White Collar Crime - Crime Committed by a Person of Respectability and High Social Status in Course of his Occupation

Such sorts of crimes are not apparent or visible on the surface but act remains under-neath, deep rooted not being disastrous to the individuals but to the society at large specially having much pressure on the exchequer, In the fifties just after independence of our country, the term “White Collar Crime” was generally understood to be the crimes related to tax evasion which are not necessarily being committed either in connection with an occupation or by persons of high social statuts but rather as a general matter committed by the relatively well-to-do. The definition of White Collar Crime excludes the so called street crimes such as burglary, robbery or aggravated assault, which are occasionally but not generally committed by the persons of means but by the go of the day such crimes are not now restricted to crimes of monetary concealment or aspects towards tax evasion. The scope of White Collar criminality is being expanded day to day. It has now reached its peak. Until late 19th Century, the economic life of a country was largely unregulated, but over the years it became clear that the business enterprises had to be regulated in order to protect both the public and business itself to maintain the standards of health and safety, to assist the poor and the ignorant to obtain the decent housing and other necessities of life and to maintain the economy at a high level production. Today, virtually every aspect of business life is attempted to be regulated in one or the other way keeping in view the public welfare. Consequently various enactments have been passed by the Legislature which include Food and Drug Laws, Safety and Health Laws, Licencing system in different kinds of business, Housing Codes and multitude of other regulatory statutes. To minimise exploitation, many of these regulatory laws are enforced if not in maximum but in part by criminal sanctions.  Unlike, other types of offenders, white collar offenders by definition are enjoying a variety of social and economic advantages. They have received better education and are better equipped to earn their livelihood through skilled and other means. In the language of Southerland, “It is very clear that the criminal behaviour of business-men cannot be explained by poverty, in the usual sense, or by bad housing or lack of recreational facilities, or feeble mindedness or emotional instability. The business leaders are capable of being emotionally balanced and in a sense pathological.”  The street crimes as mentioned already may be expanded of its modus operandi or mens rea or the intention behind it regarding existence or bringing up in a society of feeble mindedness, poverty stricken or emotional instability but white collar crimes cannot be expanded in that way. Its expansion can be said although not fully but partly depending on growing moral degradation, individualistic selfishness and high aspirations towards reaching of infinite and limitless so called earthly happiness and total bankruptcy of moral ethos and ethics and forgetfullness and shutting eyes towards the traditional and legendary values of life not only of a community but of the country as a whole.  It is important to recognise the impact of white collar crime label both as applied to offender and offences. Crimes such as employee theft range from pilfering by the truck drivers to embezzelement by the top executives. Cheating the Govt. may include failure to report tips, or other cash receipts and major income of Govt. fraud. And just as burglars range from relatively successful professional in his 30’s or 40’s to the 13 yrs. old amateur from the slums, white collar offenders include very different types of people. Tax evasion, taking of bribe by the top executives in granting contract for the department or the organisation are known white collar crimes. Suppression of income by the business executives or the business organisation giving scope to the executives to do so by mentioning the salary of the executives in papers to a negligible amount while giving the black amount by cash, that too, through black money are also known offences of white collar crime. But I can say some other prevalent crimes which have developed recently. I have come across some of such cases which made me think over as to where we are leading to. In many of the Engineering departments either in the State or in the Centre, 4th grade employees or the Mazdoors or the Technicians are being engaged either as a Muster roll or as daily wages earners and by taking advantage of section 25(f) of the Industrial Disputes Act, after 240 days of such daily wage earners or Mazdoors or Muster rolls, their services are being regularised when the Govt. sanctioned posts are limited. In a recent case, I could find in such an office there were only 240 recognised sanctioned posts of 4th grade employees but by the process as mentioned above in total 3200 employees had been engaged and they were found to be working for last 16-18 years. When this came to the notice of the higher authorities then order was passed to sack them. Those poor employees had knocked the doors of the High Court and ultimately to the Supreme Court. The Apex Court held that such back door method of employment is against the constitutional obligation and those employees being illegally appointed cannot be regularised nor they can remain in service but when those employees had served for more than one and half decade then the Apex Court taking a humane approach asked the State Govt. to make some scheme so that in phased manner those employees could be regularised. The Apex Court could find that throwing away of those employees from the service would not only mean loss of service to the employees but making the family members starve when those employees after losing their prime of age shall be devoid of getting any employment elsewhere. This is the civil aspect of the matter but behind it acted the white collar crime. Engineers or the Executives had given such employment at the initial stage taking advantage of the unemployment of the persons and knowing fully well that those employees shall have to face termination on one day but still did so definitely with some underhand dealings. I have got knowledge from the private sources that the employer used to take half of the salary of those employees for at least 3-5 years on contract basis for giving such employment. Does it not make white collar crime with exploitation of unemployment and, that too, giving pressure on the exchequer making the public at large to suffer as the development works from the exchequer are being deprived of due to such payment of illegal salaries to the illegal employees. These are the pre-planed motivated white collar crimes being committed by the highly educated even technical experts, executives or the Engineers keeping in view that the law is insufficient and criminal sanction is almost impossible in doing such crimes for illegal gains. There are instances where the school teahers are shown to be appointed by issuance of only transfer order/letters by the highly placed authorities in the education department. These crimes are committed with the connivance of the highly placed authorities and also the persons who are at the receiving end and exploitation is there taking the advantage of the unemployment in the society.  Impact of White Collar Crime There is little systematic data available regarding the incidence of white collar crime. Many white collar crimes are of recent origin but still it is very difficult to obtain statistics about the various types of white collar crimes because it is extremely difficult to discover existence of such crimes which may be clear from the above illustrations. The informations which are available though not systematically compiled indicate that white collar crime is purvasive in our society and causes enormous economic and social harm. Paper publications and reports from various enquiry commissions have revealed the prevalance of wide-spread unethical and illegal behaviour in various industries, business organisations and also in the Govt. jobs. Level of white collar crime in the big industrial organisation, automobile garage, small scale radio repairing shop, watch repairing shop are rising day by day. White collar crime affects the whole moral climate of our society. Derelictious activities by corporations and their managers or high officials in Govt. who usually occupy leadership position in their arena or field establish an example which tends to erode the moral base of the law and ethics and provides an opportunity for other kinds of offenders to rationalise their mis-conduct. The frustration, discontent and displeasure with the system amongst the people, and youths, in special, tends towards erosion of moral values and becomes an important factor underlying some forms of violent crime. The most striking feature of such sort of crime is the sense of unfairness of disregard of the individual by the original business community, of lack of effective recourse, and feeling that market place or the field of service and employment or other field of essential needs in the life generally unethical. Such frustration and discontent with abusing mentally displeasure is not only the important factor but the main root of violent crime as is found in the recent survey of criminal ethology by the socialists.  The White Collar Crime and the Criminal Process Most of the perpetrators of ordinary crimes are likely to be young who have serious educational and vocational handicaps which rehabilitation programmes can attempt to overcome but such programmes are far less significant and will often be irrelevant for the white collar offenders. With respect to many kinds of white collar offenders, recidivism may not be a serious problem and, therefore, long period of incarceration or supervision may not be needed to protect the society from further criminality. Condemnatory and deterrent aspects of criminal sanctions may be effective in the process of restricting white collar crimes. The persons who have standing and roots in a community and are prepared for and engaged in the legitimate occupations can be expected to be susceptible to the threat of criminal prosecution/criminal proceeding and the imposition of sentence may have much sharper impact upon those who have not been hardened by the previous conduct with the criminal justice system. White collar crimes as a class are more likely than the traditional crimes to be preceded by some deliberation and, therefore more often an opportunity to calculate it objectively. In my view, jail sentences may be constituted for such criminals which may be significant and deterrent for white collar crime. Imposition of jail sentences may be the way to symbolise the society’s condemnation of the behaviour, particularly when it is not brutal or repulsive and the jail sentences may be the only sanction available which would serve as an adequate deterrent. Imprisonment may often be an appropriate penalty for violation of laws and procedure and only imposition of fine in such sort of crimes may be inadequate for a number of reasons. The present statutory provisions of fine and compensation often may be trivial in proportion to their ability to pay and to the profits resulting from the criminal violation of laws. The corporate expenses may be lawfully reimbursed by imposition of fine but magnitude of white collar crimes cannot be equated or dealt with by imposition of fine. The penalties of fine cannot be construed as adequate deterrent for the purpose of white collar crimes. Criminal law now in existence by its different legislation is not appropriate measure or means of dealing with every type of white collar misconduct. Since white collar misconduct usually does not involve the act such as robbery, burglary or rape of dramatic and predatory nature, it is inevitable that one of the critical and difficult issues is the point to determine when the violation is clear cut enough to warrant to society’s ultimate method of control. If we give a deep brood over the methodology of various white collar crimes, we are at loss to find the ways of remedial measures of the legislations. Criminal sanctions may be sought only when there has been intentional violation of established rule of law. Where the misconduct does not constitute such a violation, civil remedies may be adequate in place of criminal sanctions but civil remedies because of their arduous and lengthy proceeding may not be equated with adequacy for remedial purposes of such sort of crimes when there is speedy uprising of crimes in that area. Established laws are insufficient, no doubt about it that the law is ambiguous in this arena. My feeling is that until and unless the moral degradation in the society is being stopped/controlled or minimised, white collar crime would go on increasing and because of the intelligence and affluence of offenders of such crime, many more modes would come in to keep the functions alive and increase in various fields. The so called respectable persons doing the offences in the society would definitely be scared of degradation of their respectability and such fear can put (sic) to some extent assured by the criminal sanctions of being sent to jail. The Govt. must, therefore, minimise the offences of this nature depending more to a great extent on the deterrent affect of the threat of criminal sanctions. Careful thought must be given to determine these areas in which use of criminal sanction is appropriate and in which other means of enforcement will suffice. Moreover, prosecut-ional directions should be exercised in deciding such cases where those who are technically and in apathy involved in the criminal violation should be selected for the prosecution.  Practical Problems With regard to the use of criminal sanctions, there is practical obstacle in the enforcement of laws relating to white collar crimes because of factors peculiar to this kind of criminality. It is often extremely difficult even to discover the existence of white collar crimes; it is similarly difficult to secure the evidence of criminal guilt. Such sort of crimes do not stand out as normal and usual criminal conduct. It may involve acts of omission rather than commission which are less likely to be observed or noticed. It is often committed under the privacy of business or of the Govt. and non-Governmental organisations/corporations and hence not visible to nascent public eye. There may not be a single victim or group of victims to complain to the law enforcement authorities or victims may be unware at the time of offences that they have been victimised and even the victims are also because of their position in the society having some connivance with the crime, and as such, not ready to make a complaint. The crime itself may be difficult to identify as stated it is committed mostly in the course of ordinary business activities and may not be significantly distinguishable from non-criminal business conduct. There are also serious practical problems in imposing sanctions upon the corporate employees. It is very difficult to obtain the conviction of the true policy formulators in large complex, corporations. The top executives do not ordinarily carry out the overt criminal act. It is the lower or the middle functionaries in the official heirarchy who are generally involved in such crimes. Under the traditional doctrines of compliance to hold superior responsible, he must be shown actually to have participated in his subordinate’s criminal activities as by ordering the compliance of a conduct or encouraging or aiding in its performance. It is very difficult to obtain evidence of such participation. Difficulties of proof prevent the prosecution of top management in many cases.  Thus, the burning problem remains as to how to tackle with such fast growing white collar crimes in various fields although at every walk of life on every day at every hour we feel frustrated of not getting such offenders to book. Such frustration, as humane in the present day artificial mock society, are leading to attract more people to white collar crimes. What a tragedy!

Author Name: Hon’ble Justice Prasun Kumar Deb