What is a White-Collar Crime?
Though white-collar crimes are non-violent yet they can impact creating economic instability in a country. The rich and elite class commit this crime with pre-planning and financial motives in mind. In the year 2019, 3766 white-collar frauds were detected in India. And to prevent your organization from such crimes, you need to hire an expert law agency such as Lex Solutions.
To understand the severity of these crimes and the importance of financial lawyers, it is essential to look at some popular cases of white-collar crime in India.
Defining White-Collar Crime
The term white-collar has become synonymous with 21st-century lingo and is especially popular among people looking to carve a space among the upper echelons of society. While a large portion of the Indian diaspora vies for much-coveted ‘white-collar’ jobs, they are unaware of this term’s meaning. Ironically, the term white-collar has a dark side- It was coined in 1939 by Sociologist Edwin Sutherland and is associated with more than just top berths in the bureaucracy and among the crème-de-la-crème of society.
What is the characteristic of white-collar crime?
- ‘White-Collar’ is also associated with crimes of a financial and non-violent nature, committed by individuals or companies.
- White-Collar Crimes are usually committed by people from a financially sound background and enviable social status, such as businessmen, bureaucrats, venture capitalists, celebrities, etc. As per Investopedia, ‘white-collar crimes have the power to enrich their perpetrators financially.’
- They employ deception to conceal other criminal conduct, acquire money, property, or any other gain.
Also Read: What is White-collar crime?
Some common white-collar crimes include
- Bank Fraud
- Bankruptcy Fraud
- Credit Card Fraud
- Money Laundering
- Tax Evasion
- Insurance Fraud
- Insider Trading
A serious white-collar crime may warrant help from white-collar crime lawyers from top-notch law firms in Chandigarh. In the words of ace American lawyer Mr. Paul D. Petrus Jr, “For serious white-collar offenses, you need a serious defense”. A lawyer can make or break a case, and anyone accused of white-collar offenses needs an advocate or a reputed Law firm like, Lex Solutions, who can make sense of the complications of their case while giving them personalized representation.
White collar crime in India case study
It is essential to look at some famous white-collar crime cases in India to understand the severity of white-collar crimes and the importance of financial lawyers.
Also Read: What is White-collar crime?
Sukesh Chandrasekhar Fraud
Conman Sukesh Chandrasekhar made headlines for his ostentatiously expensive lifestyle, thanks to the serial con gigs he undertook. A school dropout, Sukesh voiced different government officials, including incumbent home minister Amit Shah, to swindle millions out of unsuspecting parties. His name was also associated with Bollywood stars Jacqueline Fernandes and Nora Fatehi, who he showered with expensive cars, luxury bags and even premium racehorses!
In recent news, Sukesh admittedly helped AIADMK deputy general secretary TTV Dhinakaran secure a favourable position with the election commission. The Delhi Police Crime Branch first arrested Sukesh and Dhinakaran in 2017 in the election commission bribery case, and the probe is still underway. Reportedly, Sukesh has conned at least 200 crore rupees out of several unsuspecting victims while lodged in Delhi’s Tihar Jail- This includes Aditi Singh, wife of Fortis healthcare promoter Shivinder Singh who was also in jail over money laundering charges. Easily, Sukesh is one of the many scions of white-collar crimes in India.
The Satyam scandal came to light most dramatically and is easily one of the biggest accounting frauds in this country. Satyam Computers’ B Ramalingam Raju confessed to cooking his books in a testimonial published in the Times of India in 2009. As per Lego desk, the 14000-crore scam contributed to the crippling recession of 2009. SEBI cracked down on Raju and his accomplices, holding them accountable for financial fraud, insider trading and other major financial scams. As per a Lego Desk report, SEBI ordered the accused to dish out 3000 crore rupees in 45 days and debarred them from accessing security markets for 14 years.
Saradha Chit Fund Case
Hundreds from the lower-income bracket died by suicide after this scam came to light. Saradha Chit fund was a Ponzi scheme that circulated as a chit fund in Bengal- thus earning the nickname ‘Bonzi’. As per a Trade Brains report, Mastermind Sudipto Sen lured rural investors into this scheme by offering sky-high returns and adding a sprinkle of religion through ‘Saradha’- Sarada Devi was the wife of one of Bengal’s most revered saints, Ramakrishna Paramahansa.
The group collected a whopping 300 billion rupees from a million investors before collapsing. Moreover, the group was endorsed on top platforms by some of the film fraternity’s most credulous actors. Sen used the money to fund regional films, buy local football teams, and several TV news channels.
Sen paid hefty sums to political heavyweights to stifle the voices of affected investors. Saradha continued to create shell companies to distract SBI from its investigation- Over 200 companies were created in this process. Several actions were taken against Sen and his associates- for instance, SEBI barred them from the securities market till all refunds were made.
After confessing his crimes to the CBI, Sen fled, post which a series of FIRs were filed against him.CM Mamata Banerjee created a 70-million-dollar relief fund for affected low-income depositors and an SIT to probe the matter continuously. As of 2021, and as per Trade Brains, Sen has 98 cases pending against him and has already spent over seven years in jail.
Harshad Mehta Scam
The Harshad Mehta Scam is the most prominent out of all given white-collar crime examples. ‘Scam 1992’ has immortalized the life and times of Bombay’s most prominent businessman and stockbroker, Harshad Mehta. Mehta was a big name in the trading circles of Mumbai and was known to manipulate stock prices, causing a massive rise in share prices. As per Lego Desk, Mehta earned slightly more than 5000 crore rupees through his manipulation tactics.
Renowned financial journalist Sucheta Dalal finally exposed the scam through her stellar investigative work. However, Mehta’s act was more immoral than illegal, as he took advantage of existing systemic loopholes. After this scam came to light, SEBI famously changed market rules and regulations. As per Lego Desk, Mehta’s tactics caused panic selling in the market, which in turn caused the market to lose a whopping $0.1 million each day.
White collar crime punishment
- For committing fraud– According to section 447 of the Companies Act of 2013, a person convicted of a fraud offense faces a minimum 6-month sentence and a maximum 10-year sentence in jail.
- False statement penalties: According to the Companies Act of 2013, Section 448, a person who knowingly makes a false statement will be held accountable for their wrongdoing.
- For false evidence: According to the Companies Act of 2013, section 449, if someone presents false evidence the court, both imprisonment and a fine will be used to punish him. The minimum sentence of 3 years, the maximum of 7 years, and the maximum fine of 10 lakh rupees are all possible.
How to prevent white collar crime
- Instill business ethics in your employees- Employ people who know of work ethics and moral behaviour. And also make the employees understand the repercussions they will have to face if they break corporate ethics.
- Establish a monitoring system in the organization- Install security systems such as cameras, and motion sensors in your organization to keep surveillance of employees.
- Consult a corporate crime lawyer- Hiring a top-notch white collar firm that fights the cases against the white collar crimes such as Lex Solutions can help your company safeguard itself from white-collar crimes. The lawyers will also suggest you take the appropriate legal action for you in case of any employee commits any corporate crime.
- Regulate Internet usage and install cyber protection- Most white-collar crimes are committed online. Hence, you should prohibit employees’ access to problematic websites. And install cyber security software to save your important data from hackers.
These were some of the top case studies from the world of white-collar crimes. They give deep insight into what are white-collar crimes and how can white-collar crime be prevented? And if you need any consultation or want to hire a corporate crime lawyer for your organization, feel free to connect with Lex Solutions.
Frequently Asked Questions
- What is white collar crime criminology?
People commit white collar crimes due to greed for money, loopholes in the rules & regulations of the organization/legal system, lack of accountability, lack of economic instability and technological and industrial development, etc.
- What is blue collar vs white-collar crime?
The major difference between these crimes is the social strata of criminals. Blue-collar crimes are committed by people coming from lower strata who commit criminal activities such as robbery, murder, sexual assault, etc. Whereas White collar crimes are committed by influential classes of society who commit financially driven crimes.
- What are examples of white collar crime in medical profession?
Helping in illegal abortions, false medical certificates, and producing fraudulent medications are certain examples of white collar crime.
- What can be the remedies for white collar crime cases in India?
several corrective actions that should be taken in response to white-collar crimes in India are-
- The Indian Penal Code should have a separate chapter for white-collar crime.
- Establishment of special tribunals with the authority to impose severe punishments and fines in cases of white-collar offenses.
- Creating awareness among the public for white-collar crimes through the press, social media, newspapers, etc.
- What is white collar crime sociology in India?
It is a nonviolent crime that is frequently characterized by deception or concealment in order to get or prevent losing money or property, or to gain a competitive advantage for oneself or a company.