DENYING THE GUILTY MIND :ACCOUNTING FOR

INVOLVMENT IN AWHIT COLLAR CRIME

UNIT I
Introduction:
White collar crime is a crime committed by persons
of respectability and high social status, in course of their
occupation. Awhite collar criminal belongs to upper socio-
economic class who
violatesthe criminal law while conducting his professi
onal qualities. Thusmisrepresentation through fraudule
nt advertisements, infringement of patents, copyrights
and trade marks etc., are frequently resorted to
bymanufactures, industrialists and other persons of repute in
course of their occupation with a view to earning huge profits.
Definition:
Crime: Committing offence against human beings by
inflicting physicalmaterial, monetary or mental torture.White
collar crime is defined by many scholars as: -1. Crime committed by
persons of respectability and high social statusin course of their
occupation. (Sutherland).2. Those illegal acts which are
charectorised by deceit, concealment or Violation of trust
and which are not dependent upon the application
or threat of physical force or violence. (Federal Bureau of
Investigation)3. An illegal act or series of illegal acts
committed by non physical kindsof means and by
concealment or guile, to obtain money or property or toobtain
business advantage. (Her best Edlehertr)4. In some what more
precise terminology white color crimes are thoseoffences that
require as an element, that the offender be (i) A
corporateentity or officer of such entity or (ii) performing
a particular job or saving a particular position at the time of he
committed the offence.
White collar criminalities are
: fabricated balance sheets and profitand loss accounts of businesses,
passing of goods, concealment of defectsin the commodity for
sale etc., These white collar crimes by their very
1

nature are such that the injury or damage caused as a result of

this is sowidely diffused in the large body of society that their
gravity in regard toindividual victim is also negligible. It is
probably for this reason that tilllate these crimes did not
attract much attention as they do not carry withthem any
loss of social status of the offender even if he is
caught or detected.
Hypothesis:
This study of convicted white-collar offenders treats their
explanationsfor involvement in criminal activities. It f
ocuses specifically on thetechniques that are used to
deny criminality. The strategies used toa c c o m p l i s h
this end are detailed. It is suggested that the ac
c o u n t s developed by white-collar offenders to explain
involvement in criminalactivities are structured by the
mechanics, histories, and organizationalformats of offenses and
by the requirement that they defeat the conditionsof successful
degradation ceremonies. In conclusion, some
preliminaryobservations concerning the causes of white-collar
crime are made.
Aim and object of the study:
White collar crime is more dangerous to society than the ordinary
crimes, because the financial loss from burglaries,
robberies larcenies etc. Themost dismal aspect of white
collar crimes is that there is no effective programme for
the enforcement of criminal law against them and
theinfluential persons involved in these crimes are able to resist
enforcementof law against white them.
1. Should White Collar Crime Refer Only to Activity
ThatI s A c t u a l l y C r i m i n a l o r A l s o t o O t h e r F
o r m s o f N o n - Criminal Deviance?2. Should
White Collar Crime Refer to Conduct
Engagedin by Particular Kinds of Actors, or Only
to Particular Sortsof Acts?3. Assuming that White
Collar Crime Should Refer to Some Particular
Group of Criminal Offenses, What FactorsShould
Determine Which Offenses If the above
questionsare answered than it is easy to distinguish the
white collarcrimes. By this we can bring this an
authorized offences int o l o w b o o k . T h a n t h e l o w
c a n b e c o m e a wa t c h d o g t o
2

save the society from the economic loss,

h e a l t h l o s s , moral loss etc.
3

Unit II
Treatment:
White collar crime thrives because of public apathy to it. The
reasons of public apathy are:

Such criminals operate with in the strict letter of the law and
exploitthe credibility of their victims.

The legal battles involved are dragged out for years in the
court, withthe result the gravity of the offence is completely lost in
the oblivion.

The impact of white collar crime is so mu

c h d i f f u s e d i n t h e community that the individual
victims are only marginally affected byit, and therefore, they
conveniently forget all about it.

The members of the community themselves co

n t r i b u t e t o t h e commission of various white-collar crimes
willingly or un-willingly.For instance, illegal gratification
to public servants to get the
work done quickly, black marketing in times of scarc
ity, evasive priceviolations, rent ceiling violations etc
.
The contributing Factors for white-collar crimes:
1.The economic and industrial growth through out the
world has beenthe most potential cause of increasing in the
White-Collar crimes.2.The changing socio economic
scenario of the society coupled
withincrease in wealth and prosperity has furnished
opportunities for white-collar crime.3.Twenty-
ninth report of Law
Commission observed that the modernscientific and
technological developments and monopolistic trends
in business world have led to enormous increase in white-collar
crimes4.The contravention of regulatory measures giv
es rise to white-collar criminality( to ushered welfare
activities that necessitated
regulatorym e a s u r e s o n t h e p o r t o f t h e g o v e r n m e
n t t o c o n t r o l m e a n s o f production and distribution so as
to sub serve the common good)5.Marshal B Clinard the
competitive business community which triesto oust their
rival competitors in order to earn huge profits is the rootcause
of white-collar crime.6 . T h e w h i t e -
collar criminals are enjoying relatively high
socio-
economical status. They belong to an influential gro
up which is powerful enough to handle their occupation
tactfully and personsaffected thereby hardly know that they are
being victimized.7.Criminal law administrators and Judges
being members of upper
strataof the society, are generally sympathetic toward
s white collar criminals while dealing with them
4

Classification:

India is equally in the grip of white collar criminality.

The reason for enormous increase in white collar crime in
recent decades is to be foundin the fast developing economy
and industrial growth of this developingcountry. The
Santhnam Committee Report in its findings gave a
vivid picture of white collar crimes committed by
persons of respectabilitysuch as businessmen, industrialists,
contractors and suppliers as also thecorrupt public officials.
Highlighting the magnitude of white collar crimein India, the
Commission on Prevention of Corruption
in its reportobserved:The advance of technological and
scientific development iscontributing to the emergence
of mass society with a large rank of fileand an small
controlling elite, encouraging the growth of monopolies, therise of
a managerial class and intricate institutional mechanism.
Strictadherence to high standard of ethical behavior is
necessary for the
evena n d h o n e s t f u n c t i o n i n g o f t h e n e w s o c i a l , p o l
i t i c a l a n d e c o n o m i c processes. The inability of all
sections of society to appreciate this needin full results in the
emergence and growth of white-collar and economiccrimes,
renders enforcement of the laws, them selves not
sufficientlydeterrent, more
difficult. Tax evasion and avoidance, share-
pushing,malpractices in the
share market and administration
of companies,monopolistic control, usury under-
invoicing or over-invoicing, hoarding, profiteering,
substandard performance of contracts of constructions
andsupply, evasion of economic laws, bribery and co
rruption, electionoffences and malpractices and some
examples of which collar crime Thecommission broadly
classified white collar and socio-economic crimesinto eight
categories and suggested insertion of a new chapter on
whitecollar crimes in the IPC.The unprecedented growth of a new
variety of computer dominatedthe modern white collar crimes
which are widely known as cyber crimes.These crimes have
become a matter of global concern and challenge for the law
enforcement agencies in the new millennium. Cyber
criminalshave an advantage of using computer technology to
inflict damage without the risk of being apprehended or caught.
The areas affected by cyber-
crimes are banking and financial insti
t u t i o n s , e n e r g y a n d telecommunication services,
transportation business, industries etc.
5

The white collar crimes which are common to Indian

trade and business world are hoarding, profiteering and black
marketing.
Violationo f f o r e i g n e x c h a n g e r e g u l a t i o n s a n d i
m p o r t a n d e x p o r t l a w s a r e frequently resorted to for the
sake of huge profits. That apart, adulterationof foodstuffs, edibles
and drugs which causes irreparable danger to publichealth is yet
another white collar crime common in India. The
LawC o m m i s s i o n o f I n d i a h a s s u g g e s t e d d r a s t i c m
e a s u r e s a g a i n s t s u c h offenders. In the commissions
observation the tedious prosecution process involved
in the trail of such cases frustrates the cause of justiceand
often results into unjustified acquittal due to defective report
of theanalyst or delay in examination of samples or lack of legal
expertise etc.
Tax evasion
Complexity of tax laws in India has provided sufficient scope
for t h e t a x -
payers to evade taxes. The evasion is more com
m o n w i t h influential categories of persons such as
trades, businessmen, lawyers,doctors, engineers,
contractors etc. The main difficulty posed before theIncome
Tax Department is to know the real and exact income of
these professionals. It is often alleged that the actual tax paid
by these personsi s o n l y a f r a c t i o n o f t h e i r i n c o m e
a n d r e s t o f t h e m o n e y g o e s i n t o circulation as black
money. Despite frequent modifications in the tax-laws of the
country the menace of tax-evasion continues unabated and itis
causing considerable loss to Government revenue.The Supreme
Court in its majority decision in R K Garg v. Unionof India
(1981) 133 ITR 239 upholding the validity of the Special
Bearer Bonds (immunities and Exemption) Act.1981,
observed that the Act wasnot intended to encourage tax evasion in
future and condone such evasioncommitted in past but the real
object of the Act was to launch a nation
wide search to unearth undisclosed wealth by en
c o u r a g i n g s m a l l incentive to those who declare their
undisclosed cash. The main intentionwas to unearth black money
so as to prevent further loss of governmentrevenues.It may be
pointed out that the problem of generation of
black m o n e y ( u n a c c o u n t e d m o n e y ) a n d i t s p r o l i f e
r a t i o n i s n o t n e w . T h e Government of India has formu
lated voluntary disclosure schemes tounearth the black
money specially to be used for certain social objectives.But the
results of these schemes have not been encouraging. The
mainreason for unsatisfactory response to these schemes
seems to be that tax payers do not want to be identified as
having evaded the tax in the past
6
and the fear of re-opening of their past assessment and
facing rovingenquires also dissuade them from resorting to these
schemes.It is significant to note in this context that what constitutes
crimeis tax evasion and note the tax avoidance .Though
both these termsappear to be synonymous, there a fine
distinction between the two .whilethe former implies non-
payment of tax due to paid, the latter signifiesarranging
the spread over of ones income in such a way that is does
notincur tax liability legally and lawfully.It may be stated that the
government has introduced variousregulatory legislations
such as the essential commodities
Act,1955,theIndustrial (development and regulation )
Act 1951,the Imports andE x p o r t s ( c o n t r o l ) a c t
1 9 4 7 , t h e F o r e i g n E x c h a n g e ( R e g u l a t i o n ) Act,
1974,Companies Act,1956,as amended from time to time, the
branchof which results in white collar criminality A
large majority of whitecollar crimes are, however,
operating within the letter and spirit of thelaw and,
therefore do not call for legal action
White Collar Crime in certain Professions
The professions which have opportunities to
w h i t e c o l l a r criminality are, medical profession,
engineering, legal practice, privateeducational etc.
Medical profession
White collar crimes which are commonly committed by
persons belonging to medical profession include issua
nce of false medicalcertificates, helping illegal abortions,
secret service to dacoits by givingexpert opinion leading to
there acquittal and selling sample-drugs
andm e d i c i n e s t o p a t i e n t s o r c h e m i s t s D i l a t o r y t a
c t i c s a d o p t e d b y t h e members of this profession in
treatment of there patients with a view
toe x t r a c t i n g h u n g s u m s f r o m t h e m h a s b e c o m e
a n a c c e p t e d n o r m , 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
governmentor other undertaking are often confronted with
the problem of gettingleave due to shortage of staff. They,
therefore, procure medical certificateregarding their false sickness
and produce it to the department to justify
7

their absence from duty. In return, they have to pay certain

amount to theconcerned medical staff. Thus, though a white
collar crime, this tacticshas proved a boon and a workable
alternative to employees who havedifficulty in obtaining
leave from the employers.Fake and misleading advertising is yet
another area in whichthe white collar criminals operate.
They make illegal and
misleadingc l a i m s o f m e d i c a l c u r e t h r o u g h a d v e
r t i s e m e n t s i n n e w s p a p e r s , magazines, radio and te
levision thus
adding to human misery. Many p a t e n t m e d i c i n e s a
re 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 law but, by
violating its spirit, they commit crimes whichare not only anti-
social, but also injurious to public health.
Engineering:
In the engineering profession underhand dealings with
contractors andsuppliers, passing of sub-standard works and
materials and maintenanceof bogus records of work-
charged labour are some of the commonexamples of
white collar crime. Scandals of this kind are reported
innewspapers and magazines almost every day. Construction
of buildings,roads, canals, dams and bridges with sub-
standard material not onlye n d a n g e r s p u b l i c s a f e t y
b u t a l s o r e s u l t s i n t o h u g e l o s s t o p u b l i c exchequer.
Legal Profession:
In India the lawyers profession is not looked with much
respect thesedays. There are two obvious reasons for this.
The deteriorating standardsof legal education and unethical
practices resorted to by the members
of legal profession to procure clientage are mainly re
sponsible for thedegradation of this profession which was once
considered to be one of thenoblest vocations. The instances of
fabricating false evidence, engaging professional witnesses,
violating ethical standards of legal profession anddilatory
tactics in collusion with the ministerial staff of the
courts aresame 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 things and keep
8

himself ready with bail bond or habeas corpus writ to avoid

arrest of thegangster. If the members of the gang are arrested,
the lawyer has to findout ways and means to arrange or fix
their release. There are criminallawyers who arrange professional
alibis, cooked witnesses in close liaisonwith the police for defending
the gangsters.Though there is a definite code of conduct for legal
professions but it is only an ornamental document. However,
these not to say that alllawyers are corrupt and unethical.
Quite a large number of them are notmost sincere and
honest in their profession commanding great respectfrom
all sections of society. Perhaps, it is because of the peculiar
natureof their profession that the lawyers and advocates have
to resort to thesetactics in order to survive in the profession
which is becoming more andmore competitive with the passage
of time.
Educational Institutions:
Yet another field where white collar criminals operate withimpunity
are the privately run educational institutions in this country.
Thegoverning bodies of these institutions manage to
secure large sums byway of government grants or
financial aid by submitting fictitious andfake details about
their institutions. The teachers and other staff workingin
these institutions receive a meager salary far less
than what they actually sign for, thus allowing a big margin
for the management to grabhuge amount in this illegal
manner. The Victimised teachers can hardlyafford to
complain about this exploitation to high ups because of the
fear of being thrown out of job. They are, therefore, compelled to
compromisewith the situation. Although the Government has
introduced the schemeof treasury-payments for teachers of
private institutions, but the
problems t i l l p e r s i s t s i n o n e f o r m o r t h e o t h e r . T h a
t a p a r t , f a k e a n d b o g u s enrolment of students who a
re residing far away from the place of location of these
institutions is yet another source of illegal earning for them.
They charge huge amounts byway of donations or capitation
feesfrom such needy students. Even rackets operate in these
institutions for procuring students to appear in different
examinations on the basis of manipulated eligibility
certificates or domicile certificates in return for huge sums.
These dishonest and unscrupulous practices have
damagedthe standard of education in India to such an extent
that it is causing anirreparable loss to the younger generation.
9

More often than not, these privately managed

e d u c a t i o n a l institutions as also those imparting some
professional education enjoy the patronage of some influential
politicians and many of the institutions areeven owned by
them. Many such instructions are virtually non-existentand
are functioning as commercial shops, enabling the
students to getdegrees on payment of huge sums in blatant
violation of the
Governmentr u l e s , r e g u l a t i o n s a n d n o r m s . T h e m a g
n i t u d e o f t h i s w h i t e c o l l a r criminality has adversel
y affected the standard of education in moststates, and
therefore, the problem needs to be tackled through
stringentstatutory measures.
White Collar Crime in Business Deals:
WhiteCollar crimes are also rampant in business world.
Therehave always been instances of violation of trus
t. Sutherland made acareful study of a number of large
corporations and business houses
andfound that they were involved in illegal contract,
combinations or conspiracies in restraint of trade, m
isrepresentation in advertising,infringements against
copyrights and trade marks, unfair labour practices, bribing public
officials and son. The public hardly knows the trickery
of business criminals as they treat it as not too important for their
purpose.Sutherland attributed the highest degree of criminality
to businessworld which includes traders, businessmen and
industrialists. It has beenheld that business communities in India
or large and small merchants
are b a s i c a l l y d i s h o n e s t b u n c h o f c r o o k s . N o w h e
r e i n t h e w o r l d d o businessmen get rich as quickly as they do
in India.The report of the monopolies inquiry Commission
expressed greatconcern about the chronic problem of
hoarding, profiteering and
black m a r k e t i n g o f e s s e n t i a l c o m m o d i t i e s b y t r a d
e r s i n I n d i a . I n t i m e o f shortage and scarcity of
consumer commodities, the traders withdraw thestock and
subsequently dispose it of at exorbitant prices.The Santhanam
Committee Report on Prevention of
Corruptionobserved that Indian business men build u
p secret hoards of foreignexchange abroad through
under-invoicing of exports and over-invoicingof imports
violating the Import & exports Laws and Foreign
ExchangeRegulations.
10
Although bribery is an offence under the Prevention of
CorruptionAct, 1988 and both, bribe-taker as well as the
bribe-giver are equally punishable, but commercial agents
and public officials indulge in illegalgratification for their
personal gain and the legal restraints provided for the purpose
are hardly adequate to cure this menace.[R S NAYAK v A
R Antuley, AIR 1984 SC 684; P V Narasimha Rao v
State, AIR 1998 SC2001] It may, however, be pointed
out that all bribery cases are
notnecessarily white collar crimes because white col
lar criminality isconfined to only those illegal activities
which the persons of prestigiousgroup, high social status
commit in course of their legitimate business or occupation for
financial gain.Adulteration of edible food stuffs is also
frequently committed by businessmen, which is injurious to public
health. The sale and productionof spurious drugs and sub-
standard medicines by manufacturers is
yetanother white-
collar crime which enables businessmen to earn hug
eillegal profits. (Pharmaceutical Inquiry Committee Report)
The evil has become so widespread and persistent that it
is difficult to get even air,water and light unpolluted, the
constant rise in price and cost of living hasmade the consumers cost-
conscious. The unscrupulous traders take undueadvantage of the
situation and provide adulterated articles of food drinksor
drugs etc. at a cheaper rate and earn huge profits
[bibliography K DGAUR 2003]. They do not hesitate
to add poisonous constituents to articles of food and
drinks which are injurious to health. A number of deaths
are reported every year due to consumption of spurious liquor
or food
poisoning.Some of the common adulterants used in var
ious edibles andarticles of food stuffs are: -

Injurious colors such as scroll, saccharin etc. in

preparation of ice-cream and kulfi;

Addition of blotting paper or soapstone in panir;

Geru, ratanjot and powdered husk or rice or bran in powdered

chiliesand spices;

Coal-tar in batasha and other sweets;

Horse-dung, powdered bran etc. in dhania.There are only a few

examples of adulteration in food and drinks.Despite
stringent, provisions in IPC, Adulteration Act, Drugs
Act andOpium Act, the menace of adulteration still subsists
and laws have failedto eradicate this evil.
11

White-Collar crimes also operate in insurance business where

boththe insured as well as insurer earn considerable
profit by making falseand fabricated claims. Instances are
not wanting when intentional house- burning, automobile
destruction and even murders are planned by the persons
of respectable community i8n order to make good fortunes
fromthe manipulated insurance claims.
Computer Related White-Collar Crimes
The latest developments in information technology and
electronicmedia especially during 1990s have given r
ise to a new variety of computer related white collar
crime which is commonly called cyber-crimes. The
widespread growth of these crimes has become matter
of global concern and a challenge for the law enforcement
agencies in thenew 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 without the risk
of being caught. The cyber crimes cover a wide range of
illegal computer-related activities, which include offences such as,
theft of
communicationservices, industrial espionage, disseminatio
n of pornography and sexyoffensive material in cyber-
space, electronic money laundering and
taxevasion, electronic vandalism, terrorism and extortion
, Telemarketingfrauds, illegal interception of telecommunication
etc.In fact, there is a cyber-crime wave in the 21
st
century. Presentlyviruses are the most common problems which are
causing serious damageto computer system. Most viruses
just replicate themselves, but manyalso cause damage,
there are now more than 5000 different strains of viruses
across the globe. For instance, Love Bug virus of May -
2000caused severe damage to working internet sites. So also the
virus recentlydeveloped by Pakistan has defaced the Indian web-
site.Besides virus, there are some common cyber offences
which aredirected against computer systems, networks or
data. Notable amongthem are: -1 . P h e a k e r i n g : -
It is a way to circumvent the billing mechanism
 o f telephones allowing anyone to call anywhere in the
world literallywithout any cost.
12

2.Internet frauds: Cyber space now provid

e s a w i d e v a r i e t y o f investment opportunities o
pening new areas for deceit or fraud.Electronic funds
transfer systems have begun to proliferate. Hencethere
is risk of transactions being intercepted or diverted. Now-a-
daysvalid credit card numbers can be intercepted
electronically as well
a physically and the digital information stored o
n a c a r d c a n b e counterfeited. Section 74 of the Copyri
ght Act makes the offence punishable with imprisonment
up to two year or with fine which mayextend to one lakh
rupees.3 . H a c k e r s : -
Hacker is one who enjoys exploiting the d
e t a i l s o f programmable systems and knows how t
o street their capacity,computer system is punishable
with imprisonment up to there yearsand fine which may
extend to two lakh rupees as per section 66 of thecopyright Act.
4.
Stalking:-
In stalking, persistent messages are sent to unwillin
grecipients thus causing them annoyance, worry and
mental torture.Sending of unsolicited e-mail or spamming is
an infringement of rightof privacy.5.E-mail security
invasion:-It means to encrypt the e-mail and make
it private and non-viewable to others. Section 72 provides
punishmentfor this offence.6.Money Laundering:-It
is a kind of cyber crime in which money isillegally
down loaded transit.The magnitude of the offence is indicated by the
table given below.
7.
Data Diddling:-
It means changing or erasing of data in subtle
wayswhich makes it difficult to put the data back or
be certain of itsaccuracy. It may be stated that just
the legitimate organizations in the privateor public sector rely
upon information systems for communication or record keeping so
too the cyber criminal organizations carry on their illegal activities
by enhanced cyber space technology. Commentingon this Eric
Ellen, one of the officials of the international chamber
of commerce (ICC) has predicted that information
technology is notonly reshaping the mode of corporate
functioning and emerging new business strategies but it is
dramatically increasing the number of potential cyber
criminals. According to him, there is bound to
besimultaneous increase in the incidence of cyber-crimes with
the newinternet sites and users which currently totals
around 35 millionsworld wide.
13

Unit III
a. Legal Education and Scholarship
Within the last generation, white coll
a r c r i m e h a s developed into a standard sub
j e c t i n t h e c u r r i c u l u m o f most American law
schools. There are now at least four major
casebooks, two hornbooks, an anthology, an
annualstudent-edited law review survey, and scores of
law schoolcourses expressly devoted to the subject.42
Indeed,
whitec o l l a r , f e d e r a l , b u s i n e s s , a n d e n v i r o n m e
n t a l c r i m e a r e among the most rapidly proliferating
subjects in thecurricula of American law schools. 43
Law professors areclearly less inclined than their
social science counterpartsto think of white collar
crime in terms of either
offendercharacteristics or mere deviance. Almos
t all law schoolc o u r s e s a n d t e x t s i n w h i t e c o
l l a r c r i m e d e a l w i t h t h e general principles of c
orporate criminality and with thes p e c i f i c o f f
enses of mail and wire fraud, perju
r y , obstruction of justice, conspiracy, and RICO. Many
coursesemphasize white collar crime as a body of
substantive law,while others focus on the
procedures associated with its prosecution,
particularly in the federal courts. Some, butby no
means all, of the courses emphasize
constitutionalissues raised by the supposedly
increasing
federalizationo f c r i m i n a l l a w. O t h e r s c o v e r g r a
n d j u r y a n d f o r f e i t u r e proceedings. Still others
deal with specific offenses
sucha s i n s i d e r t r a d i n g a n d o t h e r f o r m s o f s e c
u r i t i e s f r a u d , computer crimes, bribery, gratuitie
s, money laundering,e n v i r o n m e n t a l a n d o t h e r r
egulatory crimes, extortion,f a l s e c l a i m s , b a
nk fraud, and tax crimes. The almostunive
rsal inclusion of conspiracy and RICO in t
h e l a w school white collar crime curriculum is, in
some
respects,s u r p r i s i n g . B o t h a r e e s s e n t i a l l y i n c h o
a t e o r p r o c e d u r a l crimes, in which the predicate
offense is often far removedfrom the domain of what
would ordinarily be
consideredw h i t e c o l l a r c r i m e . ( U n d e r R I
C O , f o r e x a m p l e , t h e definition of racketeering
activity includes, among
manyother offenses, both sexual exploitation of c
hildren andt h e u s e o f i n t e r s t a t e c o m m
ercial facilities in the
14

commission of murder for hire44neither of which

couldeven remotely be considered a white collar
crime.) Thereason for such inclusion seems to be
simply that such lawschool courses are designed to
prepare students for thecomplex procedural
context in which white collar
criminall a w i s p r a c t i c e d , r e g a r d l e s s o f t h e a c t
ual substance of o f f e n s e s s t u d i e d . I n a n
y e v e n t , g i v e n t h e t o r t u o u s definitional
history of white collar crime in the socials
ciences, it is somewhat surprising that legal
academicsh a v e e x p e n d e d r e l a t i v e l y l i t t l e e f f o r
t i n d e f i n i n g wh i t e collar crime or explaining the
criteria upon which specificoffenses are included
in a given curriculum. Most of
thet e x t b o o k s a n d l a w r e v i e w l i t e r a t u r e
d e a l w i t h t h e definitional question only
briefly,45a n d s o m e n o t a t a l l . 4 6 R a t h e r , t h e r
e s e e m s t o b e a n assumption that the subject
matter of white collar criminallaw can be defined
simply by reference to the offenses that are
actually covered in a given course or casebook.
b . W h i t e C o l l a r C r i m e
a s a f a m i l y resemblance:
 The term white collar crime might provide a useful
labelin criminal law theory. Given the substantial
disagreementover its meaning, one might well wonder
whether it wouldmake sense to abandon the term
entirely and rely insteadon some alternative term or
collection of terms, such
aseconomic, business, corporate, or occup
ationalc r i m e . T o p u t i t a n o t h e r wa y , we n e e d
t o a s k wh e t h e r there is some defining group of
family resemblances
thati s c h a r a c t e r i s t i c o f w h i t e c o l l a
r c r i m e a n d i s n o t adequately captured by
the alternatives. In
approachingt h i s q u e s t i o n , m y a i m i s n o
t t o o f f e r y e t a n o t h e r alternative definition
of white collar crime.
Instead, I wantt o s u g g e s t a n a p p r o p r i a t e
methodology
for developings u c h a d e f i n i t i o n . A n d , i n a
s m u c h a s l e g a l t h e o r y i s concerned with the
moral content of criminal offenses, it isin that realm
that we will want to look in developing sucha
methodology.
15

As I have described elsewhere, the moral

c o n t e n t o f criminal offenses can be divided into three
basic elements:
Culpability
reflects the mental element with which ano
ffense is committed, such as intent, knowledge, or belief.
Harmfulness
reflects the degree to which a criminal act causes,
or risks causing, harm to others or self. And
moralwrongfulness
involves the way in which the criminal act entails
a violation of moral norms. Following this
approach,t h e n , o n e wa y t o d e t e r m i n e wh i c h o f f
e n s e s s h o u l d b e included within the category of
white collar crime wouldbe to ask whether in
terms of culpability, harmfulness, and
wrongfulnessa particular offense resembles
othero f f e n s e s wi t h i n t h a t c a t e g o r y . D r a wi n g o
n wo r k I h a v e published elsewhere, I would argue that
white collar crimedoes differ from non-white collar
crime in all three of
thedimensions identified: First, the harms that w
hite collarcrimes cause (think, for example, of
bribery, tax
evasion,a n d i n s i d e r t r a d i n g 9 6 ) t e n d t o b e
m o r e d i f f u s e a n d aggregative than in the case
of conventional crime;
and iti s o f t e n h a r d e r t o s a y w h o ( o r w h
a t , i n t h e c a s e o f governmental instituti
o n s o r c o r p o r a t i o n s ) h a s b e e n victimized, and
how. Second, white collar crime tends
toinvolve certain distinctive forms of moral wron
gfulness:n o t o n l y d e c e p t i o n a n d b r e a c h
o f t r u s t , 9 7 b u t a l s o cheating, exploitation,
coercion, promise breaking, andd i s o b e d i e n c e .
T h i r d , w h i t e c o l l a r o f f e n s e s f r e q u e n t l y refle
ct a distinctive role for mens rea: They either
requireno mens rea at all (as is the case with
many regulatoryoffenses), or make proof of
mens rea so important that conduct performed
without it not only fails to expose
thea c t o r t o c r i m i n a l l i a b i l i t y, b u t m a y n o t b e r
e g a r d e d a s wrongful at all. My point, of course,
is not that all
whitec o l l a r o f f e n s e s ( a n d o n l y s u c h o f f e n s
e s ) e x h i b i t s u c h qualities. If we expectto find some
fixed and universally-agreedupon
collectiono f n e c e s s a r y a n d s u f f i c i e n t c o n d i t i o n
s t h a t d e f i n e t h e category of white collar crime
across all disciplines, we arebound to be
disappointed.98 Nevertheless, I believe that
itw o u l d b e a m i s t a k e t o g i v e u p o n t h e t
e r m e n t i r e l y . P r o v i d e d t h a t we r e c o g n i z e i t s
c o n t e x t - s p e c i f i c , f a m i l y resemblance- like-quality,
white collar crime remains for
16

the legal theorist a term both powerfully

evocative andultimately indispensable.
c. White collar crime distinguished from traditional crime:
It must be noted that white collar criminality has a close
affinity to theattitudes and values of culture in a particular society.
This is evident fromthe fact that white collar criminals are
intelligent, stable, and successfuland men of high social status
as compared with the ordinary
criminals.They are foresighted persons belonging to t
he prestigious group of society. White collar crimes
which are committed in commercial worldare indirect,
anonymous, impersonal and difficult to detect. As
againstthis, 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 ordinarycrimes
which are otherwise called blue collar crimes are more
commonw i t h t h e u n d e r -
privileged class while the white collar crimes ar
e committed by the members of privileged group who
belong to upper strata of society. Edwin Sutherland, however,
suggests that status alone isnot the determinant factor of
white collar or blue collar crime. This isevident from the
fact that even the most privileged and prestige personsmay
commit heinous crime such as assault, murder, rape or
kidnappingfor which they can be severely punished, while on
the other hand, mostunder-privileged persons may be involved in a
white collar crime like taxevasion, corruption or
misrepresentation which may not be looked asserious
offence. This however, does not mean that white collar crimes
are petty offences because they do not carry major punishment.
Undoubtedly,the penologist hitherto confined their attention to
prevention of ordinary predatory crimes but the recent
penal programme sufficiently indicatethat emphasis has
now shifted to suppression of white collar criminalitywith
equal vigor and strength. The amendments introduced in the
IndianCompanies Act in 2000, Monopolies and Restrictive
Trade Practices
Act,i n 1 9 9 2 , I n s u r a n c e a n d B a n k i n g l a w s , t h e a p p
o i n t m e n t o f L o k p a l , Lokayukta and tightening of
governmental control over private
businessgroups sufficiently reflect upon the Governm
ents determination tosuppress white collar criminality in
IndiaThere is much resemblance between white collar and the
blue-collar crime. Both owe their origin to common low and are
adaptations of principles of theft, fraud etc. to modern socio-
economic institutions andin fact there is no basic difference
between the two. The only peculiarityof white collar crime is
that it is committed by the persons of relatively
17

high status of society. The criminal content in both the types

is more or less common. It must, however, be noted that mens
rea or guilty mind
isan essential ingredient of every blue collar crime b
ut many statutesdealing 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.It must be stated that
besides being a social problem, whitecollar crime is also
a legal problem. As e. E. H. Sutherland rightly puts it,no
distinction in terms of status, occupational activity, attitude or
gravityof consequences can separate white collar crime
from those
of traditionalc r i m e . T h e o n l y d i s t i n g u i s h i n g f e a t u r e
o f t h i s t y p e o f c r i m e i s t h e temptation for considerable
material gain with little or no less of status.This again, gives a
misleading impression that the executive and
judiciala u t h o r i t i e s w h o a r e c o n c e r n e d w i t h t h e p r e
v e n t i o n o f c r i m e r e a c t favorable to the upper and
middle class society and dispose of whitecollar criminals
with mere censure or admonition while other
criminalsare subjected to severe penal sanctions under
the law without beinggiven any pre-warning. But that the
reason for this soft attitude of law-makers and prosecutors
towards white collars criminals is perhaps theletters
closer contacts with agencies of social control on account
of their social status and privileged position. More often than not,
these criminalsare friendly with the top ranking public
officials. That apart, impact of white collar crime is so
widely diffused in a large number of people thatis does not
aggravate the feelings of one single individual. Therefore,
the p u b l i c c r y a g a i n s t w h i t e c o l l a r c r i m i n a l i t y i s
f a r l e s s t h a n f o r t h e predatory crimes.Commenting on the
preponderance of white collar crime in
them o d e r n t i m e E d w i n S u t h e r l a n d r i g h t l y c o m
m e n t s t h a t , s o c i a l disorganization on account of ind
ividualistic policies and competitiveeconomy are the
root causes for this type of criminality. It is rather
areflection on societys attitude towards different types of
crimes and theaccepted values of its culture.The financial cost
white collar crime is probably several timesgreater than that
of all the crimes taken together. In a recent study it has been
concluded that the financial loss to society from white collar
crimeis far greater than the financial loss from the predatory
crimes committed by persons of lower socio-economic status.
It has been further concludedthat the average loss per burglary
is less than ten thousand rupees and a burglary which yields as
much as one lakh of rupees is exceedingly rare.On the other
hand, there may be several corers rupees embezzlements
18
reported in one year. Notable, these embezzlements
are nothing asc o m p a r e d w i t h t h e l a r g e s c a l e c r i m
e s c o m m i t t e d b y c o r p o r a t i o n s , investment trusts and
public utility concerns. It can, therefore, be inferredthat white collar
criminals violate trust and create distrust which lowerssocial
morale and results into social disorganization to a large
extentwhile other crimes produce relatively little effect on social
institutions.By way of generalization it may be stated that like
other criminal behavior, white collar criminality can best
be explained throughthe process of differential association. It
is a generic explanation for bothwhite collars as also the blue
collar criminality. Those who become whitecollar criminals
generally start their career in good neighborhoods
andgood homes, well educated with some idealism and
get into peculiar business situations in which
criminality is practically a routine way of life.Another
explanation for white collar criminality is to be found in
the process of social disorganization in the community
19

Unit IV
Judicial Attitude:
The courts generally have been giving differential treatm
ent towhite-collar criminals. Sometimes, instead of
punishing the guilty, thecourts have used cease-and-desist
orders in case of white-collar criminals,a technique which is not
resorted to for ordinary criminals. As pertinentlyobserved by Taft
and England, we do not warn the burglar to desist; wearrest
him forthwith. There, however, seems to have occurred
stiffeningof the judicial attitude in the U.S.A. of late as
manifested in the famousGeneral Electric case of the electrical
equipment companies decided inthe year 1961. In the words of
Taft and England:The plea of nolo contendere (no contest)
by a person
formallya c c u s e d o f a c r i m e i s a b a c k h a n d e d p l e
a o f g u i l t y . F o r d e c a d e s , businessman accused of
violating anti-trust laws have placed nolocontendere
when the evidence against them was clearly
overwhelming. Never, until 1959, did imprisonment follow
such a plea. In that year, totheir astonishment four Ohio
businessman were sentenced to jail for anti-
trust violations. In February 1961 , 44 executive
s o f 2 9 e l e c t r i c a l equipment companies, including Gen
eral Electric and Westinghouse, pleaded guilty or nolo
contendere to charges of price-fixing and rigging bids on $
7 billion worth of heavy electrical equipment. In
addition
tof i n e s r a n g i n g u p t o $ 1 2 , 5 0 0 , 2 3 e x e c u t i v e s ,
o n e o f w h o m w a s a Westinghouse vice-president were
variously sentenced to 30- and 60 days jail terms most
of these sentences were actually served. The extensive press
coverage given to this incident was apparently based not upon
theenormity of the crimes involved, but upon nation wide surprise
at the jailsentences meted out and upon the verbal
reprimands by the
sentencing judge.T a f t a n d E n g l a n d a l s o n o t t h e s i g
n i f i c a n c e o f t h e T i m e M a g a z i n e reporting the story in the
Business and not in the Crime columns.35The trial courts in
India sometimes fail to realize the gravity of white -collar
criminality and, therefore tend to be contented by awarding light
or even token punishment to white-collar criminals. The Law
Commissionhas been fully aware of the judicial smug
ness vis--vis white-collar crimes and the dangers
inherent in it. In its Forty-seventh Report theCommission
observed.
20

Suggestions are often made that in order that the lower

magistracy mayrealise the seriousness of some of the social and
economic offences, somemethod should be evolved of making the
judiciary conscious of the gravedamage caused to the countrys
economy and health by such anti-socialcrimes We hope that
the higher courts are fully alive to the harm
andw e h a v e n o d o u b t t h a t o n a p p r o p r i a t e o c c a
s i o n , s u c h a s j u d i c i a l conference, the subject will
receive attention. It is of utmost importancethat all State
instrumentalities involved in the investigation, prosecutionand
trial of these offences must be oriented to the philosophy which
treatsthese economic offences as a source of grave
challenge to the materialwealth of the
nation.Besides prescribing stiffer punishments for white-
collar offerders, theS u p r e m e C o u r t h a s a l s o h e l
d i n a n u m b e r o f c a s e s t h a t l i b e r a l interpretatio
n must be given to the penal laws dealing with social
welfarelegislation to see that the legislative object is not
defeated. In
Murlidhar Meghraj Laya V. State of Maharastra,
the Court
observed: I t i s t r i t e t h a t t h e s o c i a l m i s s i o n o f f o o d
l a w s s h o u l d i n f o r m t h e interpretative process so that the
legal blow may fall on every adulterator.Any narrow and pedantic
literal and lexical construction likely to leaveloopholes for this
dangerous criminal tribe to sneak out of the meshes of the law
should be discouraged. For the new criminal jurisprudence
mustdepart from the old canons, which make indulgent
presumptions andfavoured constructions benefiting accused
persons and defeating criminalstatutes calculated to protect public
health and the nations wealth.In the case of,
State of

Maharastra V. Mohd. Yaqub

, the Court was of theview that penal provisions calculated
to suppress smuggling activitiesmust be construed liberally.It
may be noted that these rulings in favor of the liberal
interpretation of penal provisions relating to socio-economic
crimes are at variance withthe ordinary rules of
construction of penal status which require
strictinterpretation and benefit of doubt, if any, must be given to the
accused.Finally, the Courts in India have given strict
interpretation to the socio-economic statues which do
not require any mens rea either in the form of intention or
knowledge for committing an offence. This is how it
should be though it may be pointed out that the
courts have been somewhat reluctant in finding mens rea
excluded from statutes dealing with moretraditional
offences. Dealing with a violation of the Foreign
Exchange
21

Regulation Act, 1947 the majority in State of Maharastra V.

George heldthat the very object and purpose of the Act
and its effectiveness as aninstrument for the prevention of
smuggling would be entirely frustrated if conditions were to be
read into section of the Act qualifying the plainwords of
the enactment that accused should be proved to have
knowledget h a t h e w a s c o n t r a v e n i n g t h e l a w b e f o r e
h e c o u l d b e h e l d t o h a v e contravened the
provision.A g a i n i n T e j a n i V . D a n g e a c a s e u n d e r
t h e P r e v e n t i o n o f F o o d Adulteration Act, the Supreme
Court said:It is trite law that in food offences strict liability is
the rule not merelyunder the Indian Act but the entire world over.
Section 7 casts an absoluteobligation regardless of sinter bad
faith and mens rea. If you have soldany article of food
contrary to any sub-sections of section 7 you
areguilty. There in no more argument about it.In most
circumstances, the defense is faced with two
competing anddifficult alternatives: accept the
prosecutions offer and plead guilty tocertain charges, or
proceed to trial and allow the court to decide
theoutcome. Neither choice is easily made; each can
have life-alteringconsequences.Leading Cases of white collar
crime1.Satyam Computer fudging of accounts. The TOI
News servise date8 Jan 09 Rs. 40 billion fraud in
company balance sheet Founder Chairman B Ramalinga
Raju2.Talgi Stamp Fraud 1993 3.Harsad Meheta Share
Ghotala (1991-92) involving
4.
Murlidhar Meghraj Loya V. State of Maharastra (1976) 3 SCC
684,1976 SCC (Cri) 4935.M.H. Haskot V. State of
Maharastra (1978) 3 SCC 544, 1978 SCC(Cri) 4686.State
of Maharastra V. Mohd Yaqub (1980) 3 SCC 57: 1980
SCC(Cri) 5137.State of Maharastra V. George
AIR 1965 SC 722: 1965 I Cri LJ6418.Tejani V. Darge
Prevention of food Adulteration (1974) SCC 167(1974)
SCC (Cri) 879.R.S. Nayak V. AR Antuley AIR 1984 SC
68410.P.V. Narsimha Rao V- State AiR 1998 SC 2001.
22

Unit V
External Links:
The White-
collar criminal can approach leading Law terms for t
heir objective to fulfill under the prevailing law of the
State. By this
manyclients can avoid potential difficult and embarr
assing situations andresulting criminal charges it proper
precautions are taken in advance. Anaudit is an important
first step. Audit of standard business practices toensure
compliance with applicable law. This is especially
important inhighly regulated industries.The Law firms attorney
will meet with senior management to formulatea plan for the
scope of an internal audit. The usual course is to
interviewk e y e m p l o y e e s a n d t h a n p r e p a r e a w r i t t e n
r e p o r t s u m m a r i z i n g t h e attorneys findings and
recommendations.In addition the groups can enlist client
s to white collar crime Law.Because the white collar
criminals defenses Attorney of Law firm hasdecade of
rich experience in handling state and provincial
prosecutionsfrom the pre- indictment stage through
verdict. Difficult time requireexperienced lawyers,
questions of misconduct by corporate official andemployees to
testify before the court and suggests.a.Development procedures
for concluding an internal investigation b.Prepare corporate
officials for the steps to take when a corporateemployee is
suspected of criminal
conduct.c . A l e r t c o m p a n i e s t o t h e s i g n s o f p o s s i b l e
c r i m i n a l c o n d u c t b y competitors.At Law firm Attorneys have
the experience to assess the situation andimplement a plan
designed to minimize a potential exposure and thedisruption
to productivity caused by an investigation by establishing
arelationship with a prosecuting authority to determine the
scope
and p a r a m e t e r s o f t h e p r o b e , m e e t i n g w i t h t h e r e l
e v a n t i n d i v i d u a l s reviewing the subject documents and
analyzing the applicable Law
theL a w f i r m s a t t o r n e y s c a n q u i c k l y a s s e s s t h e s i
t u a t i o n , e v a l u a t e possible resolution and decide on
strategy. The Law firms goal is to provide clients with valuable
opinion so that best decision as to how to proceed can be made.
23

Unit VI
Remedial Measures:
In a country like India where large scale starvation; massilliteracy
and ignorance affect the life of the people, white collar
crimesare bound to multiply in large proportion. Control of
these crimes is
acrucial 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 programme 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 sentenceof imprisonment up to ten years for
white collar criminals.
3.
Stringent regulatory laws
and drastic punishment for white collar criminals may
help in reducing these crimes. Even legislations
withr e t r o s p e c t i v e o p e r a t i o n m a y b e j u s t i f i e d f o r t
h i s p u r p o s e . D r . Radhakrishnan, the second President
of India, in this context onceobserved :the practitioner of
this evil (i.e. white collar and socio-
economicc r i m e s ) t h e h o a r d e r s , t h e p r o f i t e e r s , t h e
b l a c k m a r k e t e r s , a n d speculators are the worst enemies
of our country. They have to bedealt with sternly, however
well placed, important and influentialthey may be, if we
acquiesce in wrong-doing, people will lose faithin us.The
penalty for white collar crime which are a potential
risk tohuman 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
crimesshould be incorporated in the Indian Penal Code
by amending theCode so that white collar criminals who are
convicted by the court donot escape punishment because of their
high social status.5.White collar offenders
should be dealt with sternly by prescribingstiffer
punishments keeping in view the gravity of injury
caused tosociety because of these crimes. The Supreme Court
, in M H Haskotv. State of Maharashtra, in this context
observed, soft sentencing
justice is gross injustice where many innocents are t
he potentialvictims
6.
There is an urgent need for a National Crime Commission
which maysquarely 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 whitecollar crime strategy. Unless white
collar crimes become abhorrent to public mind, it will not be
possible to contain this growing menace
(tot h r e a t e n ) . I n o r d e r t o a t t a i n t h i s o b j e c t i v e ,
t h e r e i s n e e d f o r strengthening of morals particularly, in
the higher strata and amongthe public services. It is further
necessary to evolve sound group-
norms and service ethics based on the twin concepts
of absolutehonest and integrity for the sake of national
welfare. This is possiblethrough character building at grass-
root level and inculcating a senseof real concern for the
nation among youngsters so that they are prepared and
trained for an upright living when they enter the
publiclife.Finally, it must be stated that a developing
country like Indiawhere population is fast escalating,
economic offences are increasing
byl e a p s a n d b o u n d b e s i d e s t h e t r a d i t i o n a l c r i m e s .
T h e s e a r e m o s t l y associated with middle and upper
class of society and have added newchapter to criminal
jurisprudence. To a great extent, they are an outcomeof
industrial and commercial developments and progress of
science
andnew technology. With the growing materialism all ar
ound the world,acquisition of more and more wealth has
become the final end of human activity. Consequently, moral
values have either changed or thrown
towinds and frauds, misappropriation, misrepresentat
ion, corruption,adulteration evasion of tax etc. have
become the techniques of trade commerce and
profession. It is for the criminal law administrators
tocontain this tendency by stringent legislative meas
ures. It is rather disappointing to note that thought
white collar crimes such as black market activities,
evasive e price violations, rent-
ceiling violations,r a t i o n i n g -
law violations, illegal financial maneuvering
e t c . b y businessmen are widespread in society; no e
ffective 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.

Conclusion:
These economic offences may either be cognizable or non-
cognizable
innature. Local police deals with a considerable num
ber of economicoffences falling under the board category
of Cheating, Counterfeitingand Criminal Branch of Trust.A
number of special laws regulating customers, excise,
taxes,
foreignexchange, narcotic drugs, banking, insurance,
trade and commercerelating to export and import have
been enacted in the country. Theselaws are enforced by the
respective departmental enforcement agenciescreated under
the statutory provisions. Legal powers for
investigation,a d j u d i c a t i o n , i m p o s i n g o f f i n e s ,
p e n a l t i e s a n d u n d e r s p e c i a l circumstances arrest
and detention of persons are derived from the samelegislation.
The officers of the enforcement agencies are also vested
with powers to summon witness, search and seize go
ods, documents andconfiscate the proceeds.Despite special
laws and independent enforcement agencies for handlingthese
crimes there is no decline in the crime rate, on the
country it isconstantly raising, which is a serious cause of
concern for all those whoare associated with the administration of
criminal justice.
Bibliography:
1. Criminology Penology Paranjpay2. Concept of white collar crime
Stuart P Greon3. White collar Crimes MI Chael L Benson4. Internet
Services