1

Page
S. No Topic
No.
1 GENERALINTRODUCTION

2 CONCEPT OF WHITE COLLAR CRIMES

2.1 DEFINITIONS

2.2 WHITE COLLAR CRIME — AN OVERVIEW

2.3 RELATION TO OTHER TYPES OF CRIME

2.4 MORAL AMBIGUITY IN WHITE - COLLAR - CRIMINAL LAW

3 TYPES OF WHITE COLLAR CRIMES

3.1 WHITE-COLLAR CRIMES IN INDIA

3.2 WHITE COLLAR CRIMES IN CERTAIN PROFESSIONS

3.3 COMPUTER RELATED WHITE-COLLAR CRIMES

WHITE-COLLAR CRIME DISTINGUISHED FROM
3.4 TRADITIONAL CRIME

3.5 LEADING CASES IN WHITE - COLLAR CRIME

3.6 MISCONCEPTIONS ABOUT WHITE COLLAR — CRIME

4 JUDICIAL RESPONSE TO THE WHITE COLLAR

REASONS FOR GROWTH OF WHITE — COLLAR CRIMES IN
4.1
INDIA
4.2 FEATURES OF WHITE — COLLAR CRIMES IN INDIA

4.3 HOW WHITE - COLLAR CRIME IMPACTS THE SOCIETY

WHITE COLLAR CRIMES WITH SPECIAL REFERENCE TO
5
CYBER CRIMES
5.1 CYBER CRIMES

5.2 DIFFERENT TYPES OF CYBER- CRIMES

CYBER TERRORISM AGAINST THE GOVERNMENT
5.3
ORGANIZATIONS
5.4 STATUTORY PROVISIONS
 2

5.5 PREVENTIVE MEASURES

6 WHITE COLLAR CRIMES ARE WIDE SPREAD IN SOCIETY

INTEGRATED POLICY WITH STREET - CRIME & WHITE —
6.1
COLLAR CRIME
6.2 PROTECTION FROM WHITE —COLLAR CRIME

6.3 CONCEPT OF WHITE — COLLAR CRIME

6.4 CHALLENGES TO THE JUDICIAL SYSTEM

7 ECONOMIC CRIMES

7.1 CHARACTERISTICS OF ECONOMIC CRIMES

7.2 INDIAN LEGISLATION TO DEAL WITH MONEY LAUNDERERS

7.3 SURVEY ON ECONOMIC CRIMES IN INDIA

8 CONCLUSION

8.1 REMEDIAL MEASURES

8.2 BABILIGRAPHY
3
 4

CHAPTER – I
GENERAL INTRODUCTION
 5

1.1 GENERAL INTRODUCTION:

A study of crimes against ​White Collar Crimes in the historical period these
are so many ​White Collar Crimes​. The crimes committing persons at historical
period are punished under certain acts. There are also White Collar Crimes committed
in national and international wide. The crimes committing people will get punishment
under certain acts.

1.2 NEEED FOR THE STUDY:

I have taken up the study as very little work is done in this subject. This subject is
recognized in every country.

1.3 STATEMENT OF THE PROBLEM:

The present study deals with White Collar Crimes and hence | have framed the
problem as “White Collar Crimes”. .

1.4 OBJECTIVES:

The object of this study is to depict some of the problem areas of the White
Collar Crimes. There are so many White Collar Crimes in our country. A deep perusal
into this problem will throw adequate light on this neglected area. For these reasons
the present study scopes of examine the following objectives

1.4.1 To trace the development of White Collar Crimes.

1.4.2 To critically analyze the existing laws relating to White Collar Crimes.

1.4.3 To critically evaluate the judicial trends.

1.5 HYPOTHESIS:

1.5.1 The laws are not giving proper protection White Collar Crimes.

1.5.2 The judges and Advocates have to be sensitized to the needs of White

Collar Crimes.

1.6 REASEARCH METHODOLOGY:

 6

To study the working provisions dealing with White Collar Crimes. The
researcher wanted to adopt both the doctrinal and non-doctrinal methods of study.
However due to the constraints of time the researcher was forced to rely on secondary
data. Researcher collected his secondary data from the libraries of Sri
Krishnadevaraya University, Anantapuramu.

1.7 SCOPE OF THEE STUDY:

Though the area of the White Collar Crimes is very wide. The researcher concentrates
only on the laws relating to white collar crimes.

1.8 LIMITATIONS:

Researcher continued his study of judicial Response mainly from criminal law journal
from....and made passing reference to All India Reporter.

1.9 SIGNIFICANCE OF THE STUDY:

The researcher has made an attempt to evaluate the law relating to White
Collar Crimes. It is hoped that it would be a good resource to be helpful for
academicians, policy makers.
 7

PLAN OF THE STUDY:

The entire study here is organized in 8 chapters.

Chapter (one) deals with General Introduction.

The Second Chapter deals with Definition Chapter.

Chapter third deals with types of white Collar Crimes.

Chapter four deals with the judicial response to the white collar crimes in India.

Chapter five deals with white collar crime with special reference to cyber crime.

Chapter six deals with white collar crimes are wide spread in society.

Chapter seven deals with Economic crimes.

Chapter eight gives conclusion.

 8

CHAPTER – II
CONCEPT OF WHITE COLLAR
CRMES
 9

2. CONCEPT OF WHITE COLLAR CRIMES

2.1 DEFINITIONS

2.2 WHITE LCOLLAR CRIME – AN OVERVIEW

2.3 RELATION TO OTHER TYPES OF CRIME

2.4 MORAL AMBIGUITY IN WHITE – COLLAR – CRIMINAL LAW

 10

WHITE – COLLAR CRIMES – DEFINITONS

2.1 Definition of white collar crime

A non-violent crime that is committed by someone, typically for financial

gain. The typical white-collar criminal is an office worker, business manager, fund
manager or executive. Forensic accountants, auditors and whistle blowers identify and
report white-crimes. Entities that investigate white – collar, crimes include Kennaeth
Lay, Bernard Madoff and Bernard Ebbers.

Investopedia explains ‘White-Collar Crime’

Explain of white-collar crimes include securities fraud (the misrepresentation

of investment information), embezzlement (misuse of funds), corporate fraud in
(dishonest and / of illegal actions by a company employee or executive) and money
laundering (giving criminally-obtained funds the appearances of having a legitimate
source) white collar crime is punishable by fine, imprisonment or both.

FOOTNOTE: CRIMINOLOGY, PENOLOGY, VICTIMOLOGY By Prof N.V.

PARANJAPE of Page No: 12
 11

Definitional Issues

Modern criminology generally rejects a limitation of the term by reference,

rather classifies the type of crime and the topic:

By the type of Offense, eg., property crime, economic crime and other corporate
crimes like environmental and health and safety law violations. Some crime is only
possible because of the identity of the offender, eg., traditional money laundering
requires the participation of senior officers employed in banks. But the FBI has
adopted the narrow approach, defining 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” (1989, 3).
This approach is relatively pervasive in the United States; the record-keeping does not
adequately collect data on the socioeconomic status of offenders which, in turn,
makes research and policy evaluation problematic. While the true extent and cost of
white-collar crime are unknown, the FBI and the Association of certificate fraud
examiners estimate the annual cost to the states to fall between S$ 300 and S$ 660
billion.

BY the type of Offender, e.g., by social class or high socioeconomic status, the
occupation of trust or positions of profession, or academic qualification, researching
the motivations for criminal behavior. e.g., greed or fear of loss of face if economic
difficulties become obvious. Shover and Wright (2000) point to the essential
neutrality of a crime as enacted in a statute. It almost inevitably describes conduct in
the abstract, not by reference to the character of the persons performing it. Thus, the
only way that one crime differs from another is in the backgrounds and characteristics
of Irerators. Most if not all white-collar offenders are distinguished by list of privil, oit
with origins in class inequality.
 12

Byorganization culture rather than the offender or offence which overlaps with
organized crime. Appelbaum and Chambliss offer a twofold definition:

FOOTNOTE: CRIMINOLOGY, PENOLOGY, VICTIMOLOY BY Prof

N.V.PARANJAPE of Page No:23

Occupational crime which occurs when crimes are committed to promote

persona interests, say, by altering records and overcharging or by the cheating clients
by professionals.

Organizational or corporate crime which occurs when executives commit

criminal acts to benefit their company by overcharging or price fixing, false
advertising, etc.

2.2 WHITEW- COLLAR CRIME: AN OVERVIEW

The phrase “white-collar crime” was coined in 1939 during a speech given by
Edwin Sutherland to the American Sociological Society. Sutherland find the term as “
crime committed by a person of respectability and high oysters in the course of the
occupation”, Although there has been some debate as to what qualifies as« as a
white-collar crime, the term today generally encompasses a variety of nonviolent
crimes usually committed in commercial situation for financial gain. Many
white-collar crimes are especially difficult to prosecute because the perpetrators use
sophisticated means to conceal their activity through a series of complex transactions.

The most common white-collar offenses include: antitrust violations,

computers and interest fraud, credit card fraud, phone and telemarketing fraud,
bankruptcy fraud, health care fraud, environmental law violations, insurance fraud,
mail fraud, government fraud, tax evasion, financial fraud, securities fraud, insider
tradin, bribery, kickbacks, counterfeiting, public corruption, money laundering,
embezzlement, economic espionage and trade secret theft.
 13

According to the Federal Bureau of Investigation white collar crime is

estimated to cost the United States more than $300 billion annually. Although
typically the government charges individuals for white-collar crimes, the government
has power to sanction corporations as well for these offenses. Penalties for white-
collar crimes offense include fine, home detention, community confinement , paying
the cost of prosecution, forfeitures, restitution, supervised release, and imprisonment.

However, sanctions can be lessened if the defendant take responsibility for the
crime and assist the authorities their investigation.

Any defenses available to non-white-collar defendants in criminal courts are

also available to those accused of white- collar crimes.

A common refrain of individuals or organizations facing white-collar criminal

charges is the defense of entrapment. For instance, in United States V.Williams, 705
F.2d603 (2" cir. 1983),one of the cases arising from “Operation Abscam”, Senator
Harrison Williams attempted unsuccessfully to argue that the government that the
government induced him into accepting a bribe. Both state and federal legislation
enumerate the activities that constitute white-collar criminal offenses.

The commerce clause of the U.S. Constitution gives the federal government
the authority to regulate white — collar crime, and a number of federal agencies (see
sidebar), including the FBI, the Internal Revenue Service, the secret service, U.S.
customs, the Environmental protection in the enforcement of federal white- collar
crime legislation. In addition, most states employ their own agencies to enforce
white-collar crime laws at the state level.
 14

2.3 RELATIONSHIP TO OTHER TYPES OF CRIME

Blue-collar crime

The types of crime committed are a function of what is available to the

potential offender. Thus, those employed in relatively unskilled environments and
living in inner-city areas have fewer “situations “ to exploit than those who work in
“situation” where large financial transactions occur and live in area where there ia
there relative prosperity. Blue-collar crime tends to be more obvious and thus attracts
more active police attention such as vandalism or shoplifting. In contract, white collar
employees can incorporate legitimate and criminal behavior, thus making themselves
less obvious when committing the crime. Therefore, Blue- collar crime will more
often use physical force, whereas in the corporate world, the identification of a victim
is less obvious and the issue of reporting is complicated by a culture of commercial
confidentiality to protect shareholder value. It is estimated that a great deal of
white-collar crime is undetected or, if detected, it is not reported.

Corporate crime

Corporate crime deals with the company as a whole. The crime benefits the
investors the also who are in high positions in the company or corporation. The
relation white-collar crime has with corporate crime is that they are similar because
they both are involved within the business world. Their difference is that white-collar
crime fits the individual involved, and corporate crime benefits the company or the
corporation.

One well-known insider trading case in the United States is the ImClone stock
trading case. In December 2001, top-level executive sold their shares in ImClone
systems, a pharmaceutical company that manufactured an anti-cancer drug. The U.S
 15

Securities Exchange Commission invested numerous top level executives who had
also sold her shares at the same time. The SEC reached a settlement in 2005.

State-corporate crime

The negotiation of agreements between a state and a corporation will be at a

relatively senior level on both sides, this is almost exclusively a white-collar
“situation” which offers the opportunity for crime. Although law enforcement claims
to have prioritized white-collar crime, evidence shows that it continues to be a low
priority.

When senior levels of a corporation engage in criminal activity using the company
this is sometimes called control fraud.

Organized Transnational Crime

Organized Transactional crime is organized criminal activity that takes place

across national jurisdiction, and with advance in transportation and information
technology, law enforcement officials and policymakers have needed to respond to
this from of crime on a global scale. Some examples include human trafficking,
money laundering, drug smuggling, illegal arms dealing, terrorism, and cybercrime.
Although it is impossible to precisely gauge transnational crime, the Millennium
project, an international think tank, assembled statistics on several aspects of
transnational crime in 2009.

● World illicit trade of almost $780 billion

● Counter feiting and piracy of $300 billion to $1 trillion e

● Global drug trade of $321 billion

 16

Occupational crime

Individuals may commit crime during employment or unemployment. The two most
common forms are theft and fraud. Theft can be of varying degrees, from a pencil to
furnishings to a car. Most employees do steal and the expense is high. Insider trading,
the trading of stock by someone with access to publicly unavailable information, is a
type of fraud.

2.4 MORAL AMBIGUITY IN WHITE-COLLAR CRIMINAL LAW

Many cases involving allegations of white collar criminality reflect a striking

quality of moral ambiguity, a tendency to blur the lines between what is 14

Truly criminal and what is not. After offering five case studies in which such
ambiguity is manifest, the article posits ten overlapping and interrelated factors that
help explain both the causes and effects of this phenomenon.

In some cases, it i8s difficult to distinguish between what is criminal and what
is “merely aggressive” behavior, as when a defendant argues that alleged extortion
was merely “hardball negotiating “, obstruction of justice was nothing more than
“Jealous advocacy”, perjury was just “wiliness” on the witness stand fraud was really
“creative accounting”, tax evasion was merely “tax avoidance”, bribes were actually
“campaign contributions”, and so on.

In other cases (involving, for example, various intellectual property and

regulatory offenses), legislature have criminalized conduct that large segments of the
public simply do not regard as worthy of criminalized conduct that larger segments of
the public simply do not regard as worthy of criminalization.

Also relevant in understanding the causes and effects of moral ambiguity in

white collar criminal law are factor such as: the complexity of the underlying conduct
involved the difficulty of defining harms and identifying victims; the diffusion of
 17

responsibility among numerous responsible agents; confusion caused by the statutory

conflation of inchoate and completed offenses, and by the distinctive role played by
mens rea; the overlap between civil and criminal sanctions; the fact that white collar
crimes are often codified apart from more traditional offenses; less severe treatment of
white collar crime by prosecutors, the courts, and in sentencing; and the way in which
while collar crime is treated by the media in the academy.
 18

CHAPTER-III
TYPES OF WHITE COLLAR
CRIMES
 19

3 TYPES OF WHITE-COLLAR CRIMES

3.1 WHITE —COLLAR CRIMES IN CERTAIN PROFESSIONS

3.2 COMPUTER RELATED WHITE-COLLAR CRIMES

3.3 WHITE-COLLAR CRIME DISTINGUISHED FROM TRADITIONAL CRIME

3.4 LEADING CASES OF WHITE-COLLAR CRIME

3.5 MISCONCEPTIONS ABOUT WHITE-COLLARED CRIME

 20

3. WHITE COLLAR CRIMES IN INDIA

White collar crimes are to be considered as a global phenomenon to which

India is no exception. As discussed earlier, white collar crimes emerged in India with
the advent of the British colonization during the period of industrial capitalism. Prior
to that, instances of men working with the district treasury embezzling with the
money kept under his safe custody or bribing practiced to this limit. Thus, the people
indulging in the modern times have reached the stage of ‘meat-eaters’.

3.1 WHITE COLLAR CRIME IN CERTAIN PROFESSIONS

Legal Profession:

In India the lawyer’s profession is not looked with much respect these days.
There are two obvious reasons for this. The deteriorating standards of legal education
and Unethical practices restored to by the members of legal profession to procure
clientage are mainly responsible for the degradation of this profession which was once
considered to be one of the noblest vocations.

The instances of fabricating false evidence, engaging professional weaknesses,

violating ethical standards of legal profession under dietary tactics in conclusion with
the ministerial staff of the courts are some of the common practices which are truly
speaking, the White Collar crimes quite often practiced by the legal practitioners.
Generally, professional Crooks and criminal gangs have their own trusted lawyer who
can be depended upon to arrange think and keep himself ready with bail Bond or
Habeas Corpus writ to avoid a rest of the Gangster.

If the members of the gang are arrested, the lawyer has to find out ways and
means to arrange or ‘fix’ their release. There are criminal lawyers who arrange
professional alibis, cooked witnesses in close liaison with the police for defending the
gangster. There is a definite Code of conduct for legal profession but it is only an
ornamental document.
 21

However, this is not to say that all lawyers are corrupt and unethical. quite a
large number of them are not most sincere and honest in their profession commanding
great respect from all sections of society.

Perhaps, it is because of the Peculiar nature of their profession that lawyers

and advocates have to Resort to these tactics in order to survive in the profession
which is become more and, more competitive with the passage of time.

The White Collar crimes became a phenomenon to be reckoned with industrial

revolution. Modern industrial capitalist economy which evolved with time became
Complex in nature has it developed a growing commercial Nexus among insurance,
banking, stocks and related corporate matters.

This in turn, give rise to critical legal intricacies relating to property rights and
other legal matters with paved the way for birth of a new clash of professional of
advocates who in the name of providing justice started abetting in the wrong and
thereby pursued their own narrow interest.

A large number of advocates evolved, who forget the pious oath Observing
the society and started looking for the legal loopholes and concentrated mainly in
helping out the rich entrepreneur to grow richer. They Norm, Particularly with those
medical men who do not have a good practice or have only a marginal earning.

The persons employed in essential services of the government or other

undertaking are often confronted with the problem of getting Leave due to shortage of
staff. They, therefore, procure metal certificate regarding their false sickness and
produce it to the department to justify their absence from duty. In return, they have to
pay certain amount to the concerned medical staff. Thus, though a white collar crime,
this tactics has proved a boon and a workable alternative to employees who have
difficulty in obtaining leave from the employers.
 22

Fake and misleading Advertising is yet another area in which the White Collar
criminals operate. They make legal and misleading clients of medical cure through
advertisements in newspapers, magazines, radio and television does heading to human
misery. Many patent medicines are not only worthless but harmful.

Similar advertisements for cosmetics and adulterated food are also widespread
in practice which is injurious to public health. These persons may not break the letter
of the but, buy violating its, spirit, they commit crimes which are not only antisocial,,
but also injurious to public health.

In India, the White Collar crimes are so widespread that it is not confined
itself in the legal arena. Similar unfortunate instances can be drawn from other
professionals too, like that of medical practitioner, engineer, educationalist,
businessman, politicians and the list goes on. the medical practitioners are often found
involved in issuance of false certificate, carrying out illegal abortion, selling out
sample drugs and medicine, even some cases adulterated drugs and Medicine to the
patients. Dilatory tactics are often adapted by them in providing treatment to their
patients with a menswear to extract huge amount of money, No matter the person has
good practice. some of the notorious instances are like that of Nether case, where the
medical professionals put up before the society the optimum level of brutal character
they can reach for the crave of making money. Misleading and fake advertisement
climbing absolute cure is also one of the frequent malpractices being carried out in the
medical profession.
 23

The problem lies in the fact that they often escape punishment, since they
cannot be said to have violated the letter of law, but, by violating the spirit of law,
they commit crimes which are truly antisocial and it creates enormous damage to the
public health and safety at large.

3.2, computer related White- Collar crimes

The latest development in information technology and electronic media

Especially during 1990’s have given rise to a new variety of computer related White
Collar crime which is commonly called Cyber - crimes. The widespread growth of
this crime has become matter of global concern and a challenge for the law
enforcement agencies in the new Millennium. Because of the Peculiar nature of these
crimes, they can be committed anonymously and far away from the victim without
being, physically present there. Further, Cyber criminals have a major ​advantage;
they can use Computer technology to inflict damage With-out the risk of being
caught.

The cybercrimes over a wide range of illegal computer related activities,

which include offences such as, theft of communication

Services, industrial espionage, dissemination of pornography and sexy

offensive material in cyberspace, electronic money laundering and tax evasion,
electronic vandalism, terrorism and extortion, telemarketing frauds, illegal
interception of Telecommunication etc. in fact, there is a cyber-crime wave in the 21st
century. Presently voices are the most common problems which are causing serious
damage to computer system. Most viruses just replicate themselves, but many also
cause damage, there are no more than 5000 different strains of viruses across the
globe.
 24

For instance, ‘love bug’ virus of May- 2000 caused severe damage to working
internet sites. So also the virus recently developed by Pakistan has defaced the Indian
website. Besides virus, there are some common cyber offences which are directed
games computer systems, network or theatre. Not-able among them are:-

3.2.1 Pheakering:- ​It is a way to circumvent the building mechanism of telephones

allowing anyone to call anywhere in the world never literally without any cost.

3.2.2 Internet frauds: ​Cyberspace now provides a wide variety of investment about
unity is opening new areas for deceit or fraud. Electronic funds transfer systems have
begin to proliferate. Hence, there is risk of transactions being intercepted or diverted.
Now a days a valid credit card numbers can be intercepted electronically as well hey
physically another Digital information stored on acard canbe counterfeited.

Section 74 of the copy right act make the offence punishable with imprisonment up to
2 years or with fine which may extend to 100000 rupees.

3.2.3 Hackers:- Hacker is one who enjoys exploiting the details of Programmable
systems and knows how to treat their capacity, computer system is punishable with
imprisonment up to 3 years and fine which we extend to 200000 Rupees as per
section 66 of the Copyright Act.

3.2.4 stalking:- In stalking, persistent messages for Central unwilling recipients thus
causing them annoyance, worry and mental torture. sending off unsolicited email or
spamming is an infringement of right of privacy.

3.2.5 E-mail security invasion:- It means to encrypt the email and make it private
and non viewable to others. Section 72 provides placement for this offence.
 25

3.2.6 money laundering:- It is a kind of cybercrime in which funny is illegal a

downloaded 3rd shift. the magnitude of the offence he is indicated by the table given
below.

3.2.7 data diddling:- It means changing or erasing of data in subtle ways which
makes It difficult to put the data back or certain of its accuracy. it may be stated that
just the legitimate organizations in the private or public sector rely upon, information
systems for communication or Record Keeping so too the cyber-criminal
organizations carry on their illegal activities by enhanced cyberspace Technology.
commenting on this Eric Ellen, one of the officials of the international Chamber of
Commerce(ICC) as predicted that information technology is not only reshaping the
mode of Corporate functioning and emerging new business strategies but it is
dramatically increasing the number of potential cybercriminals.

According to him, there is bound to be simultaneous increase in the incidence

of Cyber-crimes with the new internet site and uses which currently totals around 35
million worldwide.

3.4 White Collar crime distinction from traditional crime: It must be noted that
White Collar criminality has a close affinity to the attitudes and values of culture in a
particular society this is evident from the fact that White Collar criminals are
intelligent, Stable, and successful and a man of high social status as compared with
the ordinary criminals.

They are foresight a person's belonging to the prestigious group of society.

White Collar crimes which are committed in commercial world or indirect,
anonymous, impersonal and difficult to detect. As against this ordinary criminals
commit crimes which are direct and involve physical action such as beating, removal
of property or use of force, etc. which can be easily identified and detected. it is often
said that ordinary comes which are otherwise called’ Blue Collar crimes’ or more
common with the underprivileged class while the White Collar crimes are committed
by the members of privileged group who belong to upper strata of society.
 26

Edwin Sutherland, however, suggests that status alone is not the determinant
factor of White collar or Blue Collar crime. this is evident from the fact that he will
the most privileged and Prestige persons may commit heinous crime such as assault,
Murder, rape or kidnapping for which day can be severely punished, while, on the
other hand, most unprivileged persons may be involved in a white collar crime like
tax evasion, corruption or misrepresentation which may not be looked as serious
offence. This however, does not mean that White Collar crime are pretty offences
because they do not carry major punishment.

Undoubtedly, the pathologist hitherto confined their attention to prevention of

ordinary predatory crimes but the recent penal program sufficiently indicate that
Emphasis has now shifted to suppression of white collar criminality with equal vigor
and strength. The amendments introduced in the Indian companies act in 2000,
monopolies and restrictive trade practices act in 1992, insurance and the banking
laws, the appointment of Lokpal, Lokayukta and tightening of governmental control
over private business groups sufficiently reflect upon the Government’s determination
to suppress White Collar criminality in India.

There is much resemblance between white collar and the blue collar crime.
Both owe is to come their origin to common low and adaptations of principles of
theft, fraud etc. 2 modern socio economic Institutions and effect there is no basic
difference between the two. The only peculiarity of White collar crime is that it is
committed by the persons of relative high status of society. The criminal content in
both the types is more or less common.

It must, however, be noted that men’s rea or guilty mind is essential ingredient
of every Blue Collar crime but many statutes dealing with white collar crime do not
require mens-rea in strict sense of the term. The doctrine of constructive mens rea
applies in such cases.
 27

3.5 Leading cases of white collar crimes

4.1 Satyam computer fudging of accounts. The TO] New service date 8 January
9th Rs 40 billion fraud in company balance sheet founder chairman B
Ramalinga Raju

4.2 Talgii stamp fraud 1993

4.3 Harshad Mehta share ghotala( 1991-92)

4.4 Murlidhar Meghraj lawyer vs state of Maharashtra( 1976) 3 SCC 684, 1976
SCC(Cri) 493

4.5 M.H.Haskot vs state of Maharashtra( 1978) 3 SCC 544, 1978 (Cri) SCC 468

4.6 state of Maharashtra vs Mohd yaqoob( 1980) 3 SCC 57: 1980 SCC(Cri) 513

4.7 state of Maharashtra vs George AIR 1965 ICri LJ 641

4.8 Tejani vs Darge prevention of food adulteration( 1974) SCC 167( 1974) SCC
(Cri) 87

4.9 R.S Nayak vs AR Antuley AIR 1984 SC 684

4.10 P.V.Narasimha Rao vs State AIR 1998 SC 200 23

3.6 MISCONCEPTIONS ABOUT WHITE COLLAR CRIME

 28

The most recent issue of psychology today has a short column on four major
MYTHS that are widely it comes to White Collar crime usually described as an illegal
act committed for financial gain.

5.1 White Collar crimes are nonviolent- since White Collar crime he is usually
characterized as nonviolent, many are prone to this myth. But criminals in
general have a sense of entitlement and need for control. .

5.2 White Collar criminals for highly paid- you may be thinking of famous Ponzi
schemers Like Bernie Madoff or Allen Sanford here, but white collared
kennels also depend on poorly paid underlings.

5.3 white collar criminals or otherwise outstanding citizens about 40% off White
collared criminals have a record.

5.4 it's all about cash- yes, there are fully paid White Collar criminals, but the
mastermind of the crime could be very rich. Researchers say” peer pressure,
company culture, and you hubris” cause people to commit White Collared
crimes.
29
 30

CHAPTER – IV
JUDICIAL RESPONSE TO THE
WHITE COLLAR CRIMES

4. JUDICIAL RESPONSE TO THE WHITE COLLAR CRIMES IN INDIA

4.1 REASONS FOR GROWTH OF WHITE COLLAR CRIMES IN INDIA

4.2 FEATURES OF WHITE COLLAR CRIME IN INDIA

4.3 THE CAUSES OF WHITE COLLAR CRIME

4.4 HOW WHITE COLLAR CRIME IMPACTS THE SOCIETY

 31

4. JUDICIAL RESPONSE TO THE WHITE COLLAR CRIMES IN INDIA

The Judiciary has taken a serious note of the growing intensity of the White
Collar crimes. For the sake of convenience the judicial response in this regard can be
classified under the following there headings:

1. judicial response under the prevention of corruption act, 1988

2. judicial response under the prevention of Food Adulteration Act and

3. Judicial response under other statutes dealing White Collar crime.

 32

1. Prevention of Corruption Act:-

District judicial Vigilance over corruption is reflected in various Judgments of

the apex court.

In J.Jayalalitha vs U.O.1 the supreme court observed: “The legislature has

enacted the act and provided for speedy trial offences punishable under the act in
public interest as it has become aware of rampant corruption amongst the public
servants. while replacing the 1947 act by the present act, the legislature wanted to
make the provisions of the act more effective and also to widen the scope of the act by
giving a wider definition to the term “ public servant”.

The reason is obvious. Corruption corrodes the moral fabric of the society and
corruption by public servants not only leads to corruption of the moral fabric of the
society what is also harmful to the national economy and national interest, have the
persons occupying high posts in government by misusing their powers due to
corruption can cause considerable damage to the national economy, National interest
and image of the country”.

In state of Maharashtra vs Prabhakar Rao the supreme court observed that the
definition of public servant under section 21 of |.P.C he is of no relevance under the
prevention of corruption act.

This means that a person may be held liable under the act even if he is not a public
servant within the meaning of Section 21 of |.P.C. In order to curb effectively bribery
and corruption not only in government establishments and departments but also in a
semi governmental authority and bodies and their departments where the employees
are interested with public duties, a comprehensive , definition of public servant has
been given in section2(c) of the act. when the legislature has given such a
comprehensive definition of public servant to achieve the purpose of punishing and
curbing growing corruption, It would be appropriate not only meet the contents of the
definition class by construction which would be against the spirit of the statute.
 33

The court is required to adopt a purposive approach as would give effect to the
intention of the Legislature. Employees for servants of a cooperative society, which is
controlled or headed by the government, are covered by the section2(c) (iii) of the act
and hence are public servants”

In Ram Narayan Poply vs C.B.| the Supreme Court, defining the object and
purpose of the special Court( trailer offences relating to transactions in securities) act,
1992 observed that the Act was promulgated with a view to recover public Manish
last by certain banks and Financial Institutions in securities where sir classes are rows
as a result of such transactions. The court further observed:” it is equally trite 2 state
the contrary proposition that where there are no losses at all, the Institution of the
special Court was whole and necessary and the special Court was not to try such
transactions even they amounted to some technical offences”.

The code for the defined the purpose of sec13(2) half the POCA by
mentioning, that he didn't end to deal with aberrations of public servants. the court
held that the appellant in furtherance of criminal conspiracy, in his capacity as a
public servant abused his position by causing and/ or allowing MUL’s funds to be
utilized for the wrongful gain of appellant 5.Thus, the court held that the provisions of
section13(1) © read with section13(2) are clearly applicable.

Referring to the nature on the adverse effect of White collar crimes, the court
observed:” the offences in these cases or not of conventional or traditional types, the
ultimate objective was to use public money in carefully bland man up for personal use
with no right to do it. The cause of the community deserves better treatment at the
hands of the court in the in charge of hits judicial functions.

The community or the state he is not a Persona non grata who’s Call may be
treated with disdain. The entire community is aggrieved if the economic offenders
who ruin the economy of the state or not brought to book.
 34

A Murder may be committed in the heat of moment upon passions being

aroused. An economic offence he is committed with cool calculations and deliberate
design with a lie on personal profit regardless of the consequences to the community.

A Dis-regard for the interest of the community can be Manifested only at the
cost of forfeiting that trust and Faith Unity in the system to administer justice in hand
even handed manner with the Fear of Criticism from the quarters which view White
Collar crime with a permissive eye, unmindful of the damage and to the national
economy and national interest.

Unfortunately in the last few years the country has seen an alarming rise in the
White Collar crimes, with Fiber of country's economic structure. These cases are
nothing but my weight gain at the cost of public and lead to economic disaster.

The supreme court, however, preferred to apply reformative theory” instead of

the punitive theory of punishment in this case. The court observed:” normally, in
cases involving offences which corrode the economic stability are to be dealt with
sternly.

However, however considering fact that the occurrence took place a decade
back, on the death of one of the accused, we feel custodial sentence for the period
already undergone could meet the ends of Justice. While fixing the quantum of
sentence, we have during considered the fact that in the instant case the amount has
been paid back”.

In Vivek Gupta vs C.B.lthe Supreme Court considered the scope of the

jurisdiction of special Court dealing with corruption cases. the court held that, even if
the opponent was not charged under the POCA but under sections120- B/420 of |.P.C,
the special judge have the power to try the appellant with other co-accused Who, in
addition to the shed sections, were also charged under section 3 and 4 FB hacked
under section 220 and 233 Cr. P. C. held that such resources available to the special
Court.
 35

In state Of MP vs AK Gupta the supreme court dealt with criminal misconduct

committed by the public servant while holding their offices.

The court observed:” section 13 of the act deals with various situations when a
public servant can be said to have committed criminal misconduct. section 13(1)(e) is
applicable when the public servant or any person on his behalf, he is in a position or
has, at any time during the period of his office, been in position for which the public
servant cannot satisfactorily account pecuniary resources for property
disproportionate his known of source of income Section 13(1)(e) correspondents to
Section 5(1) of the POCA, 1947(old Act).

But they have been drastically amendments. under new clause, the real
concept of” known source of income” of and accuse to a large,’ extent.

The prosecution cannot be expected to know the affairs of an accused person.

This will be matters specifically within the knowledge of the accused, within the
meaning of section 106 of the Indian Evidence Act, 1872.

The legislature has advised used expression that satisfactory account. the
emphasis must be on the word “satisfactorily “and the legislature has, thus,
deliberately cast button on the accused not only to offer a plausible explanation as to
how he came by his large belt, but also to satisfy the court that his explanation was
worthy acceptance”.

In R.Sai Bharathi vs J.Jayalalitha the supreme court observed:” the criminal

law really prescribes the minimum standard of behaviour. While in public life, those
who hold high officers should not take shelter under the umbrella of criminal law but
stand by high probity. further, criminal law is meant to deal criminals ordinary.
persons in public life or expected to maintain very high standards of probity, and,
particularly, when there is likely to be even the least bit of conflict of interest between
the office one holds and the act to be done by such person, ought to desist himself
from indulging in the same.
 36

search standards of behavior was scrupulously observed in the earlier days

after independence, but those values have now dwindled and instances of persons
holding high effective officers indulging in self-advertisement by utilizing
government property are in distribution of The Largesse of the government to their
own favorites or for certain” quid pro quo” are on the increase. we have to strongly
condemn such actions”.

In this connection it is essential to refer the offense as specified under section

169 of I.P.C. section 169 specifies, that for the completion of offence under section
169 the following conditions must be fulfilled:

1. The person should be a public servant

2. Insert capacity he is legally bound not to purchase for bid for” certain
property”, and
3. Either his name or in the name of another or jointly, or in share with
others.

The offence under section 169 is incomplete without the assistance of some
other’ enactment, which imposes the legal prohibition required. Section 481 of the Cr.
P. C. Section 189 of Railways hacked, 1989 and section 19 of the cattle trespass act,
1871, and instances of that nature in several enactments are available in which
persons mentioned there in shall not directly or in-directly purchase any property at
Essel under those hats. That's it clear form a law as ordinarily understood, that is to
say, an enacted or a rule or regulation framed under such law. The rules
administrative instructions governing the public servants holding the civil posts have
no application in this case.

(2) Prevention of Food Adulteration Act:

The object and purpose of the POFAA (Act) how to eliminate the danger to
human life on the sale of unwholesome articles of food. it is enacted to curb the white
bread evil of food adulteration and he is a legislative measures for social Defense. it is
intended to suppress a social and economic Mischief an evil that attempts to poison,
for monetary gains, the vary sources of sustenance half life and the evil adulteration
 37

of food and its effects on the health of the community are assuming alarming
proportions. The offence of adulteration he is a socio economic offence.

The construction appropriate to social defense legislation is, therefore, one,

which would Sane the Mischief aimed at by the legislation and advanced. The
offences under the act are really acts prohibited by the police powers of a state in the
interests of Public Health and wellbeing. The prohibition is bad by the sanction of a
penalty. Intention or mental state is irrelevant.

In State of Orissa vs K.R.Rao the Supreme Court Defend the scope of the
prohibition against selling of adulterated food. The Court observed:” in the absence of
any provision, express or necessarily employees from the context, the courts would
not be justified in holding that the prohibition was only to apply to the owner of the
shop and not to the agent of the owner who sells adulterated food. The act is a welfare
legislation to prevent health hazards by consuming adulterated food.

The mensrea is not an essential ingredient. It is a social evil under the act
prohibits commission of the offence under the act.

The essential ingredient is sold to the purchaser by the vendor. It is not

material to establish the capacity of a. person vis-a-vis the owner of the shop to prove
his authority to Sale adulterated food exposed for sale in the shop. It is enough for the
prosecution to establish that the person who sold the adult rated article of food has
sold it to the purchaser”.

In Delhi administration vs Manohar Lal the supreme court held that High
Court, in exercise of its revisional jurisdiction, has no power to itself decide to
commute the sentence imposed under section 16/7 of the act under direct the Convict
to deposit in trail Court is specified sum as fine and inform the Government of such
deposit for formalizing the matter by passing appropriate order under section 433(d)
of Cr. P.C.

In state of Himachal Pradesh vs Narender Kumar the supreme court

observed:” the occurrence of adulteration took place nearly two decades back, and the
 38

courts below acquitted the accused, though erroneously. therefore, keeping in view
the nature of violation and the Peculiar facts and circumstances of the case while
sentencing the accused to undergo 6 months RI and rupees 1000, we make it clear that
if the accused knows the appropriate government to commute the sentence of
imprisonment the same may be considered subject to such conditions or terms has the
government may choose to impose.

For a period of 3 months the accused need not surrender to undergo sentence.
During this period it shall be open to him to move the appropriate government for
commutation. The fate of the order of computation, if, cell. if no order in the matter of
computation passed by the appropriate government, the accused shell surrender to
serve the remainder of this sentence”.

(3) Other Statutes:-

There are other statutes as well which deal with white collar crimes. for
instance, the conservation of foreign exchange and prevention of smuggling
activities(COFEPOSA) and smugglers and foreign exchange manipulators( forfeiture
of property)Act, 1976(SAFEMA) also deal with white collar crimes.

In Safyia vs Government of Kerala the supreme court observed that the court
could not lost sight of the fact that those who commit economic offences do harm to
the national interest and economy. The high court came to the conclusion that the
detenue has violated the provisions of the law (COFEPOSA) and his activities are not
in the larger National interest. The court should be show to come to the aid off the
detenue in such cases.

Similarly, in Kesar Devi vs U.I.0 the supreme court while upholding the
forfeiture of the properties of the offender observed:” the combined effect of section
6(1) under Section 8 is that the competent authority should always reasons to believe
that properties ostensibly in the name of a person to whom the act applies or illegally
acquired properties, he can issue | noticed that person.
 39

Thereafter, the burden of proving that such properties or not legally required
properties will be upon the person to whom notice has been issued.

Under the Scheme of the act, there is no requirement on the part of the
competent authority to mention or established any Nexus or link between the money
of the Convict or detenue and the property sought to be forfeited.

In the present case, the plant is the wife of the detenue and she has failed to
establish that she had any income of her own to acquire the three properties. In certain
circumstances, no other inference was possible except that it was done so with the
money provided by the husband”.
 40

4.1 REASONS FOR GROWTH OF WHITE COLLAR CRIMES IN INDIA

● White Collar crimes are committed out of greed. the people who usually cut
these crimes are financially secure.

●  # financial or physical duress

●  # White Collar crimes are estimated to cast society many times more than
cramps such as robbery and burglary. the amount of death caused by corporate
mishap, such as inadequate Pharmaceutical testing, for house members those
caused by murder.

●  # The emergence of cutting edge Technology, growing business, and political

pressures has opened up new avenues for this criminal organisations to
prosper.

●  # The increase is due to a booming economy and _ technological advancement

such as the internet and fast money transfer systems. laws enforcement is
sometimes reluctant to pursue these cases because they are so hard to track
and investigate.

●  # It is very difficult to detect has work holograms always committed in ​privacy

of an office or home and usually there is no | witness.

●  # But naturally a question arises that if we have specific legislations to trace

out White Collar criminality then why this offenders go unpunished. main
reasons for which these White Collar criminals are occupational criminals go
unpunished are
 41

i) Legislators and the law implementers belong to the same group or class to
which this occupational criminals belong;

ii) less police effort

iii) favorable laws;

iv) Less impact on individuals.

The Judiciary is equally, if not more, Guilty of dealing justice with white
collar crimes on the rise, it he is necessary for the Judiciary and police to distinguish
between white collar crimes, petty crimes and acts of homicide and violence.

Sending everyone to the same jail he is also unfair. India needs different
detention centers for different kinds of criminal misconduct. what this present
juncture what we need is the strengthening of our enforcement Agencies such as
Central Bureau of Investigation, the Enforcement Directorate, the Directorate of
revenue intelligence, the Income Tax Department and the customs department.
Concentration and distribution of national wealth must be done in a proper manner.

Speedy rail should be arranged by appointing more judges Central Vigilance

Commission must keep a constant vigil on the working of the top ranking officers.

General public must not avoid being engaged themselves in the prosecution of
the White Collar final has the orphans in general is directed towards them, there and
Guilty then deterrent theory of punishment is an option one.
 42

4.2 FEATURES OF WHITE-COLLAR CRIME IN INDIA

The white collar/ occupational- economic Crimes/ criminals in our country have some
important features

1. The result in social injuries for grater then conventional crimes where only
individuals are affected. However, these crimes/ Criminals have Generally been
recorded by criminologists as a class apart because the administrative,
investigative and judicial procedure for many of them have been different from
the procedure for violations of criminal laws.

2. A large number of these offenders are recidivists, though repetition is not

necessarily of the same type of crime.
3. The illegal activities (or White Collar crimes) follow more or less the same
model operandi.
4. A White Collar criminal does not lose he status Associates because it is not
considered a violation of the ‘business code’. In fact, many successful criminals
of this category or hailed as dynamic and innovative leaders of industry/ society.

Corporate crime. What | am trying to say is that the real cause of all white collar
crimes is to benefit financially. tre United States is an industrial economy which
produces great amounts of wealth. Americans are taught to Pride themselves on how
much money they have.

Because along with money comes power, privilege and status. Our culture
thrives on wealth, power, privilege and status; therefore it is the American dream.
 43

Many people will to whatever is necessary to achieve the American dream. Whether it
is robbing a bank or still credit card numbers that has been and will continue to be
done.

We are confirming to the values of our culture. Some people confirm in legal
ways and other two not. An unemployed High School pop out wants the same thing a
CEO wants which is money.

The institutional causes of White collar crime provide the means an opportunity
to commit the crime. an internal structure of a business can in many facilitate fraud.
those types of businesses are called criminogenic industries in which factors facilitate
fraud of course, employee of the business he is also a factor. The organizational
causes include both occupational and corporate crimes. organizational crimes are
committed by employees against their employers.

An example of an organizational crime he is embezzlement. Occupational crimes

are committed by the corporate officials in order for their Corporation to profit, |
which in turn their profit. An example would be accounting fraud. The impact of
White collar crime is enormous.

Not does up that was defrauded, but then the button is shifted throughout society.
Some examples of the people infected area as follows.

The original victim(s), their employer, law enforcement, tax payers, businesses
consumers and/or the environment. it is easy to see that White Collar crimes are not
only expensive to the original victim, but to society as a whole.

5. White Collar criminals feel and Express contempt for law, for government, and
for government officials. in this respect, they or similar to Mini professional
criminals.
6. Why ordinary can also afraid of enforcement agencies, White Collar criminals
are rarely so, because they think that on being detected, they may only be
transferred or fined or given short-term simple imprisonment.
 44

in spite of the fact that a large number of operational scams/ economic offences
have been unearthed in our country in the last few years like security scam, Hawala
scam, sugar scam banking scam, telecommunications camp fodder scam urea scam
etc in which thousands of crores of Rupees involved, surprisingly no a friend has been
convicted so for.

The accused persons against whom the cases are pending in the courts are yet to
be prosecuted and punished. We read in the newspapers of the systematic rights
conducted by the Income Tax Department and the enforcement directorate against
business tycoons but we never read anything about the prosecution politicians support
them for the funds they receive from them for elections and for filling up the personal
offers.

policeman do not take them into custody for the fear that they( businessmen)
might retaliate with quote action or might get them transferred by seeking help from
the politicians. The court also does not impose period punishment on this economic
offenders. in case of big capitalist (like Kirloskar), the judges grant bail by hearing the
case in their houses even at night.

In a majority of economic crimes, sentences imposed by the courts are

ridiculously mild. Generally, some ground for the benefit of the doubt is brought into
play on the accused is acquitted. Many White Collar offenders by the enforcement
personal and thus get out of the clutches of the law.

With such attitudes of politicians, the recent enactments and amendments in

statutes prescribing deterrent punishment to economic renders have come as a
pleasant surprise.

The amendment in the consumer protection act is a step in the right direction.
People are becoming increasingly concept of the fact that economic progress is
possible only if business is made to behave. The recent liberalization of the economy
aims to rid business and industry of the permit license.
 45

What is urgently required is the strengthening of enforcement Agencies such as

the Central Bureau of Investigation, the enforcement investigation, the enforcement
directorate, the Directorate of revenue intelligence, the Income Tax Department, the
customs department, and all other Agencies concerned with the enforcement of Fiscal
laws.

K. Madhavan is of the opinion that what for their needs to be stopped or selective
prosecution and the malafide of the government. Suppose there are 20 industries in a
particular line, out of which 10 are known to be committing a certain type of fraud, as
showing non existing stocks to banks in their cash credit accounts.

Crimes. so, the politicians create strict laws and sentencing guidelines for street
crimes. therefore, sales and presence are already so over crowded that” nonviolent
offender” or a lot less likely to be incarcerated. plea agreement, probation, home
detention, community service, restitution or much more common than incarceration
for offenders have White Collar crimes.

4.3 HOW WHITE COLLAR CRIME IMPACTS THE SOCIETY

What makes White Collar crime so tempting? One reason is that a person who steals
from a business then rationalize that his or her left will hardly put a Dent in the CEO’s
handsome salary.

In an episode of the television” The Simpsons”, Homer Simpson ration lies

committing insurance fraud by figuring that the only affair will be that his boss will
have to go without buying an "ivory back- scratcher”. Although white collar candles
might like to think that they ares cheating only high compensated executive, these
crimes can have a devastating ripple effect.

When a company's suffer from fraud from any source, it must make up for it
by rising costs, which ultimately means higher prices for consumers. it can also means
less pay for employees and even cutting jobs.

The effect can continue to repel when it comes to those employees or investors
who now find themselves unable to pay off loans, and credit harder to obtain. When
 46

stock fraud or insider trading scandals breakout, like they did in the 1980 in the
United States, it can cause invoices to lose faith in the stock market. Scandals like
Enron can also wipe out innocent employees retirement accounts.

Obviously, this kind of crime can have an enormous impact on society. The
eggs toll it has, however, he is hard to qualify, both because of the wild ripples and
the dilemma of finding accurate statistics.

Numerous factors make white collar crime statistics hard to come by. as we
discussed are here, no consensus exist on a definition, and people disagree on what
counts as a white collar crime. Even if there were a consensus, however, accurate
statistic or difficult together because the crime goes and reported and unpunished so
often. Enron and other published candles, it seems, are only the tip of the proverbial
Iceberg.

Even if fraud is suspected, there are no bloody footprints, no DNA evidence,

no eyewitnesses and no smoking gun. one cannot conclusively declare as in the board
game clue,” colonel mustard, in the kitchen, with the revolver”.

White Collar criminal’s male you only Complex paper trails that takes time
and skill to sift through. Now, without the growth of Technology and the rise of
internet, white colour computer crime is more rampant, but also more difficult to
solve.

Local law enforcement teams often find themselves ill equipped to track down
the criminal. The FBI has admitted that arrest rates for white collar crimes are
significantly lower than that for other type of crime.
 47

CHAPTER - V
WHITE COLLAR CRIMES
WITH SPECIAL REFERENCE
TO CYBER CRIME
 48

5. WHITE COLLAR CRIMES WITH SPECIAL REFERENCE TO

CYBER CRIME

5.1 CYBER CRIME

5.2 DIFFERENT TYPED OF CYBER CRIMES

5.3 CYBER TERROSIM AGAINST THE GOVERNMENT

ORGANISATION

5.4 STATUTORY PROVISIONS

5.5 PREVENTATIVE MEASURES

 49

5. WHITE COLLAR CRIMES WITH SPECIAL REFERENCE

TO CYBER CRIME

In the field of criminology, White Collar crime as according to Edwin

Sutherland he is” a crime committed by a person of respectability and high social
status in the course of his occupation”.

White collar is difficult to define because it can it committed by anyone with

money and apply to any different activities. White Collar crime is illegal activity
carried on within normal legal business transactions. For example, White Collar crime
comes from within legal businesses such as banking stock trading or Insurance claim.
White Collar crime is also nonviolent.

The main motive behind these white collar crimes he is personal gain.
Individuals or groups may use and abuse their positions within a company to hide or
steal money. White Collar crime can be committed by an individual or it can involve a
number of individuals in a large Corporation who deceive investors.

With them off white collar crime can be an individual; a group of individuals;
hey local organization who's this other secretly spends its money for his own benefit
(emblezzling); a company like a bank who's officer use its funds for their own gain;
the government cheated by the companies who win its contacts; or a large
Corporation whose officials purposely falsify its financial records.

White Collar crimes therefore overlaps with corporate crime and cyber crime.
The internet in India is growing rapidly. It has given rise to new opportunities in every
field we can think of- be it entertainment, business sports or education.
 50

There are two sides to a coin. Internet also has its own disadvantages. One of
the major disadvantages he is cybercrime- illegal activity committed on the internet.
The internet, along with its advantages, has also exposed us to security risks that come
with connecting 2 year law network. Computers today or being misused for illegal
activities like email espionage, spams, software piracy and so on, which invade our
privacy and offend our senses.

It is a saying that:

“The modern thief stole more with a computer than with a gun. tomorrow's
terrorist may be able to do more damage with keyboard than with a bomb”.

5.1.CYBER CRIMES

The term” cyber crime” in a broad term that is usually applied to a broad range
of crimes in which computers are, in some manner, involved. This term, however, is
vague and actually refers to a collection of dissimilar forms of criminal conduct that
are powered by different motives.

Every computer system is threatened by the large number of crimes which we

usually call Cyber crimes, but every computer system does not face and equal risk of
being victimized buy all of those crimes.

Any criminal activity that uses a computer either as an instrumentality, target

or a means for perpetuating further crimes comes within the Ambit of cybercrime
 51

As internet who says continues to rise throughout the world, the threat of
cybercrime also grows. While some of these crimes are relative Lee harmless and
commonplace others are very serious and carry with them felony charges,
 52

5.2 DIFFERENT TYPES OF CYBER CRIMES

Computer Viruses:-

Viruses are used by hackers to infect the user’s computer and damage data save on the
computer by use of” payload” in viruses which carries damaging code. Person would
be liable under the Act only win the consent of the owner is not taken before inserting
virus in his system. The contradiction here is that the certain virus’s causes temporary
interruption by showing messages on the three of the user but still it’s not punishable
under information technology act 2000 as it doesn't cause tangible damage.

But, he must be made punishable has it would falls under the Ambit of ‘unauthorized
access’ though doesn't cause any damage. This ambiguity needs reconsideration.

Punishing

It is an act in which the hackers, by using email messages which completely

resembles the original ones ask for the verification of shirt and personal information,
like or passwords etc here the customer might get deceived by the originality of that
message, with you if the information is used for fraudulent acts like withdrawing
money from customers account without him having knowledge of it.

Spoofing

This is carried on by use of deceiving websites or emails. this Mini website so

well by use of logos, names, graphics and even the code of real Bank’s site.

Phone Punishing

It is done by use of invoice messages by the hackers where the customers are
asked to reveal their account identification, and for figure with banks etc.
 53

Internet Pharming

Hacker here AIMS at redirecting the website used by the customer to

analogous website by hijacking the victims DNS server and changing his |.P address
to fake website by men plating DNS server. This redirect user's original website to a
false misleading website to gain unauthorized information.

Investment Newsletter

We usually get this letter providing free information recommending that

investment in which field would be profitable.

The will be huge loss if relied upon. False information can be spread by this
method about any company and can cause huge inconvenience or loss to junk mails
online.

Credit card fraud

Huge last May cause to the victim due to this kind of fraud. This is done by
publishing falls digital signature. Most of the people lost credit cards on the way of
delivery to the recipient or gets damaged or defective, misrepresented etc.

Spam

The most common type of cyber crime is spam. well email spam class half
yearly new, there have been lost on the books regarding” unsolicited Electronic
Communication” for many years.

Fraud

Credit fraud is another common form of cybercrime. Setting computer viruses

can log keystrokes on your keyboard and send them to hackers, who can then take
your social security number, credit and. this information will be used by the hacker
for his own means.
 54

5.3 CYBER TERRORISM AGAINST THE GOVERNMENT

ORGANIZATIONS.

Cyber terrorism may be defined to be” the premeditated use of disruptive

activities, or that treat their-of, in cyberspace, with the intention to for the social,
ideological, religious, political or similar objectives, or to intimidate any person in
furtherance of such objectives”.

Another definition may be attempted to cover within its impact of Cyber

terrorism. A Terrorist means a person who indulges in Fenton killing of persons or in
violence or in disruption of services or means of Communications essential to the
community or in damaging property with the view to

1. Putting the public or any section of the public in fear or

2. Affecting adversely the harmony between different religious, racial,
language or regional groups or cash or communities or
3. Coercing or overawing the government established by law; or
4. Endangering the sovereignty and integrity of the nation and a cyber
terrorist is the person who uses the computer system as a means or ends
to achieve the objectives. Every act done in pursuance thereof is an act of
cyber terrorism.
 55

Reasons for Cyber crime:

Hart in his work” the concept of law” said human beings vulnerable so his rule of law
is required to protect them’. Applying this to the cyberspace we may say that
computers are vulnerable so rule of law is required to protect and save got them
against cybercrime. The reasons for the vulnerability of computers may be said to be:

● Capacity to store data in comparatively small space

● easy to access

● Complex

● Negligence

● lose of evidence

5.4 Statutory provisions

The Indian parliament consider it as necessary to give effect to the resolution

by which the general assembly adopted model law on electronic commerce adapted
by the United Nations on trade law. As a consequence of which the information
technology act 2000 was passed and enforced on 17th May 2000. the Preamble of this
acts states its objective to legalize e-commerce and further amend the Indian Penal
Code,189,and the Indian Evidence Act 1872 the bankers book Evidence Act 1891
under the Reserve Bank of India Act. At 9 the basic purpose is to make them
compatible with the acts of 2000. So that they can regulate and control the affairs of
the cyber world in a more effective manner.

Provisions of IT Act 2000

Nature of punishment

Sec.43

Damage to computer system etc. compensation for Rupees 1 crore

 56

Sec.66

Hacking (with intent or knowledge) find of 2 lakh Rupees, and entertainment for 3
years.

Sec67

Publication of obscene material in |-Phone 5S 100000 rupees, and imprisonment of 5

years, and double conviction on 2nd offence

Sec68

Not complying with directions of controller find up to 2 lakh and imprisonment of 3

years.

Sec 70

Attempting or securing access to computer imprisonment up to 10 years.

Sec72

For breaking confidentiality of the information of computer fine up to 100000 and

imprisonment up to 2 years

Sec73

Publishing Falls digital signatures, falls in certain particulars fine of 1 lakh or

Imprisonment of 2 years or both. 50

Sec 74

Publication of digital signature for the Bridal imprisonment for the term of 2 years
and fine for 1 lakh rupees.

Analysis of the statutory provisions

The information technology act 2000 was undoubtedly a welcome step ata
time when there was no registration on this specialized field. The act has however
during has proved to be inadequate to a certain extent. Various loopholes in the act or

The Hurry, in which the legislation was passed, without public debate, did not
serve the desired purpose.
 57

“Cyber laws, in very Preamble and am, state that they are targeted at aiding e-
commerce, and or not mean to regulate cyber”

According to Mr Pawan Duggal the main intention of the legislators has been
to provide for a law to regulate The E-Commerce and when that aim the I.T. Act 2000
was passed, which may also be one of the reasons for its emergency to deal with cases
of cybercrime.

Positive aspects of I.T.Act,2000

Prior to the enactment of the I.T Act, 2000 given an email was not accepted
under the prevailing statutes of India as an accepted legal form of Communication and
as evidence in a court of law. But the IT Act, 2000 changed this scenario by legal
recognition of the electronic format.

From the perspective of the corporate sector, companies Shelly able to carry
out Electronic Commerce using the legal infrastructure providing by the IT Act 2000
which was not possible earlier because there was no legal infrastructure to regulate
commercial transactions online.

Corporate will now be able to use digital signature to carry out their
transactions online. This gave and Sanction under the IT Act 2000.

In today's scenario, information is stored by the companies on their respective

computer system, apart maintaining a backup. Under the IT Act, 2000, it shall not be
possible for corporate to have a statutory remedy if any one breaks into their computer
systems or network and causes damage or copies data. The remedy provided by the IT
Act, 2000 he is in the form of monetary damages, by the way of compensation, not
exceeding Rs1, 00, 00, 000

IT Act, 2000 has vs various Cyber crimes which include hacking and damage
to, the computer code. Prior to the coming into effect of the Indian cyber law, the
corporate work helpless as there was no legal address for such issues.

The Grey Areas of the IT Act, 2000

 58

The IT Act, 2000 he is likely to cause a conflict of jurisdiction.

Electronic Commerce is based on the system of domain names. The IT Act, 2000 does
not even touch the issues relating to domain names.

The IT Act, 2000 does not deal with any issues concerning the protection of
intellectual property rights in the context of the online enrollment.

As the cyber law is growing, so are the new forms under manifestations of Cyber
crimes. The offences defined in the IT Act, 2000 or by no means exhaustive.

The IT Act, 2000 does not cover various kinds of Cyber crimes and internet related
crimes. Certain crimes which don't come under the Ambit of the IT Act, 2000 are:-

● Theft of internet hours

● Cyber theft

● cyber stalking

● cyber harassment cyber defamation

● And cyber fraud etc

The IT Act, 2000 has not tackled several vital issues pertaining to E-Commerce
Sphere like privacy and content regulation.

Another grey area of the IT Act is that the same does not touch upon any anti-
trust issues.

The most serious concern about the Indian cyber law relates to its implementation.
The IT Act, 2000 does not lay down parameters are its Implementation. It seems that
the Parliament would be required to amend the IT Act, 2000 to remove the grey areas
mentioned above.

Investigations and Research procedures

Section 75 of Information Technology Act, 2000 takes care of jurisdictional

aspect of Cybercrimes, and one would be punished irrespective of his nationality and
 59

space of commission of offence. power of Investigation is been given a police officer

not below the rank of Deputy Superintendent UP Police or any officer of the central
government or State Government authorized by central government. he may enter any
public place, conduct Research and arrest without warrant person who is reasonably
expected to have committed an offence or about to commit computer related crime.
Accused has produced before magistrate within 24 hours of arrest. Provisions of
Criminal Procedure Code, 1973 regulate the procedure of entry, search and arrest of
the accused.

Problems underlying tracking of offence

Most of the times the apprentice commit crime and their identity is hard to be
identified. Tracking cyber criminals require a proper login forcing agency through
cyber border cooperation of governments, businesses and Institutions of other
countries. Most of the countries lakh skill law enforcement personal to deal with
computer and even prouder Information Technology related crimes. usually law
enforcement Agencies also don't take life seriously, they or, | even if that undertake to
investigate they are both with limitation of extraterritorial nature of crimes. 53

Measures to curb the cyber crime

Though Bypassing of time and improvement technology to provide he is here

and user-friendly methods for the consumer for make up their daily activities, it has
led to horse world of security threats at the same time by Agencies like hacker,
crackers etc various information technology methods have been introduced to curb
such destructive activities to achieve the main objects of technology to provide some
sense of security to the users. Few basic prominent measures used to curb Cyber
crimes are as follows:

A. Encryption:
 60

This is considered as an important tool for protecting data in transit. Plain text
( readable) can be cipher text ( coded language) by this method and the recipient of
the data Can decrypt hit by converting it into plain text again by using private key.
This way except for the recipient who's processor private key, to decrypt the data, no
one can gain access to the sensitive information.

B. Synchronized password:

This password or schemes, used to change the password at user and host
token. Unsynchronized card changes every30-60 seconds which only makes it valid
for one time logout session. other useful methods introduced are signature, voice,
fingerprint identification or retinal and biometric recognition etc. to import passwords
and pass phrase.

C. Firewalls:

It creates wall between the system and possible intruders to protect the
classified documents from being licked or accessed. It would only let the data tp flow
in the computer which is recognized and verified by one’s system. it only permits
access to the system to ones already registered with the computer.

D) Digital signature:

This is created by using means of cryptography by applying algorithms. This

has it’s from any news in the business of Banking where customers signature in
identified by using this method before banks enter into huge transactions.

5.5 PREVENTIVE MEASURES

Prevention he is always better than cure. Sore free precaution while of the.
Shailesh Kumar zakhar, technical advisor and network security consultant to the
 61

Mumbai Police cyber crime cell, locate the5P mantra for online security: precaution,
prevention, protection, preservation and perseverance. “take security seriously”, he
says.” if you protect your customers data are, your employees privacy and your own
company, when you are doing your job in the Grand scheme of things to regulate and
enforce rules on the net through community.” a citizen should keep in mind the
following things:-

1. To prevent cyber stalking, how wide is following any information

pertaining to one-self.

2. Always avoid sending photographs online particularly to strangers and

chat friends as they have been incidence of misuse of photographs.

3. Always use latest and update antivirus software to guard against virus

attacks

4. Always keep backup volumes so that one may not suffer Data loss in

case J of virus contamination.

5. Never send your credit card number to any site that is not secured to

guard against fraud

 62

6. Always keep a watch on the sites that your children are accessing to

prevent any kind of harassment or deprivation in children.

7. It is better to use a security program that gives control over the cookies

and send information back to the site as living the cookies unguarded

might prove fatal.

8. The website owners should watch traffic and check any irregularity on

the site. Putting host based intrusion detection devices on servers may do

this.

9. Use of firewalls may be beneficial.

10. Web server running public site must be physically separate and protected

from internal corporate network.

 63

 
 
CHAPTER - VI 
WHITE COLLAR CRIMES ARE 
WIDE SPREAD IN SOCIETY 
 
 
 
 
 
 
 
 
 
 
 
 64

 
 
 
 
6. WHITE COLLAR CRIMES ARE WIDE SPREAD IN SOCIETY

6.1 INTEGRATED POLICY WITH STREET CRIME & WHTIE COLLAR

CRIME

6.2 PROTECTION FROM WIHTE COLLAR CRIME

6.3 CONCEPT OF WHTE COLLAR CRIME

6.4 CHALLENGES TO THE JUDICIAL SYSTEM

 65

6. White Collar crimes are wide spread in society

White Collar crime and its consequences are recognized from centuries which
categories number of crimes. Mostly business and government professional are
involved in series of rods termed as White Collar crime because these are creative,
comparatively risk free, and the nearly socially up to standard. due to high accuracy of
these crimes, security officials plan modern technique to fight back through
prevention, in and. when the term White Collar crime is converted, people are
encouraged to think decisively about the nature of crime, law, and criminal justice.

In the criminal justice system, before the if on the of. if it is viewed from same
legal height of the state, the crimes of the powerful or hidden. White Collar crime is
defined as” those illegal acts which are characterized by the side, concealment or
violation of trust and which are not dependent upon the application or threat of
physical force or violence.

Individuals and organizations commit this act to obtain money, property or

services, to avoid the payment or loss of money or services, how to secure personal or
business advantage. Generally the White Collar criminals commit range of roads to
get personal financial gain. White Collar crimes do not show any vicious activity, but
the extent of this rhymes for symptoms and it can bring about great economic laws for
companies, investors.

Computer fraud is characterized as the crime committed to perform a plane or

illegal activity and the targeting of a computer, with the intention to modify, damage
or put out of action the data of computer system. There are many examples of crimes
which include offering

Missing goods of costliest government fraud to a buyer, Still in someone's

funds by hacking into his band or credit card account. Hacker find passwords and
delete information, create programs to steal passwords, or even rummage through
 66

company garbage to find secret information. Embezzlement is another type of White

collar crime, where paper Charges of embezzlement can even believed if the am
bachelor intended to return the property later.

Employee theft is most common example of embezzlement. Company

employees can have access to company property so they can easily misuse the
property. Numerous examples can be quoted Sachin left of retail items, discounted
sale of retail items, left from cash registers.

Healthcare frauds are a stereotypical white collar crime in which highly

qualified medical practitioners and health supervisory abuse their course and
professional skills through misleading nonviolent tactics such as fake bills for
individual financial gain.

Environmental crimes are the infringement of laws which are made to protect
the environment and human health. Littering, improper waste disposal, oil spills,
destruction of wetlands are some of the environmental crimes. Perpetrator of
environmental law violation is fined, put on experimentation, sent to Jail. Financial
crimes are major White Collar crimes.

These are any non violent felony that is committed by or against an individual
or corporation and lead to great fiscal loss. These broads include tax evasion, cheating
of company funds, and the sale of fictitious insurance plans.

Another category of serious White Collar crime he is government fraud, which

is an unlawful act that deliberately rid the Government of funds through trickery.
When the government gets fiddled, taxpayers pay the price. Procurement and
contractor fraud are examples of costliest government

Criminal use of personal information of another in order to commit fraud.

Crooks of this type of crime have to face heavy penalties if trapped. Insurance fraud is
very common in which offender forged claims an insurance company, personal injury
and property damage claims that or overstated in order to collect extra
 67

reimbursements. Mail fraud is committed by using Postal service or any private or

commercial interstate mail carrier, such as mailboxes etc.

Money laundering is a felony in which lawbreakers hide the resource and

objective of illegitimately acquired funds. Public caption is an act of violating the
public official’s duty of Faith towards his or her society.

Anyone who has elected by hired, or employee of a constituency of citizens

comments crime on the state, or local level when an official takes favorable decision
in exchange of offered some value. Securities fraud is committed by white call
criminal such as Corporation, broker dealer, analysts, and private investors when the
executor intentionally receives investors for financial profits.

The help of tax evasion deliberately and illegally avoid paying mandatory
access to the government. telemarketing Fraud fall under white collar criminal in
which wrongdoer make some plan that uses telephone contact to fraudulently rid its
victims of funds or assets. The frauds are prize offers and sweepstakes, magazine
sales, credit card sales.

In today's Hi Tech world, White Collar crimes are creating a serious trouble
for government. People who commit White Collar crimes are sometimes the same
kind of people who are in a position to see to it that their crimes are not defined too
detrimental.

While the impact of White collar criminals leave an immense impact on the
nation but the cost to each individual he is petite. Practically it is observed that no
effort from police department goes into skirmishing White Collar crime.

Our social system is corrupted by number of white collar crime and it is a

great challenge for a Discover suitable resolution to the increasing manner of White
collar crime. This crimes or directly affecting the economy of the nation and the
public’s confidence, therefore corrective action must be taken immediately
preventing, detecting, investigating and prosecuting economic crimes in order to
 68

minimise their outcome. Main blockade Phuket to the bottom of the White Collar
crime hazard is that the public he is not aware of its seriousness.

It is more important to create wakefulness and businesses, and the Nation’s

lawmakers must be convinced with its significance in identifying that such Hi-Tech
and economic crimes have an undesirable effect on society.

Mostly people or innocent and they are not aware of the degree to which their
lives, financial status, businesses, families, hot privacy might be pretentious by
electronic crime. A rock-hard inspection or accounting background is obliging to
detect White Collar crime because swindler's are very clever and they can manipulate
the. situation very well.

6.1 Integrating policy with Street crime and white collar crime

Street crime and white collar crime are both internal and device a plan to
affect someone negatively, other than yourself. Generally, Street crime is more violent
in nature when compared to White Collar crime. However, White Collar crime can
have more devastating effects mentally and emotionally, when compared to Street
crime which has similar effects but can also represent negative physical effects as
well.

The penalties involving White Collar crime and Street crime tend to be the
same sort of parchment, but the length of the time and commitment is highly versatile
some examples of penalties for punishment for committing a white collar crime or
sweet crime include” large files home detention, come, cause of prosecution,
forfeitures, restitution, supervised release, and imprisonment”( criminal defense
advocates ,2008). When comparing the two types of crime and taking a deeper into a
societal problem one must ask themselves, which crime affects society wrose White
Collar crime of street crime?

Street crime offenders tend to come from lower socioeconomic status(

generally speaking) when in comparison with white collar criminals. According to the
book, White Collar crime and criminal careers, it states” unlike most Street criminals
 69

White Collar offenders are often employed and may have conventional career
histories”. however, one misleading question ask myself through this research is...
should White Collar crime and Street crime be categorised together or separate? in my
opinion, both have detrimental effects, but Street crime have a sudden shock value
and fear attached with the meaning.

In most cases, Street crime is an international violent offence, which can result
in a traumatic death of innocent victims. On the other hand, White Collar crimes can
result in death, but in most cases it is due to the use of substandard use of equipment
construction materials. The two types of crime should not be categorised together
because it have different meaning behind the crime committed.

Crime is international and most of the time well planned ahead of time. The
offender often forget the right victim who is vulnerable and defenseless: this was the
offender The Victim will be submissive to the terminal at to avoid any potential harm
to themselves. There could be several victims and still offenders taking place in White
Collar crime, however the potential danger lies within financial constraints and
emotional stability. In street crime, the danger can be physical, emotional, mental and
financial; results can end in life threatening injury or death.

Street crime has left it concerns and white collar crime as financial concerns;
without safety or financial stability by use of US citizens will become unstable and
more crime (of any type) will be committed in order for survival take place. If people
have family that need to support, parent/ guardian will do anything it text to provide
for their family; which can lead to meeting Street crimes in order to obtain an income
for financial stability.

White Collar crime is the route to most crimes committed in the United States.
For an example, if you have a financially stable family making well over they needed
income and wife/ mother in the family come it's a white collar offence of, bribery and
corporate embezzlement; the family will have higher risk of being financially ruined.
The two spouses might have to Resort to burglary, robbery or other Street crimes in
order to provide for themselves.
 70

According to Su Epstein, 10ethnic or racial groups may get arrested or

convicted more than others due to prejudices within the criminal justice system,
however this is not an indication that the group commits more crime”, and this
situation proves to be true within social class as well.

Social inequalities exist within Street crime, White Collar crime and the
offender is prosecuted. Social class, gender, race and ethnicity place a large role in
weather crimes are prosecuted fairly or whether the centre will receive a “break” and
be let off the hook for the crime committed.

Inequalities still exist in street crime and white collar crime, but both are
equally harmful to society hand present danger to society.

Background information on: White Collar crime

Non violence is the word, when most individuals ponder of White collar crime. it is a
criminal offence that is non violent in nature and usually involve deception, lies, fraud
to obtain business-like or profit -related outcomes. White Collar crimes happen over a
substantial period of time leaving evidence along the way, which is generally used in
prosecution of suspect. White Collar crime affects 1 out of every

American households, and this is suspected to be even higher, many returns do not
report the crime; this fear nothing will be done to help her/his case against the
suspect( Einstein law 2008).

A variety of White collar crimes are committed within the United States and the most
individuals feel they have not been a victim, when Evidence they had. White Collar
crimes in seriousness, such as” embezzlement, bribery, larceny, extortion, fraud, price
fixing racketeering, computer fraud, obstruction of Justice, perjury, Securities and
commodities la violations, and environmental law violations”.
 71

White Collar crime is the leading non violent crimes committed in the United
States. Victims of feel their lives have been invaded and have no legitimate privacy of
their personal lives; this is often true concerning identity theft and robbery.

The victims are losing the sense of privacy as is gaining their victim's lose.
Accident do not occur in White Collar crime, the act or purely driven by greed,
potential profit gain,(keel,2008). Other characteristics are associated with white collar
crime, such as the crime is created over an extended period of time.

The founder of Honda corporate crimes are rarely ever “prosecuted and
convicted”, due to the amount of money it would cost taxpayer to convict a white
collar criminal (keel, 2008). If convicted. Of a white collar crime, the punishment he
is usually solved with a money penalty, probation, or a light prison sentence.

White Collar crimes can result in accidental injury or even death; depending
on the type of cooperation, such as a construction company using substandard
building materials. If a worker would accidentally day on the job or if an individual
lives in an apartment complex built of substandard material, and he/ she would die
because of a construction building error; this would all be considered White Collar
crime. In most cases it is intentional manslaughter, so the corporation would receive
money penalty or a light prison sentence.

White Collar crime is categorized as a non -violent crime involving a potential

again for profit. Also, hit can cause not intentional physical injury or even accidental
death. Of be in tends to go on unnoticed with the amount of violent | crimes been
committed in the United States. .

Background information on: Street crime

Pattern of Street crimes seems to be a likely stereotype, but on many cases the
pattern pros to be correct. Street crime is terrifying because it has a certain amount of
shock value when occurrences consistently happen in a community. statistics show
that” more crime committed by men done by women”, this does not mean women are
not offenders; however, Offenders Generally male decent.
 72

Street crimes include a wide range of offences both violent and non violent in
nature. For an example, violent offences would include rape, robbery, homicide,
gangs and drug related incidences can be linked to Violet Street crimes. All Street
crimes have the potential to be violent, but there

Are some non- violent categorized Categories crimes; such as, property
offences, Auto Theft, burglaries and petty theft.

Generally Street crime offenders will begin their planning and practices at an
early age known as “delinquent “offenses, which are becoming more violent in nature
because of the high number of gang members who are still juveniles
(Valdosta,2009).When a member of a gang must commit to his / her fellow members
he/she must show them trust and dedication. In the most cases, |mean committing a
violent crime, also. known as a “street crime”, or must endure a painful initiation
process with pain inflicted on his/her self. According to the Sustain, ratial back
ground can be one of the most influential factors in regards with street crime.

The bureau of justice statistics shows that in the years between 1976 to
2005,African American or “black” individuals have some of the top rated a homicide
percent in “ felony murder, drug related, gun homicide, and argumentative
circumstances”. However, black victims tend to be pointed out ata much higher rate,
due to racial inequality within the United States. On the other hand, when comparison
plan in comparison With white offenders, The Bureau of justice statistics report
findings that white individuals of non Hispanic descent also have some of the top
rated homicide percent sin in” intimate homicide, family home inside, infanticide,
elder-side, sex-related, gang related, workplace, arson and poison”.

The statistics presented accurate through the year 2005, and the data shows
that most of the websites committed work | interracial, did not result in a race
inequality, also known as “nate crime”.
 73

Street crime does not affect every individual, under “ Attack ’of a Street crime
is unexpected in nature. Victims of street crime have one commonality among them.
They never thought it would happen to them until it did. Now, some victims

Try and speak out to other potential threat to keep their guard up and never
think it would not happen to you.

6.2 Protection from White Collar crime

crime insurance

Henry Ford, the genius entrepreneur of the last century, described his idea of
doing business in a simple manner.” a business that makes nothing but money is a
poor business”, he said and the behemoths of the financial world, both in India and
abroad, had realized this statement to be true.

Instead of short term goals and profits, hey sound corporate philosophy,
internal transparency and ethical practices make a venture successful in the long run.
all the modern day business Empires have ensured this vital internal health software
companies through an exhaustive grid of checks, audits and supervision but there
always have been those who have been able to sleep through the cracks in the system.

corporate fraud has been and volte in MI of every business house and in India
where the economy has been growing rapidly in the last few years has reported hair
growing number of such cases not only raising anxiety in the mind of investors but
also affecting the company's reputation, confirm and its profit. in the past few years,
the rate of crimes uncovered in the financial, Banking and Insurance sector show
some distributing trends.

The biggest corporate fraud so far has been the one which shook Satyam
Computer Services Limited, a scandal that cause loss to the investors to the tune of
rupees14, 162 corer. The proud was perpetrated by in flipping the revenue of the
company true false sales protection from White Collar crime insurance Corporate
fraud has been enrolled in May of every business house and in India where the
economy has been growing rapidly in the last few years has reported a growing
 74

number of such cases not only racing anxiety in the mind of investors but also
affecting the company's reputation, confidence and its profit.

In the past few years the rate of crimes UN covered in the financial, banking
insurance sector show some distributing trends. Optima insurance brokers invoices
and showing corresponding games by forging the bank statements with the collision
of the solitary and internal auditors of the company.

When the primary accused confused two India's biggest corporate fraud,
Mahindra Satyam, formerly Satyam computer services, lost almost 25-30% revenue
between January 7 and April13, 2009 shock that not many other forms would have
been able to bear.

In another recent scandal saw a former managing Director and Chief operating
officer of Reebok India being accused of setting up secret warehouses of stolen
products in Delhi, fudging accounts hand making fictitious sales causing a loss of
rupees 870 corer to the company. In retail sector tool, Well known companies such as
the kids wear brand Lilliput and grocery in Subhiksha also shared serious cases of
accounting fraud.

Even financial power houses are susceptible to these crimes as seen by the case of a
formal relationship manager of City-group Wealth Management who had allegedly
diverted funds to the tune of 4 rupees 300 corer customers non customers of Citibank
into personal accounts and had been investing in the equity market for over a year,
before he was arrested in December 2010.

The threat of a financial fraud would be much more for a small scale, in
independent but the awareness level of Indian businessman and Management about
these policies he is Limited thereby exposing them to the serious ramifications of any
perpetrated crimes.

A crime insurance policy protects employees from dishonest acts of

employees and provides cover for direct financial loss of money, securities and
property.
 75

Lifeline in case of such eventualities, the policy coverage includes theft,

disappearance and destruction, and a multitude of fraudulent acts which include
forgery or counterfeiting in of money & securities, fraudulent alteration of payment
instructions, fraudulent use of corporate credit or debit card, computer fraud and fund
transfer fraud. Any action of a previous employee that helped him a benefit at the cost
of monetary loss who is company is guarded against effectively by this policy. The
policy also covers a very wide spectrum of people include part time or temporary
employees, students for volunteers under the insured’s supervision, trustees, fiduciary
or an administrator of any plan for project.

In the modern global scenario of connected Network and the threat of database
hacking by anonymous cybercriminals, the policy be customized to a great extent and
they can cover frauds situated by not only employees but also thought for peace and
unidentifiable employees. However, also serve the employer when to understand the
shirt and grey Areas where standard crime insurance doesn't extend its cover.

The insurance would not be able to come to your rescue if the’ accused
employee’s actions should not earned him a financial benefit and has caused only
consequential loss (delay or loss of future trading) and not direct financial loss to the
company. Similarly, you death to the company, if the malicious intent of the
employee is not proved and he doesn't make a direct benefit himself, the policy,
doesn't apply.

Also, free information, trades inter are not covered under the standard crime
insurance policy and any Corporation design of guarding against these singular threats
must ask their insurance to design IMO Customized policy to suit the need. Crime
insurance policies are the last line of defense of any business entity against an attack
from within.

6.3. Concept of White collar crime

The concept of White collar crime was introduced for the first time in field of
criminology by Prof Edwin Sutherland in 1941. Find white collar crimes” crime
 76

committed by persons of suspect ability and Hail social status in course of their
occupation”.

Misrepresentation fraudulent advertisement, engagement of that and,

copyright and trademark, etc our frequently resorted to buy manufacturers,
Industrialists and other person of refute in course of their business with a view to team
huge profits.

Other illustrations of White collar chronology include publication of falsified

balance sheet of business. Passing of goods, concealment of defects in the commodity
for sale etc.

This white collar crimes By Nature are such that the injury or the damage
caused as a result of them he is so widely diffused in the large body of citizens that
their gravity as regards individual victim is almost negligible.

White Collar criminal it has a closer affinity which is the attitudes and values
of culture in a particular society.

This is evident from the fact that White Collar and are intelligent, stable and
successful and a man of high social status as compared to the ordinary criminal. They
are four sided persons belonging to the prestige group of society.

The White Collar crimes which are committed in business world or indirect
and anonymous and difficult to detect. As against this, ordinary criminals commit
crimes which are direct and involve physical action like beating, remove the property
of use of force etc.

This may also be called’ blue collar crime’ and or more common with the
unprivileged class while the White Collar crimes committed by the members of
privileged group who belong to opposite of society. Professor Sutherland, however,
 77

suggests that class position by itself is not determinant of the White Collar or Blue
Collar crime.

this contention finds support in the fact that even the most privileged and the British
person may commit heinous crime such as Murder, rape or kidnapping for which they
are liable to be severely punished while on the other hand, most under Privileged
persons may be involved in a white collar crime, like employment, corruption or
misrepresentation which may not entail them severe penalty.

It is, however, erroneous to think white collar crimes or petty offences because
they do not carry major punishment.

Undoubtedly the pain allergies Hitherto confined their attention to prevention

of ordinary predatory crimes but the recent penal programs sufficiently indicate that
Emphasis has not shifted suppression of White collar criminality with equal vigour
and strength.

The Recent amendments introduced in the Indian Company Law, insurance

and banking laws, the appointment of Lokpal and tightening of government control
over private business groups sufficiently reflect open the government's date process
firm determination to suppress white collar criminality in India.

The problem of White collar criminality has its roots in competitive attitude of
the business community to outside their rival competitors in order to earn huge
profits. It may, however, be suggested that such crimes are sometimes committed me
early for the sake of necessity.

Most of the private educational institutions in India which receive public aid
furnish false accounts only for the sake of retaining the resistance. In spite of the
prescribed code of ethics. Set for the practicing lawyers, the very nature of their
profession involve the spirit of combat and necessitates them to Resort to concealment
or misrepresentation of facts, which, if detected entail Severe punishment.
 78

The members of privileged class or social status have a tendency to furnish,

OLX and fabricated accounts of the income of property to avoid payment of heavy
taxes or to claim tax exemptions.

White Collar criminality is also rampant in insurance business where both the
insured as well as insured make considerable profit by making false and fabricated
claims.

Instances or not wanting where international house burning, automobile

distraction and even murder are planned by the persons of respectable community for
the sake of making good fortune for themselves.

Other areas of White collar crime or malpractices in the medical or

engineering profession, adulteration of food and drugs, hoarding, black marketing
Monopoly” and pictures of trust etc.

It must be noted that social and limits the concept of White collar Crime only
to those unlawful activities by persons of prestigious group which the Undertaker for
financial gains in course of their legitimate business or occupation and the crime
committed by these persons for other purpose do not fall within this category.

No distinction in terms of social status, occupational activity, attitude or

gravity of consequences can separate White Collar crimes from those of traditional
crimes.

The only distinguishing feature of this type of crime he is the Temptation for
considerable material gain with little or no loss of status.

This gain gives a misleading impression that the executive and judicial
authorities who are concerned with the prevention awesome react favourable to the
upper and Middle Class society and disposed of what collar criminals with mere
censures or admonition while other criminal are subjected Toshiba penal sanctions
under the law without be given any pre warning.
 79

6.4 Challenges to the judicial system

There are three main challenges to the judicial system. The first challenge
concerns the standardization of each type of White collar crimes. The second one
focuses on the entire, their characteristics and position in the status quo. Lastly, Ill.
challenge is on devising and embossing sanctions to the offenders.

There is a challenge for the judicial system or device detailed standard of each
and every type of White collar crimes rather than relying only to generate definition.
This standard can facilitate arrest, conviction, judicial court hearings and conviction.
This can also encourage the damaged parties to condemn the act and defenders rather
than the lost or damaged properties only.

This can also help the judicial system to stand firmly against the violations in
spite the fact that majority of the offenders are members of the higher end of the status
quo.

The second challenge to the judicial system is to ensure equality and that
justice is rightfully served. Since White Collar crimes or professional crimes, it is
expected that the offenders are powerful, influential and obtains high regards. This is
a challenge to the Judiciary system to be at the side of justice and avoid from being
offenders of the same crime such as bribery or obstruction of Justice.

Lastly, there is a challenge to creator composer heavier sanctions to offenders

of White collar crimes. After all, these are labeled as crimes, no different from violent
crimes that need to be punished by criminal imprisonment and not just financial find
un-freedom to do violations again.

A Call to the Public

Lastly, to talk content that such as much as we as can come to the violent ones.
Let us not tolerance to the amount of the fraud, for example, let us begin to content
that itself and not the amount of damage because anything big started to do minute
 80

too. Small time camera today may be big time offender of tomorrow. Hence, we need
to lessen the attempts by showing firm contempt because absence of this he is as good
as encouraging the offenders.

Moreover, we should be critical to protect ourselves too. In the case of internet

fraud and alike, we need not to relay on the police and the government to protect our
properties. We need to be as critical and watchful so that we will not be victims. We
keep our personal information confidential to prevent frauds.

Absence of venerable prospects is as good as lessening the crime. We can

cooperate to authorities such as those who protect us from internet fraud. Likewise,
voting wisely can also help to listen the occurrence of graft Honda corruption,
embezzlement and money laundering.

Lastly, we ourselves should not be the offender. Let us not commit to

Burberry because the crime does not only involve the one who accepted but also the
one who initiated the deal. Insurance and health care fraud or also amazing to others
who may need more that we need. Hence, we can get what is truly allocated for our
use.
 81

CHAPTER – VII
ECONOMIC CRIMES 
 82

7. ECONOMIC CRIMES

7.1 STATISTICS OF ECONOMIC CRIMES

7.2 INDIAN LEGISLATION TO DEAL WITH MONEY LAUNDERERS

7.3 SURVEY7 ON ECONOMIC CRIMES IN INDIA

 83

ECONOMIC CRIMES

Economic crimes in India, like else-where, are linked to several other

offences, or even organized crimes, having bearing on national security. Every day a
greater degree of sophistication is being noticed in the activities of the criminals
indulging in these activities.

There is a growing recognition in the world that the economic offences are,
many times, part of other serious crimes posing serious threat to the security of the
nation. Problems such as international terrorism, narco terrorism, money laundering,
IPR violations, cyber crimes, import of hazardous substances etc.

Continue to occupy centre stage as the global threats. A multipronged

approach by various arms of the Government could help in effectively dealing with
this meance.

Besides the investigating agencies, Auditors could play a significant role in

their prevention and detection. Through a thorough understanding of the key areas of
risk and modus operandi adopted in committing the crimes, Auditors could effectively
plan their audit engagements focusing on the identified areas of risk.

In pursuance of the institute’s endeavour to bring out quality reading material

on issues related to the subject of its specialization i.e Audit of Fraud and Fraud
Detection Techniques and Forensic Audit, this compliation of selected readings on
‘Economic Crimes’ has been brought out. This compliation seeks to provide a broader
perspective so as to further enhance the understanding of the subject. 76

7.1. CHARACTERISTICS OF ECONOMIC CRIME

 84

It is important in the first instance to understand the nature of economic crime.

Economic or white-collar crime, as it is generally referred to, is a crime committed by
a person of a certain social status in the course of his occupation. The economic crime
occurs as a deviation from the violator’s occupational role.

Also, most of the laws involved or violated are not part of the traditional
criminal code. Such crimes are corruption, corporate fraud, public fraud, tax evasion,
goods smuggling, stock manipulation, currencies forgery, credit card fraud,
environmental crime, intellectual property infringement and the more recent
phenomenon of cyber crime.

These crimes are different from traditional crimes in the characteristics of their
objective and modus operandi. The traditional criminal steals small sums of money
and often uses brute force and conventional tools to achieve his aim. On the contrary,
a criminal committing an economic crime steals large sums of money and employs
technology and communications to carry out unlawful commercial transactions,
disturb databases or orchestrate massive frauds.

His victims are ignorant and native and often remain unaware of the fact that
they have been cheated.

Another characteristic of economic, commercial, corporate of white-collar

crimes is that they are often perceived as ‘good business’: and good business often
requires ‘cutting corners’.

Legal violations by corporations are often viewed as part of the business

system, much like industrial spying or psychologically suggestive marketing
techniques. These activities are considered as an extension of the

Capaitalist system based on profit and a technical adherence to the letter rather
than the spirit of the law.

Such crimes are, however, very costly for our society. In contrast to
conventional crimes, which affect specific individuals, economic crimes affect society
 85

as a whole. For instance, false advertising induces the public to invest in products
that do not have the desired effect.

Unsafe drugs, pesticides and food additives affect the health of thousands.
Exposure to industrial hazards such as unsafe equipment and poisonous materials and
emissions have and adverse effect on workers’ longevity. That is because many forms
of economic crime are relatively invisible, compared with violent crime, for example.
The effects on society of economic crime are hidden as public fear and concern are
heightened in cases that affect personal security more directly.

A significant proportion of transnational organized crimes assume the nature

of global economic crime. Proceeds of transnational crimes such as drug trafficking,
extortion, corruption, tax evasion, arms smuggling, terrorism, and fraud have to be
laundered. The international economic threat, posed by Global Organized Crime, in
an increasingly global economy is among the major “new”, threats to national
security.

Global Economic Crime does not just affect a select group of financial
institutions or regional areas; it affects international financial networks and economies
at a national debt problems because the large sums of money are then lost as tax
revenue to that country’s government.

Global Organized Crime can have a damaging effect on political structures,

especially fragile democracies and developing economies. As people feel that the
government is powerless to stop organized crime, they turn to crime leaders for
protection and political instistutions begin to deteriorate.

Economic crimes have mushroomed in many countries, especially those that

are in the process of economic, social or political development. A number of
difficulties arise in the investigation of such offences.

The first is that of definition: for instance the characteristics or constituents of

‘illegal monopolies’ or ‘manufacture of unfase products’.
 86

The second is the determination of responsibility: whether it is that of the

corporation or the individuals within it. Thirdly, it is often very difficult to prove the
intent to commit a crime. Lastly, and perhaps, most importantly, the public, although
it is becoming increasingly aware of the such crimes, is largely apathetic, and even if
in some cases it is concerned, is unable to put pressure on the government leaving the
issue to a few consumer protection groups.

Cooperation among Global Organized Crime groups has increased as

restrictions have lessened between international borders. These foreign havens for
criminals and their assets have made it increasingly difficult for Law Enforcement to
trace illegal profits; gather evidence on the criminal leaders; and identify and

Contain criminal groups. These global networks allow organized crime groups
to greatly increase the profits of their operations and their methods of evading local
governments as they share information, skills, costs, market access and relative
strengths.

Financial transactions, while being perfectly legitimate, are extremely

complex and involve the financial systems of many countries. Financial markets
operate with speed due to modern communications and electronic data processing 79

And create an impression of impropriety. Caution has to be exercised in

regulating financial and economic activities in such a way that they foster free
competition and do not stifle it through over regulation. In other words, a balance has
to be struck between the regulatory and legislative systems.

7.2 INDIAN LEGISLATION TO DEAL WITH MONEY LAUNDERERS

Presently, legislation to deal with such offenders is specifically intended to

deprive offenders of the proceeds and benefits derived from the commission of
offences against the laws of the country.
 87

It provides for the confiscation or forfeiture of the proceeds of assets used in

connection with the commission of certain crimes. The concerned Acts in Indian
legislation are:

i. Criminal Law (Amendment) Ordinance, 1944;

ii. Customs Act, 1962 (Secs. 119 to 122);

iii. Code of Criminal Procedure, 1973 (Sec. 452)

iv. Smugglers & Foreign Exchange Manipulators (Forfeiture of Property) Act,

1976;

v. Narcotic Drugs & Psychotropic Substances Act, 1985 (Sections 68-A to 68-Y)

vi. In addition, Indian statutes also contain provisions for preventive detention of
foreign exchange racketeers under the Conservation of foreign Exchange and
Prevention of Smuggling Activities (COFEPOSA) Act, 1974, and of the drug
traffickers under the Prevention of Illicit Traffic in Narcotic Drugs and
Psychotropic substances (PITNDPS) Act, 1988.

For this purpose, the Government of India has set up the following Investigating
Agencies that function under the Department of Revenue in union with the Ministry
of Finance.

The Central Economic Intelligence Bureau

An apex intelligence and coordinating body, the Central Economic

Intelligence Bureau was set up with the intention of coordinating and strengthening
intelligence gathering and investigative efforts of all agencies enforcing economic
laws. Accordingly, the Bureau collects intelligence regarding aspects of the black
economy the require close watch and investigation as well as the emergence of new
types of such offences and evolves counter-measures required for effectively dealing
with existing and new types of economic offences.
 88

It acts as the nodal agency for cooperation and coordination at the

international level with other customs, drugs, law enforcement and other agencies in
the area of economic offences. It implements the Conservation of Foreign Exchange
and Prevention of Smuggling Activities Act, 1971.

The Directorate of Revenue Intelligence

The Directorate of Revenue intelligence is concerned with Customs related

offences and collects intelligence about smuggling of contraband goods, narcotics,
under-invoicing, etc. through sources. It analyses and disseminates such intelligence
to its field formations for action and keeps a watch over

Important seizures and investigations. It also functions as the liaison authority

for exchange of information among ESCAP countries for combating international
smuggling and customs frauds and liaisons with foreign countries, Indian Missions
and enforcement agencies abroad as well as with the CBI and INTERPOL on anti
smuggling matters. Cases are referred for action to the Income Tax Department.

Enforcement Directorate

The Directorate of Enforcement is mainly concerned with the enforcement of

the provisions of the Foreign Exchange Management Act 1999 to prevent leakage of
foreign exchange which generally occurs through remittances of Indians abroad
otherwise than through normal banking channels; illegal acquisition of foreign
currency; non-repatriation of the proceeds of exported goods; unauthorized
maintenance of accounts in foreign countries; under- invoicing and over-invoicing of
exports and imports and other types of invoice manipulation; siphoning off of foreign
exchange against fictitious and bogus imports; illegal acquisition of foreign exchange
through Hawala and obtaining secret commissions abroad.
 89

The main functions of the Directorate are to collect intelligence relating to

violation of the provisions of the Foreign Exchange Regulation Act; conduct searches
of suspected persons, conveyances and premises and investigate such cases. The
Directorate also adjudicates cases of violations for levying penalties and confiscates
amounts involved in contraventions.

The Directorate General of Anti — Evasion (Central Excise)

Due to the growth of the Central Excise revenue and its coverage to almost all
manufactured products a specialized intelligence agency, the Directorate of Anti
Evasion, was created to target prevention of Central Excise duty evasion.

The Directorate collects intelligence relating to evasion of central excise

duties, studies their modus operandi and alerts Collectorates. It also studies the price
structures, marketing patterns and classification of commodities in respect of which
possibilities of evasion are likely in order to advise Collectorates for plugging
loopholes and co-ordinates with Enforcement agencies like Income tax, Sales tax, etc.

The Directorate General(s) of Income Tax (Investigation)

The Directorate Generals of Income Tax Investigation deal with all matters
connected with investigations under the Income Tax Act .of the Central Government.
They collect intelligence pertaining to evasion of Direct Taxes and organize searches
to unearth black money. They take steps to ensure that persons having information
about tax evaders come forward with the same to the Department and disburse
rewards.

The Narcotics Control Bureau

The national policy on Narcotic Drugs and Psychotropic Substances is based

on the Directive Principles contained in the Indian Constitution (Article 47), with
directs that the State shall endeavor to bring about prohibition of the consumption,
expect for medicinal purposes, of intoxicating drugs injurious to health. Besides, India
is also a signatory to:
 90

● Single Convention on Narcotic Drugs 1961 as amended by the 1972 Protocol.

● Conventions on Psychotropic Substances 1971. 83

● United Nations Convention against Illicit Traffic in Narcotic Drugs and

Psychotropic Substances, 1988.

The broad legislative policy in the matter is contained in the three Central Acts,
viz. Drugs and Cosmetics Act, 1940, The Narcotic Drugs and Psychotropic
Substances Act, 1988. The Department of Revenue has the nodal coordination role as
administrator of the Narcotic Drugs and Psychotropic Substances Act, 1985 and the
Prevention of Illicit Traffic in Narcotic Drugs and Psychotropic Substaces Act, 1988.

The Narcotics Control Bureau was constituted in 1986 to exercise the” powers and
functions of the Central Government for coordination of action by various authorities
under the N.D.P.S. Act, Drugs and Cosmetics Act, etc. and for countermeasures
against illicit traffic under various international

Conventions and protocols presently in force. It is the apex-coordinating agency

and collects and analyses data related to seizures of narcotic drugs and psychotropic
substances, studies trends, modus operandi, collects and disseminates intelligence and
works in close cooperation with the Customs, State Police and other law enforcement
agencies.

Special Investigative Tools

In addition to traditional investigative methods to combat global economic

crime, law enforcement agencies utilize special investigative tools such as controlled
delivery, undercover operations and_ electronic surveillance (wiretapping,
communications interception, etc.) to effectively fight global economic crime.

However, their use is controversial because they may infringe on human rights
to privacy or may be misused.
 91

Controlled Delivery

Controlled Delivery techniques have proven an important enforcement tool in

identifying the principals involved in drug trafficking and other major smuggling
offences especially those who, by the use of couriers, creation of false documents and
other deceptive practices, carefully disassociate themselves and try to be remote from
the drug trafficking operations.

It is the technique of allowing illicit or suspect consignments... to pass out of,

through or into the territory of one competent authorities, with a view to identifying
persons involved in the commission of offences (The United Nations Conference for
the Adoption of a Convention against Illicit Traffic in Narcotic Drugs and
Psychotropic Substances).Further, according to Article 11 of the Convention,
controlled delivery is to be allowed on the basis of mutual agreements or
arrangements between nations.

Section 4 of the Indian Narcotic Drugs and Psychotropic Substances Act, 1985
endorses these international obligations. However, before adopting this technique, the
originating country and the recipient country should discuss in detail the entire
operation, maintain surveillance simultaneously in both the countries, Keep close
surveillance on the movement of drugs either through cargo or through couriers, and
time the final strike operation simultaneously in both the countries to achieve
maximum results.

In India, the Narcotics control Bureau, the nodal agency for enforcement of
laws concerning narcotic drugs and psychotropic substances, has undertaken
controlled delivery operations with number countries from time to time.

Electronic Surveillance

Electronic surveillance covers wiretapping, communications interception, etc.

Telephone interception and the monitoring of all electronic communications are
controversial aspects of electronic surveillance, yet are useful in assisting law
agencies to combat global economic crime.
 92

In India, interception of messages is covered under subsection 2 of section 5 of

the Indian Telegraphic Act, 1885, when it is necessary or expedient to do so in the
public interest. Also, a legal provision has been made in the licensing conditions of
cellular companies to provide parallel monitoring facilities for all communications
being received and emanating from mobile sets.

7.3 SURVEY ON ECONOMIC CRIME IN INDIA

Price Waterhouse Coopers Corporation carried out a survey across a sample drawn
from the top 1000 Indian companies in the manufacturing, services and financial
services sector in 2003.

According to the survey, there has been a significant increase in economic

crime over the past two years but there has been a reluctance to report it. Corruption
and bribery are perceived as the most prevalent economic crimes in India.

Reluctance to admit them may be due to fear of adverse implications or

acceptance of corruption as an everyday cost of doing business. Other economic
crimes having high prevalence include financial misrepresentation, product piracy and
counterfeiting.

The incidence of low reporting of financial misrepresentation and

counterfeiting. The incidence of low reporting of financial misrepresentation may be
attributed to low transparency and poor accountability.

Companies appear to be unaware of the extent to which product piracy and

counterfeiting are rampant and tend to avoid publicity for fear of adverse
implications, particularly their effect on brand image.

Perceived prevalence of asset misappropriation and cyber crime in India is

also relatively low and suggests the need for tighter inernal controls and other
deterrents. The reported absence of money laundering is somewhat surprising and
seems indicative of poor detection.
 93

Most Indian respondents were unable .to quantify their loss arising from
economic crime as the financial impact of less tangible economic crimes such as
corruption and bribery or product piracy and counterfeiting is difficult to quantify.
They are, however, conscious of the collateral cost of economic crime on their
business which, apart from financial loss results in undermining of staff morale and
impacting business relationships, reputation and brand image.

Audits (external and internal), tip-offs and accident or chance are reported to
be the main factors in the detection of economic crime in India. Most organizations
are aware that they are required to report frauds but the reporting is low because of a
reluctance to initiate recovery proceedings, skepticism about recovery, desire to avoid
publicity, concerns regarding implications of disclosure, drawn out litigation process
and a propensity to accept certain crimes as a customary business risk.

Development of controls in their organization ethics or a code of conduct will

from an effective deterrent in combination with pre- employment Screening and fraud
detection training. Looking ahead, respondents believe that despite improved controls,
vulnerability to corruption and bribery, asset misappropriation and financial
misrepresentation continue to be high, despite an expected decline in corruption.
However, an increased threat is expected from economic crimes like product piracy
and counterfeiting, cyber crime and industrial espionage.

WHITE COLLAR CRIME — US

ABA-White Collar Crime Committee

To develop a “Brady Best Practices” group consisting of public defenders,

prosecutors, defense lawyers, judges, ethics officers, academics, and Department of
Justice officials which will study and survey the Brady obligations and practices
around the country. It will not be confined to While Collar issues and will look at both
the state and federal side.
 94

The goal of the group will be to propose a model practice for the identification
and production, in a timely manner, of exculpatory materials to defendants in federal
criminal prosecutions.

FBI — White Collar Crime

Fraud _ the art of deliberate deception for unlawful gain ___is as old as history; the
tern “white — collar crime” was reportedly coined in 1939 by Professor Edwin
Sutherland and has since become synonymous with the full range of frauds committed
by business and government professionals.

Today’s con artists are more servey and sophisticated than ever, engineering
everything from slick online scams to complex stock and health care frauds.

Here you can learn about the many white-collar crimes we investigate, how to protect
yourself from common scams, and what to do if you think you’ve been victimized.

Fraud Enforcement and Recovery Act of 2009

He Fraud Enforcement and Recovery Act of 2009, or FERA, Pub.L. 111 - 21,
123 Stat. 1617, S. 386, is a public law in the United States enacted in 2009.

The law takes a number or steps to enhance criminal enforcement of federal

fraud laws, especially regarding financial institutions, mortage fraud, and securities
fraud or commodities fraud.

Health Care Fraud Enforcement Act of 2009

The battle against those who steal taxpayer dollars through Medicare fraud
and other health care fraud took a step forward this week.
 95

The Senate is now considering the “Health Care Fraud Enforcement Act,”
which will enhance the government's tools used to investigate and remedy Medicare
and Medicaid fraud.

National Association of Criminal Defense Lawyers (NACDL) - White Collar Crime

The National Association of Criminal Defense Lawyers ( NACDL) is the

preeminent organization in the United States advancing the mission of the nation’s
criminal defense lawyers to ensure justice and due process for persons accused of
crime or other misconduct. 90

National Check Fraud Center — Types and Schemes of White Collar Crime

Your complete source for assistance, information and alert reports regarding
counterfeit checks, forgery, check fraud, bank fraud and white collar crimes.

Office for Victims of Crime — White Collar Crime

The Office for Victims of Crime (OVC) was established by the 1984 Victims
of Crime Act (VOCA) to oversee diverse programs that benefit victims of crime.
OVC provides substantial funding to state victim assistance and compensation
programs-the lifeline services that help victims to heal.

The agency supports trainings designed to educate criminal justice and allied
professionals regarding the rights and needs of crime victims.

Public Corporation Prosecution Improvements Act

 96

The Senate Judiciary Committee is considering a bill that would greatly

expand the reach of a key “public corruption” offense that is already far too broad.

In fact, the current statute is already so ill — defined that public officials are
likely to violate it by engaging in conduct that no one should deem criminal or define
as “public corruption”.

Ramos-Compean Justice Act of2009

H.R. 3327 amends 18 U.S.C. & 3553 to allow a federal court to impose a
sentence below a statutory minimum if the court finds that it is necessary to do so
necessary” sentence. The bill was reviewed by the Subcommittee on Crime,
Terrorism, and Homeland Security and was forwarded to the House Committee on the
Judiciary for full vote on July 28, 2009.

United States Sentencing Commission - White Collar Crime

The United States Sentencing Commission is an independent agency in the

judicial branch of government. Its principal purposes are: (1) to establish sentencing
policies and practices for the federal courts, including guidelines to be consulted
regarding the appropriate form and severity of punishment for offenders convicted of
federal crimes; (2) to advise and assist Congress and the executive branch in the
development of effective and efficient crime policy; and (3) to collect, analyze,
research, and distribute a broad array of information on federal crime and sentencing
issues, serving as an information resource for Congress, the executive branch, the
courts, criminal justice practitioners, the academic community, and the public.
 97

White Collar Crime - Overview

The phrase “white-collar crime” was coined in 1939 during a speech given by
Edwin Sutherland to the American Sociological Society. Sutherland defined the term
as “crime committed by a person of respectability and high social status in the course
of his occupation.” Although there has been some debate as to what qualifies as a
white-collar crime, the term today generally encompasses a variety of nonviolent
crimes usually committed in commercial situations for financial again.

White Collar Crime — Wikipedia

Necessary” sentence. The bill was reviewed by the Subcommittee on Crime,

Terrorism, and Homeland Security and was forwarded to the House Committee on the
Judiciary for full vote on July 28, 2009.

United States Sentencing Commission — White Collar Crime

The United States Sentencing Commission is an independent agency in the

judicial branch of government of government. Its principal purposes are: (1) to
establish sentencing policies and practices for the federal courts, including guidelines
to be consulted regarding the appropriate from and severity of punishment for
offenders convicted of federal crimes; (2) to advise and assist Congress and the
executive branch in the development of effective and efficient crime policy; and (3) to
collect, analyze, research, and distribute a broad array of information on federal crime
and sentencing issues, serving as an information resource for Congress, the executive
branch, the courts, criminal justice practitioners, the academic community, and the
public.
 98

White Collar Crime - Overview

The phrase “white-collar crime” was coined in 1939 during a speech given by Edwin
Sutherland to the American Sociological Society. Sutherland defined the term as
“crime committed by a person of respectability and high social status in the course of
his occupation.” Although there has been some debate as to what qualifies as a
white-collar crime, the term today generally encompasses a variety of nonviolent
crimes usually committed in commercial situations for financial gain.
 99

CHAPTER – VIII
CONCLUSION
 100

CONCLUSION:

These economic offences may either be cognizable or non- cognizable in

nature. Local police deals with a considerable number of economic offernces falling
under the board category of ‘Cheating’, ‘Counterfeiting’ and ‘Criminal Branch of
Trust’. A number of special laws regulating customers, excise, taxes,
foreign-exchange, narcotic drugs, banking, insurance, trade and commerce relating to
export and import have been enacted in the country.

These laws are enforced by the respective departmental enforcement agencies

created under the statutory provisions.

Legal Powers for investigation, adjudication, imposing of fines, penalties and

under special circumstances arrest and detention of persons are derived from the same
legislation.

The officers of the enforcement agencies are also vested with powers to
summon witness, search and seize goods, documents and confiscate the proceeds.

Despite special laws and independent enforcement agencies for handling these
crimes there is no decline in the crime rate, on the country it is constantly raising,
which is a serious cause of concern for all those who are associated with the
administration of criminal justice.

India to maintain its growth story needs to reduce fraud and corruption in
government and private sector.

As previously mentioned corruption and fraud stop multinationals from

investing in the country.

The decrease in foreign direct investment in 2011 and the international

financial institutions outflow of funds From stock markets are clear indicators of the
negative impact of fraud and corruption.

Therefore, Indian government must improve governance and take strict action
against the offenders. Comptroller Auditor General is showing the way forward, the
 101

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.

As has been so mentioned a more subjective source of ambivalence in the

social response to white collar crimes is the assumption that there is less public
concern about these behaviors so termed as white collar crimes, and therefore there is
a less support for severe sanctions than in the cases of crimes which are traditional
street crimes.

But even if there was greater public ambivalence towards white collar crimes
in comparison to the traditional crimes, writers such as Box has regarded this as a
further challenge — to sensitize people to not seeing processes in which they are
victimized disasters or accidents.

Therefore, the motto should always be prevention is better than cure. Since the
acts involved defrauding public faith and belief, public as a whole mass should come
forward to protect the whole society from these greedy people who are destroying the
ethics and morality of the society slowly and slowly for their sole aim of pursuing
narrow self.

Capacity of human mind is unfathomable. It is not possible to eliminate cyber

crime from the cyber space. It-is quite possible to check them.

History is the witness that no legislation has succeeded in totally eliminating

crime from the globle.

The only possible step is to make people aware of their rights and duties and
further making the application of the laws more stringent to check crime.
 102

Undoubtedly the Act is a historical step in the cyber world. Further | all
together do not deny that there is a need to bring changes in the Information
Technology Act to make it more effective to combat cyber crime.

Crucial aspect of problem faced in combating crime is that, most of the

countries lack enforcement agencies to combat crime relating to internet and bring
some level of confidence in users.

It’s like ‘eye for an eye’ kind of situation where the technology can be curbed’
only by an understanding of the technology taken over by cyber terrorists.

Even if the technology is made better enough to curb the computer related
crime there is no guarantee if that would stay out of reach of cyber terrorists.
Therefore Nations need to update the Law whether by amendments or by adopting sui
generic system.

8.1 REMEDIAL MEASURES

In a country like India where large scale starvation; mass illiteracy and
ignorance affect the life of the people, white collar crimes are bound to multiply in
large proportion. Control of these crimes is a crucial problem for criminal justice
administration in this country.

However, some of the remedial measures for combating white collar criminality may
be stated as follows:--

1. Creating public awareness against these crimes through the media of press,
platform and other audio-visual aids. Intensive legal literacy programmer may
perhaps help in reducing the incidence of white collar criminality to a
considerable extent.

2. Special tribunals should be constituted with power to award sentence of

imprisonment up to ten years for white collar criminals.
 103

3. Stringent regulatory laws and drastic punishment for white collar criminals
may help in reducing these crimes.

Even legislations with retrospective operation may be justified for this purpose.

Dr.Radhakrishnan, the second President of India, in this context once observed:

“The practitioner of this evil (i.e. white collar and socio-economic crimes) the
hoarders, the profiteers, the black marketers, and speculators are the worst
enemies of our country. They have to be dealt with sternly, however well placed,
important and influential they may be, if we acquiesce in wrong- doing, people
will lose faith in us.”

The penalty for white collar crime which are a potential risk to human lives
may even be extended to the imprisonment for life or even to death if the
circumstances so demand.

4. A separate chapter on white collar crimes and socio-economic should be

incorporated in the Indian Penal-Code by amending the Code so that white
collar Criminals who are convicted by the court do not escape punishment
because of their high social status.

5. White collar offenders should be dealt with sternly by prescribing stiffer

punishments keeping in view the gravity of injury caused to society because of
these crimes.
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The Supreme Court , in M H Haskotv. State of Maharashtra, in this context

observed, “soft sentencing justice is gross injustice where many innocents are the
potential victims”

6. There is an urgent need for a National Crime Commission which may squarely
tackle the problem of crime and criminality in all its facets(one of the many
side of a cut-stone or jewel).

7. Above all, Public vigilance seems to be the cornerstone of anti white collar
crime strategy. Unless white collar crimes become abhorrent to public mind, it
will not be possible to contain this growing menace (tothreaten). In order to
attain this objective, there is need for strenghthening of morals particularly, in
the higher strata and among the public services.

It is further necessary to evolve sound group norms and service ethics based on
the twin concepts of absolute honest and integrity for the sake of national welfare.

This is possible through character building at grass-root level and inculcating a

sense of real concern for the nation among youngsters so that they are prepared and
trained for an upright living when they enter the public life.

Finally, it must be stated that a developing country like India where population is
fast escalating, economic offences are _ increasing by leaps and bound besides the
traditional crimes. These are mostly associated with middle and upper class of society
and have added new chapter to criminal jurisprudence.
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To a great extent, they are an outcome of industrial and commercial developments

and progress of science and new technology.

With the growing materialism all around the world, acquisition of more and more
wealth has become the final end of human activity.

Consequently, moral values have either changed or thrown to winds and frauds,
misappropriation, misrepresentation, corruption, adulteration evasion of tax etc. have
become the techniques of trade commerce and profession.

It is for the criminal law administrators to contain this tendency by stringent

legislative measures.

It is rather disappointing to note that thought white collar crimes such as black
market activities, evasive e price violations, rent — ceiling violations, rationing law
violations, illegal financial maneuvering etc. by businessmen are widespread in
society; no effective programme for pressing them has so far been launched by the
law enforcement agencies.

Perhaps the reason for white collar crimes being carried on unabated is that these
crimes are committed generally by influential persons who are shrewd enough to
resist the efforts of law enforcement against them.
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BIBLOGRAPHY

Beside the guidance from my guide | have referred following books in preparing this
piece of dissertation.

1. Law of Evidence ---- By Sarkar

2. Lectures on Crimes & Torts ---- By Ramarkishna 6 the Edition

3. Lectures on Criminal Law ---- By Manohar Gogia

4. Criminal Major Acts ---- Justice P S Narayana

5. Criminal Law ---- By ALT Publication

6. Criminal Law ---- By P.S.A. Pillai

7. Criminal Law ---- Cases & Meterials

8. Other Internet Sources ---- www.googlebooks.com

9. Other Internet Sources ---- www.wikipedia.com