Since time immemorial, society has always had a proclivity to lionize those of its members that it considers to be its most valuable assets – doctors, teachers, lawyers, bankers, businessmen. Those who are distinguished, and cut far above the rest for their excellence, expertise, influence or affluence. However, with rapid industrialization and development, and the relentless pursuit for profit making, there has emerged a new class of crime that prevails among the upper strata of the society – the white collar crimes. These generally consist of unethical or deceitful practices driven by financial motivations, often linked to the occupation or social position held by the offendor
One of the most infamous cases of white collar crime in India was that of the Satyam Scam in 2009. Satyam Computer Services was a reputed, profitable and one of the fastest growing services, and a joint entrepreneurial venture by the Raju brothers. It was revealed that the accounts were manipulated to make it seem more lucrative an establishment than it really was. Assets were overstated, liabilities were under reported, fake invoices were created, and profits were blown up, causing a fraud of over 7000 crore. This intervened with shareholders’ right to information, employees reputation, client trust as well as tax accounts maintained by the government.
Another prominent case was that of the PNB Bank Fraud case. In this case, Nirav Modi and Mehul Choksi defrauded Punjab National Bank. With help from bank officials, there was fraudulent issue of loan via of Letters of Undertaking (LoU) to companies owned by the two in Hong Kong and Sharjah. These transactions were were not registered in the Core Banking Solution (CBS ) System of the bank and hence were not monitored. A series of LOUs were issued one after the other, with new ones being used to repay the initial loans, which resulted in a rollover credit that ballooned into a billion dollar fraud.
Besides the banking sector, crimes can also occur in other professional occupations in the society. In the legal sector, creation of false evidence is a crime. In the education sector, replacing merit based admissions with provision of admission on the basis of donations is a white collar crime, and so is awarding of fake degree certificates. In the medical sector, creation of spurious medical certificates, illegal abortions, sale of prohibited drugs and, unwarranted prolonging of treatment to increase the bill are practices that fall under white collar crimes. Bribery, cybercrime, identity theft, money laundering, adulteration – all fall into the category of white collar criminal activities.
The gravity of such crimes was first recognized by the Santhanam Committee in 1962. It has repercussions that far transcend conventional crimes as it juggles with insurmountable stakes such as the huge monetary amounts in banking fraud or the endangering of human life due to unethical medical practices. In addition, it also precipitates a culture of tainted professional ethics, that immutably erodes the morality of the community.
A white Collar crime, unlike traditional crimes, is never a day’s affair. It is committed by elite, intellectual, respectable members of the society who have expertise in their respective professional spheres. They are not only familiar with the intricacies of the law and its implementation with respect to their particular fields, but are also well aware of the loopholes that they need to pursue in order to evade the law and manipulate legal regulations. In order to carry out their desired ends, these offenders also have access to the required resources such as wealth, technological know how, political power or a network of human resources that is willing to provide them with back end support in return for other favours, mercenary or otherwise. This means that despite the widespread impact of these crimes, there arise various obstructions in the identification of these crimes and conviction of the offenders, given the social context interwoven in the legal mechanism.
Although the Indian Penal Code does not have an overarching section on white collar crimes, it deals with various offences under this category such as bribery, forgery, adulteration, misappropriation and criminal breach of trust. There are also various statutes such as Information Technology Act 2005, Companies Act 1960 and Prevention of Money Laundering Act 2002 that establish regulations for different sectors. Recently, the Fugitive Economic Offenders Act was enacted, that empowers the authorities to confiscate the assets and properties of absconding economic offenders. However these laws are insufficient in the war against white collar crime. Laws are not stringent in nature, and allow for disproportionately mild sentencing and availability of bail, given the grave repercussions.
Primary reason behind this is the fact that the members of the legislature, who are responsible for creating laws that keep these crimes at bay, are often themselves involved in such crimes and have a vested interest to not churn out the most stringent of laws.
In addition to the failings in the legal system, there also exist shortcomings linked to societal perceptions. There is a general lack of awareness and seriousness with respect to these crimes, as it is often not seen as a “real” crime by the society. Unlike criminal assault or violence premised offences, that pander to the common man’s biased fantasies of what true crime is all about , white collar crimes do not regale with tales of gore. They are often complex in nature, difficult to both explain and comprehend, and often require one to have higher levels of education or specialized knowledge to even understand that the act was criminal in the first place. Portrayal by media also plays a huge role in believing the gravity of these crimes. It is often presented as an insular, professional scandal committed by a particular individual or organization against another, rather than a true crime against the society, which directly or indirectly impacts various members of the society. Thus the common man often feels distanced from such incidents, thus precipitating a culture of “authorization” with respect to these crimes, and reinforcing the narrative that these scandals are not “real” crimes.
As technology advances and occupations become more specialized, it is also time for us to keep up with these changes to assess and evolve the way we look at crime, offenders and justice. Perhaps we should give less leeway due to the colour of the collar, and accrue more culpability in consideration of the cold logical scheming and arrogant disregard for consequences that uniquely paint these crimes.