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White Collar Crimes
As the human race progresses, every aspect of the society gets upgraded and developed, even the unfathomable greed of an individual. From times immemorial, man, who is an animal, has aspired for more power and wealth zealously through all scrupulous and unscrupulous means. It is an era of affluent crimes where a CEO sitting in his AC chamber breaches the fiduciary relationship between his company and clients by misappropriating certain information or embezzling the public money. This person is vividly different from our traditional blue-collar criminal, as he is intellectual and is bestowed upon by God with all the material comforts, despite which he dares to commit an act which can have startling consequences which may vary from the downfall of the economy to the commission of suicides by his shareholders.
DEFINING WHITE- COLLAR CRIMES: A COMPLICATED TASK
There is a plethora of opinions and findings vis-à-vis the definition of white-collar crimes, which is not only an intricate task but also an evolving and non-static concept. The definitions which are offered by legal scholars vary both across and within disciplines and linguistic practises. Black's Law Dictionary defines white-collar crime as "a non-violent crime usually involving cheating or dishonesty in commercial matters." The Oxford English Dictionary defines the white-collar criminal as "a person who takes advantage of the special knowledge or responsibility of his position to commit non-violent, often financial, crimes." The American Dictionary of Criminal Justice more specifically defines white-collar crime as "nonviolent crime for financial gain committed by means of deception by persons whose occupational status is entrepreneurial, professional or semi-professional and utilizing their special occupational skills and opportunities." White-collar crime is considered a special breed in the criminal justice system, as there is a long history of perceived leniency with regard to these criminals. The leniency argument stems from the apparent ability of alleged white-collar criminals to utilize their resources to escape indictment or conviction. Whatever definitions have been offered have failed to find general acceptance; whatever alternatives have been suggested have proved inadequate. The term was first used in 1940 by Edwin H. Sutherland, the most influential American criminologist of his day, in a presidential address to the American Sociological Association. Sutherland was famously vague and inconsistent in saying exactly what the term should mean. But even if he had been precise and consistent in his usage, it seems likely that the term would still have generated uncertainty and misunderstanding among other users of the term. The definition for which he is most well known, and that has had the longest staying power, defined white-collar crime as:
“The crime committed by a person of respectability and high social status in the course of his occupation”.
Sutherland's definition tells us that only certain types of people can commit white-collar crimes, those with “respectability and high social status”. It also specifies that the act must arise out of the course of the actor's occupation. A distinguishing feature of Sutherland's approach was his willingness to include civil and administrative violations as part of white-collar crime, which provoked extensive comment and criticism from legal scholars. Sutherland justified his stand by contending that the inclusion of other types of violations was justified because many civil laws deal with practices that are fundamentally similar to criminal offences and many illegal business practices can be sanctioned under both criminal and civil law.
The Social status of the offender:
A major point of contention regarding Sutherland's definition is whether the social status of offenders should be a defining characteristic of white-collar crime. Sutherland included respectability and high social status in his definition, because he wanted to draw attention to the criminality of business groups. Sutherland argued that the criminological theories of his day were class biased and incomplete because they equated crime with lower-class individuals and ignored crime by upper class individuals. In addition, he was morally outraged by what he regarded as the lenient and preferential treatment afforded to business offenders in the criminal justice system. Although Sutherland was correct about the narrowness of criminological theory and the unfairness of the criminal justice system, the inclusion of social status and respectability in the definition of white-collar crime created several problems for research and analysis. The main problem in using social status as a defining element of crime is that it cannot then be used as an explanatory variable because it is not allowed to vary independently of the crime. Similar offences may be committed by corporate executives and by employees at the bottom of the corporate executives and by employees at the bottom of the corporate hierarchy, but only the former meet Sutherland's definition of white-collar crime. Ex. A corporate executive may take advantage of privileged information about an impending stock event gained in the boardroom to engage in illegal insider trading. A typist transcribing minutes from a meeting from a meeting may note the same information and use in the same manner as the executive in order to trade company stock illegally.
White-collar crimes to Lawyers and Sociologists:
To lawyers, the term “crime” denotes a legal category. It refers to particular kinds of conduct that our legal institutions recognize as “criminal.” Such conduct must be defined in a particular manner, employing certain characteristic concepts such as actus reus and mens rea; it must have a certain “public” character in the sense that a wrong is committed against the public as a whole and charges are brought in the name of the government or the people; the question whether a crime has been committed must be adjudicated in a particular manner, employing distinctive procedures and burdens of proof, and recognizing distinctive procedural rights; and it must entail certain characteristic forms of punishment. To lawyers, therefore, it seems obvious that when one talks about “white collar crime,” one should be talking about some subcategory of conduct that reflects such criminal law-like characteristics. To social scientists, this point is less clear. Sociologists and criminologists are concerned less with legal labels and categories than with describing patterns of behaviour, its causes, and society's attitudes towards it. Thus, for Sutherland and many of his fellow sociologists, white collar crime is not “crime” in the legal sense of the term. At the time he was writing, much of the activity he was concerned with such as restraint of trade, violation of patents, unfair labour practices, and adulteration or misbranding of food and drugs—either was not subject to criminal sanctions at all, or, if it was, was rarely prosecuted as such. Paul Tappan disagreed with Sutherland's definition and was of the opinion that only conduct regarded as criminal by the law should be included in the notion of white collar crime. Another opinion was to set aside the term white-collar crime and replace it with “elite deviance” to refer not only to actual crimes committed by the elite but also to deviant activities of the elite that do not violate the criminal law. From the perspective of law and legal theory, however, the term “elite deviance” is highly problematic. The discipline of criminal law is defined by what is criminal. A wide range of critically important procedural questions turns on whether conduct alleged is violative of the criminal law. To replace the concept of white collar crime with the concept of deviant behaviour is thus to blur a distinction that, at least in legal discourse, is foundational.
The classification of White-collar Crime into Occupational and Corporate Crime:
Marshall Clinard and Richard Quinney divided white-collar crime into occupational crime and corporate crime. The first category is meant to include offenses committed by corporations and their officials for the benefit of the corporation. The most glaring example and common form of occupational crime is employee theft and vandalism. The second kind of crime is defined as that which is committed “in the course of activity in a legitimate occupation” and is meant to apply to offenses involving persons at all levels of the social structure. This bi-polar distinction may be helpful to some extent, but it is somewhat unstable; the category of occupational crime should be limited so that it does not also involve blue collar occupational crimes. However, it could be argued that the supposed differences between organizational and occupational crime are “distinctions without a difference.”
Causes of White-collar crimes:
There is an opinion which suggests that white-collar criminals are uniquely motivated by macro-economic, social, and organizational factors such as fear of failure in a competitive capitalist society; Benson and Moore, for example, describe motives unique to white-collar offenders "specifically related to their class position in the larger social structure." Paul Jesilow proposed an Adam Smith-like argument that "white-collar crime is encouraged when excessive regulation of the marketplace is introduced" and that the remedy is a more perfect capitalism. From this vantage point, the white-collar criminal circumvents law not for nefarious purposes but rather in pursuit of profits which serve not only his or her self-interest but those of society as well. Here, "white-collar crime in the business world is a thrust against artificially imposed legal restraint," and it is government regulators who are the villains. Another economic perspective on crime, the fraud minimalist position, suggests that much white-collar crime is the result of bad judgement, bad luck, and unanticipated financial circumstances facing the moral agents--the outcome of "risky business" rather than criminal intent. A more commonly held view associates white-collar crime with the failure of government to regulate competitive capitalists.
Mens-Rea vis-a-vis White-collar crime:
What is the mental state of a person who deliberately (ab)uses the power, faith and confidence reposed in him by the shareholders, by the employees, by the society and by every nation? It is a well established fact that there can be no crime of any nature without an evil mind. Even is strict or absolute liability some mental element is required. That is why men-rea or actus non facit reum nisi mens sit rea is considered a fundamental principle of penal liability. The meaning of the term “actus non facit reum nisi mens sit rea” is that intent and act must both concur to constitute a crime. The primary question which merits an answer is whether a white-collar crime is to be considered a crime of Absolute or Strict liability, and if it is to be, then what should be the requisite mens-rea required for committing the same.
White Collar Crime does not take place one fine day. They involve shady deals, cold logical planning of deceit, beguiled misrepresentation to innocent stakeholders and keeping the things in dark in from the regulatory bodies, both internal and external. The act of crime of any normal criminal can be at spur of moment, sporadic, desperate attempt to ends but the accused of white collar crime are men of very high intellectual stature, both social and professional, having the command of best resources at their disposal. The best of lawyers and law firms specialise in defending such cases. Hence it is imperative that we dig further into the mental ingredients that go into creating frauds of scale which leaves the whole world gaping. Whether the omission of mental element is deliberate attempt to make the “white collar crime” a strict liability offence or common offence.
WHITE COLLAR CRIMES WITH SPECIAL EMPHASIS ON CORPORATE AND CYBER CRIMES
WHITE COLLAR CRIMES: THE INDIAN EXPERIENCE
The Santhanam Committee report for the first time attached great importance to the emergence of offences and mal-practices known as “white-collar” crime, which was also acknowledged by the 29th Law commission report in 1972. The Santhanam Committee report recognised the emergence of ‘mass society' with small controlling elite, encouraging growth of monopolies and the deviance from ethical behaviour which led to growth of white-collar and economic crimes. The report expressed its concern towards such crimes by opining that this crime was more dangerous, not only because the financial stakes were higher but also they caused irreparable damage to public morals. The awareness of the common man towards these crimes is dismal or there is a ‘relatively unorganised resentment of the public' towards such crimes as the violations in such cases can be appreciated only by experts, secondly due to the complexity of these crimes they cannot be easily presented as news and probably because these agencies of communication are owned by businessmen involved in the violations of many of these laws. White-collar crime, it is stated, goes undetected because it “transcends the visibility of ordinary cheating practices of small merchants”. It can however, be gathered from reports of investigating committees or from conversation with intimate friends.
Another fact that merits serious attention is that white-collar crimes being a characteristic of acquisitive and affluent society, they do not exist in India on the scale on which it exists in England and America, but is not totally absent. The Indian society is by no means affluent, but it is gradually becoming acquisitive, particularly in the urban areas. Corruption of administrative officers, embezzlement by top officials of MNC's and corporations, evasion of tax (particularly income-tax) by persons who fall in the higher income group, smuggling of goods which are scarce in the our country (such as gold, watches and transistor-radio sets) and deliberate breach of foreign exchange regulations, may be cited as instances of white-collar crime in our country.