Definition of White Collar Crimes

Edwin H Sutherland: White-collar crime is committed by

a person of responsibility and high social status in the
course of his occupation".
Types of White Collar Crimes

 Hoarding
 Black marketing
 Adulteration
 Tax-evasion
 Crimes in Medical profession - issuance of false
medical certificate, helping illegal abortions, selling
sample drugs etc
 Crimes in Engineering profession - passing sub-
standard works and materials etc
 Crimes in Legal profession - engaging false
professional witnesses, violating ethical standards,
helping criminals and gangsters to avoid arrest etc.
 Crimes in Educational institutions - Getting
government grants or financial aid with fabricated bills
etc

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Meaning Of White Collar Crime
This notion was laid down for the first time in the field of
criminology by Prof. Edwin Sutherland in 1941. He
defined white collar crime as “crime committed by
persons of respectability and high social status in course
of their occupation”. Examples of it include fraudulent
advertisements, infringement of patents, publication of
falsified balance sheet of business, passing of goods,
concealment of defects in the commodity for sale etc.
These white collar crimes by nature are such that the
injury or the damage caused as a consequence of them is
so widely diffused in the large body of citizens that their
enormity as regards personage victim is almost trifling.
Hartung defines a white-collar offense as a violation of
law regulating business, which is committed for a firm by
the firm or its agents in the conduct of its business.”

Types of White Collar Crime In India

· Bank Fraud: To engage in an act or pattern of activity
where the purpose is to defraud a bank of funds.

· Blackmail: A demand for money or other consideration

under threat to do bodily harm, to injure property, to
accuse of a crime, or to expose secrets.
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· Bribery: When money, goods, services, information or
anything else of value is offered with intent to influence
the actions, opinions, or decisions of the taker. You may
be charged with bribery whether you offer the bribe or
accept it.

· Cellular Phone Fraud: The unauthorized use,

tampering, or manipulation of a cellular phone or service.
This can be accomplished by either use of a stolen
phone,or where an actor signs up for service under false
identification or where the actor clones a valid electronic
serial number (ESN) by using an ESN reader and
reprograms another cellular phone with a valid ESN
number.

· Computer fraud: Where computer hackers steal

information sources contained on computers such as:
bank information, credit cards, and proprietary
information.

· Counterfeiting: Occurs when someone copies or

imitates an item without having been authorized to do so
and passes the copy off for the genuine or original item.

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Counterfeiting is most often associated with money
however can also be associated with designer clothing,
handbags and watches.

· Credit Card Fraud: The unauthorized use of a credit

card to obtain goods of value.

· Currency Schemes: The practice of speculating on the

future value of currencies.

· Educational Institutions: Yet another field where

collar criminals operate with impunity are the privately
run educational institutional in this country. The
governing bodies of those institutions manage to secure
large sums by way of government grants of financial aid
by submitting fictitious and fake details about their
institutions. The teachers and other staff working in these
institutions receive a meager salary far less than what they
actually sign for, thus allowing a big margin for the
management to grab huge amount in this illegal manner.

· Embezz1ement: When a person who has been entrusted

with money or property appropriates it for his or her own
use and benefit.

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· Environmental Schemes: The overbilling and
fraudulent practices exercised by corporations which
purport to clean up the environment.

· Extortion: Occurs when one person illegally obtains

property from another by actual or threatened force, fear,
or violence, or under cover of official right.

· Engineering :In the engineering profession underhand

dealing with contractors and suppliers, passing of sub-
standard works and materials and maintenance of bogus
records of work-charged labour are some of the common
examples of white collar crime. Scandals of this kind are
reported in newspapers and magazines almost every day
in our country.

· Fake Employment Placement Rackets: A number of

cheating cases are reported in various parts of the country
by the so called manpower consultancies and employment
placement agencies which deceive the youth with false
promises of providing them white collar jobs on payment
of huge amount ranging from 50 thousands to two lakhs
of rupees.

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· Forgery: When a person passes a false or worthless
instrument such as a check or counterfeit security with the
intent to defraud or injure the recipient.

· Health Care Fraud: Where an unlicensed health care

provider provides services under the guise of being
licensed and obtains monetary benefit for the service.

The white collar crimes which are common to Indian

trade and business world are hoardings, profiteering and
black marketing. Violation of foreign exchange
regulations and import and export laws are frequently
resorted to for the sake of huge profits. That apart,
adulteration of foodstuffs, edibles and drugs which causes
irreparable danger to public health is yet another white
collar crime common in India.

· Insider Trading: When a person uses inside,

confidential, or advance information to trade in shares of
publicly held corporations.

· Insurance Fraud: To engage in an act or pattern of

activity wherein one obtains proceeds from an insurance

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company through deception.

· Investment Schemes: Where an unsuspecting victim is

contacted by the actor who promises to provide a large
return on a small investment.

· Kickback: Occurs when a person who sells an item

pays back a portion of the purchase price to the buyer.

· Larceny/Theft: When a person wrongfully takes

another person's money or property with the intent to
appropriate, convert or steal it.

· Legal Profession: The instances of fabricating false

evidence, engaging professional witness, violating ethical
standards of legal profession and dilatory tactics in
collusion 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.

· Money Laundering: The investment or transfer of

money from racketeering, drug transactions or other
embezzlement schemes so that it appears that its original

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source either cannot be traced or is legitimate.

· Medical profession: White collar crimes which are

commonly committed by persons belonging to medical
profession include issuance of false medical certificates,
helping illegal abortions, secret service to dacoits by
giving expert opinion leading to their acquittal and selling
sample-drug and medicines to patients or chemists in
India

· Racketeering: The operation of an illegal business for

personal profit.

· Securities Fraud: The act of artificially inflating the

price of stocks by brokers so that buyers can purchase a
stock on the rise.

· Tax Evasion: When a person commits fraud in filing or

paying taxes.
The complexity of tax laws in India has provided
sufficient scope for the tax-payers to evade taxes. The
evasion is more common with influential categories of
persons such as traders, businessmen, lawyers, doctors,
engineers, contractors etc. The main difficulty posed

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before the Income Tax Department is to know the real and
exact income of these
Professionals. It is often alleged that the actual tax paid by
these persons is only a fraction of their income and rest of
the money goes into circulation as ‘black money.

· Telemarketing Fraud: Actors operate out of boiler

rooms and place telephone calls to residences and
corporations where the actor requests a donation to an
alleged charitable organization or where the actor requests
money up front or a credit card number up front, and does
not use the donation for the stated purpose.

· Welfare Fraud: To engage in an act or acts where the

purpose is to obtain benefits (i.e. Public Assistance, Food
Stamps, or Medicaid) from the State or Federal
Government.

· Weights and Measures: The act of placing an item for

sale at one price yet charging a higher price at the time of
sale or short weighing an item when the label reflects a
higher weight.

White Collar Crime in India

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White collar criminality has become a global
phenomenon with the advance of commerce and
technology. Like any other country, India is equally in the
grip of white collar criminality. The recent developments
in information technology, particularly during the closing
years of the twentieth century, have added new
dimensions to white collar criminality. There has been
unprecedented growth of a new variety of computer
dominated white collar crimes which are commonly
called as cyber crimes. These crimes have become a
matter of global concern and a challenge for the law
enforcement agencies in the new millennium. Because of
the specific nature of these crimes, they can be committed
anonymously and far away from the victims without
physical presence. Further, cyber-criminals have a major
advantage: they can use computer technology to inflict
damage without the risk of being apprehended or caught.
It has been predicted that there would be simultaneous
increase in cyber crimes with the increase in new internet
web sites. The areas affected by cyber crimes are banking
and financial institutions, energy and telecommunication
services, transportation, business, industries etc. in India

Reasons For Growth Of White Collar Crimes In India

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# White collar crimes are committed out of greed. The
people who usually commit these crimes are financially
secure.
# Financial or physical duress.
# White collar crimes are estimated to cost society many
times more than crimes such as robbery and burglary. The
amount of death caused by corporate mishap, such as
inadequate pharmaceutical testing, far outnumbers those
caused by murder.
# The emergence of cutting edge technology, growing
businesses, and political pressures has opened up new
avenues for these criminal organizations to prosper.
# This increase is due to a booming economy and
technological advancement such as the Internet and fast
money transfer systems. Law enforcement is sometimes
reluctant to pursue these cases because they are so hard to
track and investigate.
# It is very difficult to detect as white collar crimes
always committed in privacy of an office or home and
usually there is no eyewitness.
# But naturally a question arises that if we have specific
legislations to trace out White Collar Criminality then
why these offenders go unpunished. Main reasons for
which these white Collar criminals or occupational

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criminals go unpunished are

i) Legislators and the law implementers belong to the

same group or class to which these occupational criminals
belong;
ii) Less police effort;
iii) Favorable laws;
iv) Less impact on individuals.

The judiciary is equally, if not more, guilty of delaying

justice. With white-collar crimes on the rise, it 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
is also unfair. India needs different detention centers for
different kinds of criminal misconduct. At 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 trial should be arranged by
appointing more Judges. Central Vigilance Commission

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must keep a constant vigil on the workings of the top
ranking officers. General public must not avoid being
engaged themselves in the prosecution of the White-collar
criminals as the offence in general is directed towards
them. Lastly if they are traced and proved guilty then
Deterrent Theory of punishment is an option one.

.Conclusion
In my concluding words I would like to say that if
everyone at a particular business or company would keep
an eye out for anything suspicious that alone would
detour potential thieves. The real solution to this problem
is going to have to come from the people who are being
affected by it. They are the most likely to stop it. They
cannot let anyone take advantage of them anymore. Most
do not give white collar crimes much thought because
they are only things that they read about in newspapers
and hear on the news. If these crimes continue to grow at
the present rate, they will be out of control before we
know it.

LAW NOTES

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Criminal Law and Cyber Crimes
Date: 2013-02-10Author: Papoo Parmar2 Comments

 
 
 
 
 
 
1 Vote

Classification of Crimes

An act can have both civil and criminal consequences.

(O.J. Simpson trials)

Essentials of Criminal Liability

 To be convicted of a crime, a person must.

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 Commit a guilty act (actus reus).

 Have the guilty mind (mens rea) during commission

of the guilty act.
Corporate Criminal Liability

 A corporation is creature of state statute.

 A corporate entity may be convicted of a crime.

 Punishment would be fines and/or denial of certain

legal privileges.
Liability of Corporate Entity

Corporations may be convicted of criminal activity if:

 Crime is within agent/employee’s scope of

employment;

 Corporation fails to perform a legally required duty;

or

 Crime authorized or requested by corporate

principal/officer.

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Liability of Corporate Officers

Corporate officers and directors are personally liable for

crimes they commit. Also, they may be criminally liable
for acts of their under the “Responsible Corporate
Officer” doctrine.

U.S. v. Park (1975).

Case 8.1:U.S. v. Hanousek (1999).

Types of Crimes

Violent Crimes.

Murder, sexual assault, rape, robbery.

Property Crimes.

Burglary, larceny, theft of trade secrets, theft of services,

arson, receipt of stolen goods, forgery.
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“White Collar” Crimes

Crimes occurring in the business context using non-

violent means to obtain personal or business advantage.

 Embezzlement.

 Mail or Wire Fraud (federal).

 Bribery.

 Bankruptcy Fraud (federal).

 Insider trading (federal).

  Theft of Trade Secrets  (federal).

Organized Crime

Operates illegitimately by providing illegal goods and

services:

 Money Laundering.

 RICO (criminal and civil liability).

Defenses to Criminal Liability

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Infancy (juvenile).

Involuntary Intoxication: is a defense if person was

incapable of understanding act. Insanity: defendant lacked
substantial capacity to appreciate the wrongfulness of act
or to conform act to law.

 Mistake.

 Duress.

 Consent.
Self-Defense of People and Property: use deadly force if
reasonable belief of imminent death or serious injury;
cannot use deadly force to protect property
alone.   Necessity:criminal act necessary to prevent
greater harm. Entrapment: prevents government from
encouraging crimes.  Key issue: was the defendant pre
disposed to commit the act?

Statute of Limitations.

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Immunity.

Criminal Procedures

U.S. Constitution provides specific safeguards for those

accused of crimes at federal and state level.

Criminal procedures are designed to protect against the

arbitrary use of power by the government.

Case 8.2: People v. McFarlan (2002).

Fourth Amendment

The Fourth Amendment protects against unreasonable

search and seizures.

No warrant for search or arrest can issue without probable

cause.

Exclusionary Rule
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Evidence obtained in violation of Constitutional
amendments is excluded from trial.

Deter police from warrantless searches, seizures and

misconduct.

“Inevitability” and “good faith” are exceptions to the rule.

The “Miranda” Rule

Case 8.3: Miranda v. Arizona(1966) required police to

inform suspects of their constitutional rights.

The Supreme Court upheld Mirandain Dickerson v.

U.S. (2000).

Cyber Crime

Computer crime: any act directed against computers or

that uses computers as an instrumentality of a crime.

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 Cyber Theft

 Financial Crimes.

 Identity Theft.

 Cyber Stalking.

 Hacking and Cyber Terrorism.

 Computer Fraud and Abuse Act (1996.

White-Collar Crime: An Overview

The phrase "white-collar crime" was coined in 1939 during a presidential address 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. 

antitrust
The most common white-collar offenses include: 

violations, bankruptcy fraud, bribery, computer and

internet fraud, counterfeiting, credit card
fraud, economic espionage and trade secret
theft, embezzlement, environmental law
violations, financial institution fraud, government
fraud, healthcare fraud, insider trading, insurance
fraud, intellectual property
theft/piracy, kickbacks, mail fraud, money

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laundering, securities fraud, tax evasion, phone and
telemarketing fraud, and public corruption.
Many white-collar crimes are especially difficult to prosecute because the perpetrators use
sophisticated means to conceal their activities through a series of complex transactions.
Whistleblowers are particularly helpful, because they report internal wrongdoing that may
be invisible outside the company.  There has been a steady increase in whistleblowing; in
2015, the Securities and Exchange Commission received 3,923 tips reporting corruption,
bribes, and other white-collar crimes.

According to the Federal Bureau of Investigation (FBI), 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 the power to sanction
corporations as well for these offenses. The penalties for white-collar offenses include fines,
home detention, community confinement, paying the cost of
prosecution, forfeitures, restitution, supervised release, and imprisonment. Sentencing
guidelines suggest longer prison sentence whenever at least one victim suffered substantial
financial harm. However, sanctions can be lessened if the defendant takes responsibility for
the crime and assists the authorities in their investigation. 

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, such as the FBI, the Internal Revenue
Service, the U.S. Secret Service, U.S. Customs, the
Environmental Protection Agency, and the Securities and
Exchange Commission, participate 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.

Responsible Corporate Officer Doctrine

The “Responsible Corporate Officer” (RCO) doctrine
(also referred to as the “responsible relation
doctrine”) creates a presumption that a high-ranking
corporate officer is aware of his or her corporation's
wrongdoing. As the prosecutor does not need to prove
that the officer had actual knowledge of the crime, a
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corporate officer could be found guilty of a crime he
or she had no knowledge of.  This doctrine was
established in two Supreme Court cases, United
States v. Dotterweich, 320 U.S. 277 (1943),
and United States v. Park, 421 U.S. 658 (1975).
In United States v. Dotterweich, the government
prosecuted Dotterweich, the president and general
manager of Buffalo Pharmaceutical Company, for
violating the Federal Food, Drug, and Cosmetic Act by
shipping poor quality pharmaceuticals. The
government provided no evidence that Dotterweich
himself was responsible for the shipment, instead
prosecuting the president for failing to prevent his
company from committing a serious public welfare
offense. The Supreme Court permitted Dotterweich to
be convicted on this theory, convicting him for "doing
nothing."
Thirty-two years later, Park, a president of a large
national food store chain, was convicted for failing to
end a rodent infestation in a food warehouse that his
corporation owned. On appeal, Park defended himself
by claiming to have delegated responsibility over such
infestations to trusted members of his corporation,
such that Park himself thought that the problem was
taken care of. In United States v. Park, the Supreme
Court rejected Park’s defense and upheld his
conviction.  The Supreme Court held Park responsible
because he assumed a position of authority in a
business enterprise that directly affected public health
and welfare.
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Currently, prosecutors may rely on the RCO doctrine
whenever a company or corporation engages in white-
collar criminal conduct. Thus, high-ranking officers
may be found guilty of securities fraud, consumer
fraud, antitrust violations and other felonies simply for
doing nothing.

Public Fraud: Stolen Valor Act

On December 20, 2006, President George W.
Bush signed into law the Stolen Valor Act, which
made it a federal crime to fraudulently claim receipt
of the Medal of Honor, the distinguished-service cross,
the Navy cross, the Air Force cross, the Purple Heart,
and other decorations and medals awarded by the
President or the Armed Forces of the United States.
The Act was meant to prevent public fraud and
preserve the reputation and meaning of military
service medals.
The Stolen Valor Act's constitutionality was challenged
in United States v. Alvarez, 132 S. Ct. 2537
(2012). Xavier Alvarez introduced himself as a
recipient of the Congressional Medal of Honor at a
2007 District Board meeting and was convicted under
the Stolen Valor Act. Alvarez challenged the Stolen
Valor Act as violating his Freedom of Speech. The
Supreme Court agreed, declaring the Stolen Valor Act
in violation of the First Amendment and,
therefore, unconstitutional.

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On June 3, 2013, President Barack Obama signed into
law a revised version of the Stolen Valor Act, now 18
U.S.C. § 704(b)-(d). Unlike the original Stolen Valor
Act, which punished an individual for
fraudulently claiming receipt of a medal or
a decoration, the 2013 Stolen Valor Act punishes
individuals who, through such fraudulent claims,
intend to obtain money, property, or other tangible
benefit.
White-Collar Crime: Defenses 
Any defense available to non-white-collar defendants in criminal court is also available to
those accused of white-collar crimes.  Additionally, the Supreme Court considered the
following arguments:

 In cases of bribery charges, individuals or organizations facing white-collar criminal

charges plead the defense of entrapment. For instance, in United States v. Williams,
705 F.2d 603 (2nd Cir. 1983), one of the cases arising from "Operation Abscam,"
Senator Harrison Williams attempted unsuccessfully to argue that the government
induced him into accepting a bribe.

 In cases of real property fraud, some individuals challenged the proximate

cause element of the offense.  In Robers  v. United States, 134 S.
Ct. 1854 (2014), for example, Robers argued that he
caused no harm because the real estate market crash
would have lowered property values regardless of Robers's
involvement. The Supreme Court rejected Robers's
argument, holding that foreseeable market fluctuations do
not sever proximate causation.

 In cases of financial institution fraud, individuals have

argued that a conviction requires the prosecutor to prove
that the individual had the intent to defraud a specific
financial institution.  The Supreme Court rejected this
argument in Loughrin v. United States, 134 S. Ct. 2384
(2014), holding that financial institution fraud
requires proof of only two elements: (1) intent to obtain

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 bank property; and (2) obtain bank property by means of
false or fraudulent pretenses, representations, or
promises.

 In cases of mail fraud, individuals have argued that a

person is only injured by misrepresentation if the person
receives the false document. In other words, an individual
is not responsible for harming third-parties by his mail
fraud. The Supreme Court rejected this argument
in Bridge v. Phoenix Bond & Indem. Co., 553 U.S. 639
(2008), holding that parties harmed collaterally by the
misrepresentation are also entitled to recover.

 In cases of wire fraud involving foreign countries,

individuals have challenged their convictions on grounds
that the conviction violated the common law revenue rule,
which forbids courts from enforcing tax laws of foreign
countries. InPasquantino v. United States, 544 U.S. 349
(2005), however, the Supreme Court upheld Pasquantino's
conviction, holding that fraud involving foreign
countries fell within the wire fraud statute.

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