White Collar Crime



Professional crime is another term for white-collar crime. Property crimes, commercial crimes, violation of environmental and health safety legislation, and so forth. White-collar crimes are divided into several categories, which I shall discuss in depth in my post. In this essay, I will discuss different topics such as meaning, origins, classification, types, consequences, causes and elements that influence white-collar crime As we all know, crime in India is steadily increasing. Crimes are taking place everywhere. I’ll discuss white-collar crime in India, as well as the steps taken to combat it, as well as the consequences. A person can commit a crime while working or unemployed. It takes two forms: fraud and theft. There are many nations in the modern era that have divided crimes into laws. Corporate crime, which involves the entire company, is one of the most common types of crime. White-collar crimes and corporate crimes are similar in that they both occur in the business world. The distinction between the two is that white-collar crimes benefit the company. Employees who engage in criminal behaviour commit white-collar crimes. Let us start with the article. Professional crime is another term for white-collar crime. These include property crimes, economic crimes, violations of environmental and health safety laws, and so on. There are several types of white-collar crimes, which I will explain in more detail later.


Many writers characterise crime as anti-social, immoral, or wicked activity. However, according to the legal definition, a crime is any act that is considered to be socially detrimental in a state and hence prohibited by law under penalty of imprisonment. A crime is an act or omission that is unlawful, illegal, or infringes on legal rules and is penalised by law.

White-collar crime is a type of non-violent crime in which the primary motivation is usually financial.White-collar criminals typically hold a professional position of authority and/or prestige, as well as a position that pays substantially above average.

Edwin Sutherland, a sociologist and criminologist, developed the term “white-collar crime” in the 1930s. He used the word to characterise the types of crimes perpetrated by “persons of respectability” – those seen as having a high social rank. Sutherland later established the

Bloomington School of Criminology at Indiana State University. The top levels of society were regarded to be virtually incapable of engaging in such criminal activity before to Sutherland’s development of the notion of white-collar crime. When Sutherland initially wrote a book on the subject, some of America’s largest corporations successfully sued to have the book substantially suppressed.


White-collar crime is most commonly linked with E.H. Sutherland, whose pioneering work in this area drew criminologists’ attention to its depressing implications on the overall criminal picture. Apart from classic crimes such as assault, robbery, decoity, murder, rape, kidnapping, and other acts of violence, Sutherland pointed out that certain anti-social activities are carried out by the top strata in the course of their business. Morris argued in 1934 that anti-social behaviours perpetrated by people of high position in the course of their job should be classified as crimes and punished. Finally, E.H. Sutherland underlined that these ‘upper world’ crimes, which are committed by members of the upper socio-economic groups in the course of their jobs, should be referred to as white-collar crimes to separate them from traditional crimes, which he referred to as “blue-collar crimes.”

The Carrier’s case, was the first case of white collar crime in England, dating back to 1473. In this situation, the agent was entrusted with the task of transporting wool from one location to another on behalf of the principal. Some of the wool was stolen by the agent, who was found guilty. Following this case, the English Court established the notion of ‘breaking the bulk,’ which means that the bailee who was given possession of goods attempted to open it and misappropriate the contents. The rise of industrial capitalism, on the other hand, has pushed criminality to new heights. The bourgeois establishment thrives on committing such acts out of greed and unhappiness in order to acquire and achieve more. The Sherman Antitrust Act was passed in 1890 in the United States, making monopolistic activities unlawful. The sanctions placed on white collar criminals in the United Kingdom, as well as other countries’ adoption of competition or antitrust laws, were not as broad as the Sherman Act. In the late eighteenth and early nineteenth centuries, a number of journalists sparked public outcry for reform. By 1914, Congress was perceived as working hard to reinforce the Sherman Act’s attitudes. In terms of dealing with monopolistic illegal practices, this Act proved to be more harsh than the Sherman Act.


Coleman and Moynihan noted that Edwin Sutherland’s definition had some unclear terms, such as:It doesn’t specify who these ‘persons of responsibility and status’ will be.’High social status person’ is also unclear. It’s puzzling because the legal meaning of the phrase may differ from the broader definition.Sutherland’s definition did not take into account the person’s socioeconomic situation. It simply demonstrated how white collar crimes are dependent on their type and conditions of commission. Mens rea, or a guilty mentality, and actus reus, or improper activity, are two necessary conditions for a crime to be committed. Sutherland’s definition, on the other hand, argues that white collar crimes may not always require mens rea. Morris’s Remarks Albert Morris proposed in 1934 that the criminal actions that persons of high social rank engage in during the course of their work be lumped into the same category of crime as the illegal conduct. He also stated that it should be criminalized.

Sutherland resurfaced and clarified that ‘white collar crimes’ are crimes perpetrated by people from high socioeconomic classes in the course of their employment. Furthermore, traditional offences would be referred to as “blue collar crime.”As a result, he distinguished between white collar crimes, such as corruption, bribery, and fraud, and blue-collar crimes, such as robbery, theft, and other classic crimes. Following this, criminology fully accepted the idea of ‘white collar crimes’ in 1941.


1) Effect on the company

White collar crime costs businesses a lot of money. To make up for the loss, these businesses boost the price of their product, which reduces the number of customers that buy it. This is based on the law of demand, which holds that, other things being equal, when the price of an item rises, demand falls, and when the price falls, demand grows.In other words, a commodity’s price is inversely proportionate to its demand. Employee pay are reduced since the company is losing money. Several employees’ positions were sometimes eliminated by the corporation. It is difficult for the company’s investors and employees to repay their loans. People also find it difficult to obtain their credits.

2) Effect on society

White collar crimes are destructive to society because they are committed by persons who should be held up as moral role models and who must act properly. As a result, society gets polluted. When a former director of Andhra Bank and the directors of Sterling Biotech, a Gujarat-based pharma company, were arrested for their roles in a Rs. 5000 crore fraud case. They used to take money from various benami corporations’ bank accounts. This was a massive con that terrified the public. At addition, the Punjab National Bank (PNB) discovered fraudulent transactions totaling 11, 346 crore rupees in its Mumbai branch in 2018. According to Business World, “the staff there used to falsify LoU (Letter of Understanding) for the buyer’s credit to the companies of Nirav Modi and Gitanjali Group.”

3) Effect on offenders

The authorities have yet to agree on what constitutes white collar crime. Because there are no accurate statistics available to analyse the causes and effects of such crimes, the government is unable to adopt precise preventative actions. Furthermore, despite the fact that these crimes are on the rise, they are rarely recorded. Because these crimes are performed in camera, there are no eyewitnesses. This implies that the offenders commit these crimes while sitting in a locked room or in their own space, using their computers, and no one can see what they are doing.This makes catching the criminals tough. All of these loopholes encourage offenders to conduct such crimes without fear, because the punishment is also relatively light compared to blue-collar offences. Offenders are frequently observed roaming free, posing a threat to society.


White-collar crimes can be broadly grouped into four primary groups: –

  1. Ad hoc crimes, often known as personal crimes, are white-collar crimes in which the criminal pursues his own personal goal without having any face-to-face interaction with the victim.Ad hoc white-collar crimes include computer hacking, credit card fraud, tax evasion, and so on.
  2. white-collar crimes involving a violation of trust or faith put on the perpetrator by an individual or entity. Insider trading, financial embezzlement, and financial mismanagement Creating false payrolls, for example, is a common example of this form of white-collar crime.
  3. White-collar crimes are committed by individuals in high positions or status who conduct crimes as a result of and in support of their organisational operations. People in high positions commit such crimes not because it is their main goal, but because they see a chance to make quick money or get unfair benefits by exploiting their authority or influence in the course of their jobs. Fraudulent medical bill claims, bogus educational institutions, and the issuance of fake mark sheets/certificates are examples of such crimes.
  4. White-collar crimes can be committed in the course of doing business. trademark or copyright infringement, patent or competition law violations, and so on. Domain name infringement and other corporate crimes are examples of this form of white-collar crime.


There are four different categories of white-collar crimes, and I’ll describe each one with examples. The following are some of them:


Fraud is also called cheating. Fraud is committed by misrepresenting facts in order to gain something in return.Fraud is done by misrepresenting facts through words and actions for financial gains. This action results in a financial injury.

Mahesh answered to a classified ad for a rental unit. He visited with the alleged landlord, viewed the property, and agreed to sign a lease to rent it. Joseph pre-paid the security deposit and the first month’s rent.When Mahesh returned to the apartment the following week to pick up the key, he discovered that it was inhabited by someone else. After some research, Mahesh discovered that the flat was not for rent at all, and that the man with whom he met and provided the money was not the property owner. In this case of white-collar crime, a man pretended to be the owner in order to defraud a potential tenant of money.


Extortion is the practise of gaining money or property by threatening the victim’s property or loved ones, or by making a fraudulent claim of right. The crime of robbery is usually considered as a direct threat to injure the victim. Coercion is used to gain advantage.

A is the individual who is threatening to publish defamatory information about B. Unless and until Z gives him the money, X will not proceed with this. As a result, A asks B to give him the money. As a result, A is considered to have committed extortion in this case.


It is described as the offering, giving, receiving, or soliciting of any item of value in order to influence the behaviour of a public or legal authority or other individual. A bribe is an illegal or unethical present given to sway the behaviour of the recipient. It could be money, products, or property.

Drill Tech is working on a horizontal drilling project for a firm that is putting in a pipeline that passes through north city. The city engineering office is taking its time to approve the drilling project, raising question after question about it. Mr. Smith, Drill Tech’s Vice President of Hole Drilling, takes Sam, the city engineer, to lunch and offers to “give” $100,000 to his children’s school fund if Sam will simply finish the approval procedure and enable Drill Tech to move forward with the project. This is bribery because the goal is to get a city official to do something that will benefit the company’s business and profits. In this case of white-collar crime, Drill Tech has attempted to commit an illegal act. Sam will have broken the law if he accepts the bribe and approves the drilling project.


It’s also a sort of fraud. It is illegal for a person or small number of persons inside a corporation to engage in a securities transaction, which is the selling or purchase of stocks, unless they have particular knowledge not available to others.

Jeff is employed by a private business that is developing a device that may identify certain serious cardiac conditions. While at work one day, Jeff receives an email addressed to his supervisor. The communication said that the item will be available on a specific date that had not been made public. Jeff phones his relatives and friends right away, advising them to buy company stock the appropriate way. The company’s stock has already been purchased out by the time the product is released, which quickly raises stock values. In this case of white-collar crime, Jeff utilized “insider information” to offer his friends and family an advantage, allowing them to purchase business stock at a discounted price.

Following are the examples of White-collar crimes:-

Tax evasions ,credit and frauds, bank and postal frauds, frauds of social security welfare,  Insurance frauds, Embezzlement of self-dealing business, fraud against government, food and drugs violations, deceptive advertising, malpractices in medical profession,  Illicit liquor sale, narcotic drugs etc., commercial espionage, land transaction fraud, charity and religious endowment frauds, crimes by lawyers, fake claims etc., bribery and graft by public servant,  hoardings, black-marketing, adulteration, smuggling, international crimes, human organ racket.


1) Greed

Machiavelli, the creator of modern political philosophy, felt that men are selfish by nature. He claimed that a man may forget his father’s death more quickly than the loss of his inheritance. The same is true when it comes to white collar crime. If not out of greed, why would a man of high social rank and prominence, who is financially secure, do such crimes?

2) Easy, swift and prolong effect

Criminals have been introduced to fresh techniques of committing white collar crimes as a result of rapidly developing technology, economic, and political pressure. Technology has also made doing harm or causing loss to the other person easier and faster. Furthermore, the cost of such crimes is far higher than the cost of other crimes such as murder, robbery, or burglary, and the victim will require time to recover. This would reduce the level of competitiveness.

3) Competition

Herbert Spencer coined the expression “survival of the fittest” after reading Darwin’s “On the Origin of Species.” This indicates that there will always be a rivalry between species, with the best adapter surviving.

4) Lack of stringent law

Because the internet and digital methods of payment facilitate the majority of these crimes, law enforcement officials are hesitant to pursue these cases because researching and tracking them becomes a tough and time-consuming task. It’s tough to track them down because they’re frequently committed in the quiet of a home or office, with no eyewitnesses present.


Punishment for Fraud

Fraudulent acts are punishable under Section 447 of the Companies Act of 2013. It stipulates that if a person is found guilty of committing a fraud offence, he will be imprisoned for at least 6 months and up to 10 years. He will also face a fine that will not be less than the amount involved in the fraud and may go up to three times the amount involved in the scam. If the fraud was conducted against the general public’s interest, the sentence would be no less than three years in jail.

Punishment for false statement

According to Section 448 of the Companies Act of 2013, if a person makes a false statement knowing it is false or omits any material truth knowing it is material, he would be held accountable for his wrongful act. This false statement can be made in the form of a return, report, certificate, financial statement, prospectus, statement, or any other document needed for the purposes set forth in this Act or its rules.

Punishment when no specific punishment or penalty has been provided

Section 450 of the Companies Act, 2013 provides that if a punishment or penalty is imposed for a crime committed by an executive of a company or any other person who violates any of the provisions of this act, he may be fined up to ten lakhs rupees. If the violation continues, the offender will be ordered to pay a fine of up to 1,000 rupees per day until the intervention is stopped.

Punishment when the default has been repeated

When a company or any officer of that company commits an offence for which he has already been penalized and faced imprisonment, and commits the same offence again within three years, that company and every one of those officers involved in the commission of the offence for the second time shall be punished with twice the amount of fine, in addition to the term of imprisonment provided in section 451 of the Companies Act, 2013. However, if the offence was committed after a period of three years since the first time it was committed, this rule would not apply.


Abhay Singh Chautala v. C.B.I. 

In the present case, a charge sheet was brought against two appellants in separate trials for committing an offence under Sections 13(1)(e) and 13(2) of the Prevention of Corruption Act, 1988, read with Section 109 of the Indian Penal Code, 1860. Both accused were charged of amassing disproportionate fortune in relation to their salary while serving in the Legislative Assembly. When the Central Bureau of Inquiry (CBI) began its investigation, it was discovered that the appellant’s father had acquired large properties, as had the appellants. The appellant had furnished a completely different office(s) for the accused than they were really holding at the time, according to the High Court. As a result, the sanction imposed under Section 19 of the Prevention of Corruption Act of 1988 was deemed invalid.

SEBI v. Burman Plantation and Others

The learned counsel for SEBI contended before the Allahabad High Court that the business is being falsely charged since it was unable to fulfill its debts, including payments to its investors. When the company’s advertisement was questioned, the council stated that the advertisement was issued in 2003 and the order was issued in 2004, when the company was unable to repay its debts. Furthermore, the amount of money claimed by the investors was never mentioned. By modifying the legislation under section 24(1) of the SEBI Act, the counsel made the lawmakers enhance the sentence from one year to ten years, as well as the fine, which can now reach 25 crores. Ravi Arora, the accused, was finally found guilty.

The Supreme Court observed in M.H. Hoskot VS State of Maharashtra, criticising the session court for the incorrect sentencing: “Social defence is the criminological underpinning of punishment.” The court fails to serve social justice by ignoring the enormous harm to society inherent in economic crimes committed by the upper-class’mafia.’ Soft sentencing justice is a grave injustice in which many innocent people may suffer.”

In Som Prakash VS State of Delhi, the Supreme Court stated its policy on the punishment of white-collar crime in the context of public servant corruption. To eliminate such social dangers, harsh punishment is required. It was said that, despite the necessity for all-out efforts to seek down bigger offenders, courts could not slow down because greater criminals were about to be arrested.

The Supreme Court stated in P.K. Tejani VS M.R. Dange, a case under the Prevention of Food Adulteration Legislation, that “it is trite law that in food offences strict responsibility is the rule not only under Indian act but throughout the world.”Regardless of scanter, bad faith, or mens rea, Section 7 imposes an absolute obligation. You are guilty if you sold any food item in violation of any subsection of Section 7. There is no longer any debate.


White collar crimes have two startling characteristics: first, they are nonviolent crimes, despite the criminals’ drive to obtain power or a sense of entitlement, and second, they are perpetrated by persons in positions of higher authority.However, similar crimes are also perpetrated by low-paid underlings, even if the mastermind behind the crime is a wealthy individual with a higher social rank in his profession. White collar crimes are frequently perpetrated as a result of peer pressure or as a result of the company’s culture. The media has a critical role to play in reducing the rising rate of white collar crime. The majority of white collar crimes go unreported, according to reports. So, if the media becomes more active in publishing higher-level frauds and scams and revealing how people in higher positions in a company use their power arbitrarily, as well as making efforts to educate people about white collar crimes and how to avoid corrupt practices, this will undoubtedly help to reduce the rate at which white collar crimes are committed.


  1. https://www.britannica.com/topic/white-collar-crime
  2. https://www.jstor.org/stable/pdf/2085628.pdfv
  3. Criminology and Penology- Prof. N.V. Paranjape
  4. https://blog.ipleaders.in/white-collar-crimes/
  5. https://shodhganga.inflibnet.ac.in/bitstream/10603/43935/8/08_chapter%202.pdf

Author: Fatima Tuz Zahra,
Jamia Hamdard, 4th year, student

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