing so, you can
increase responsibility and lessen the possibility of fraudulent activity.
Do your homework:
Do your homework before establishing business partnerships
with partners, suppliers, or clients. To reduce the danger of engaging in
illicit activities, this includes validating credentials, finances, and
Keep financial reporting transparent and accurate:
Observe legal obligations,
financial reporting standards, and accounting standards. Avoid engaging in
dishonest activities including exaggerating revenues, concealing losses, or
fiddling with financial statements.
Encourage reporting and whistleblowing:
Create channels for stakeholders and
workers to report alleged fraudulent activity in confidence and without worry
regarding reprisal. Any reported issues should be looked into right away,
followed by the required action.
Keep abreast on laws and regulations:
Keep abreast of pertinent rules and
regulations affecting your sector, and make sure you are following them. When
necessary, seek legal and expert counsel to make sure you are abiding by all
applicable rules and regulations.
Remember that developing a sustainable and renowned firm requires using ethical
business practises. White-collar crimes and other unethical behaviour can have
serious repercussions and damage people's reputations as well as the reputations
of organisations. It is always preferable to do out business in a truthful,
open, and legal manner.