Introduction

White collar crimes are those crimes which are committed by high professionals, in
their occupation, exploit social, economic and technical power for personal and
corporate gain. White-collar crime is a very broad concept and includes many types
of non-violent offences like fraud and illegal financial transactions. White-collar
crimes are crimes that are done by the most elite people in their usual work. A few
examples of white-collar crimes of a better understanding are fraud, counterfeiting,
embezzlement, tax evasion etc.
History
The most influential criminologist of the 20th century and also a sociologist, Edwin
Hardin Sutherland, for the first time in 1939, defined white-collar crimes as
“crimes committed by people who enjoy the high social standard, great repute, and
respectability in their occupation”. He pointed out that white collar crimes are more
dangerous to society than ordinary crimes, firstly, because the financial losses were
higher, and, secondly because of the damage inflicted on public morale.
Key Elements of Sutherland's Definition:
1. Person of Respectability and High Social Status
Sutherland emphasized that white-collar crime is typically committed by
individuals in positions of power, authority, or trust within society, such as
professionals, business leaders, or government officials.
2. In the Course of Their Occupation
The criminal acts are tied to the offender's occupational role or professional
position, differentiating white-collar crimes from street crimes or crimes of
passion.
3. Non-Violent Nature
While Sutherland did not explicitly state this in his definition, white-collar
crimes typically involve deceit, manipulation, or abuse of trust rather than
physical violence.
4. Economic or Financial Motivations
White-collar crimes usually aim to gain financial benefits or advantages, often
at the expense of individuals, organizations, or society.
Examples of White-Collar Crimes (based on Sutherland's perspective):
 Embezzlement
 Fraud (e.g., securities fraud, insurance fraud)
 Insider trading
 Tax evasion
 Bribery and corruption
Criticism of Sutherland’s definition
1. Overemphasis on Status: Sutherland’s definition restricts white-collar crime
to individuals of “respectability and high social status.” Critics argue this focus
excludes lower-level employees or professionals who commit similar crimes (e.g.,
embezzlement by middle managers). This narrow scope creates ambiguity around
whether similar behaviors by individuals of lower status should be categorized
differently.
2. Neglect of Organizational Crime: Sutherland’s definition primarily focuses on
individual offenders, ignoring crimes committed by organizations (corporate crime).
Corporate fraud, environmental violations, and regulatory breaches may involve
collective or systemic decision-making rather than individual culpability.
3. Lack of Precision: The phrase “in the course of their occupation” is vague. It
does not provide clear boundaries on what qualifies as a white-collar crime versus
other forms of crime (e.g., street crimes or personal frauds committed by
professionals outside their occupation).
4. Legal and Jurisdictional Ambiguities: Sutherland’s sociological approach
avoids a strict legal definition, which can hinder its applicability in legal and
enforcement contexts. Legal systems prefer concrete categorizations to determine
culpability and penalties, but Sutherland’s definition is too broad and sociological for
this purpose.
5. Ethical and Moral Assumptions: By emphasizing “respectability,” Sutherland’s
definition implicitly connects social status with morality, potentially reinforcing
stereotypes or ignoring the reality that crimes are committed across all social
classes. This also risks romanticizing white-collar criminals as somehow “less
harmful” compared to others, despite their actions’ societal impact.
6. Exclusion of Technological and Modern Developments: Sutherland’s
definition does not account for technological advances, such as cybercrime, which
often involves professionals but may not fit neatly into occupational contexts. As the
nature of work evolves, the definition may feel outdated.
Types of White-Collar Crimes (US)
 Fraud in relation to the sale of bonds and investments.
 Adulteration of foods and drugs and misleading advertisements.
 Malpractices in the medical profession, such as legal sale of alcohol and
narcotics, abortion, illegal services to underworld criminals, fraudulent
reports and testimony in accident cases, extreme cases of unnecessary
treatments, fake specialists, restrictions of competition and fee splitting
 Crimes by lawyers such as guiding criminals or quasi criminal activities of
corporations, twisting of testimony to give a false picture, fake claims
 Bribery and graft by public officers.

Reasons for the growth of white-collar crimes: Greed,

competition and lack of proper laws to prevent such crimes are the major
reasons for the growth of white-collar crimes.
  Greed: The father of modern philosophy, Machiavelli, strongly
believed that man by nature is greedy. It is said that a person will
sooner or later forget about the death of his father than the loss of his
inheritance. The same is true concerning the commission of white-
collar crimes.
 Competition: Herbert Spencer after reading “On the Origin of
Species” by Darwin, coined the phrase that evolution means “Survival
of the fittest”. It implies that there will be competition between species
and the only person who adapts himself wins and survives.
 Lack of awareness: The nature of white-collar crimes is different
from the conventional nature of crimes. Most people are not aware of it
and fail to understand that they are the worst victims of crime.
 Necessity: People also commit white-collar crimes to meet their own
needs and the needs of their families. But the most important thing is
that people of high social status want to feed their egos.
 Access to power
People in positions of power may have more opportunities to commit
white-collar crime
 Access to information
People with access to confidential information may be able to use that
information to their advantage
 Access to technology
White-collar crimes can be committed online or with the help of
technology

Some of the many reasons augmenting the growth of white-collar crimes

in India are explained below:
1. Lack of Strict Laws: Though India already has laws against financial
fraudulence, these need to be made more stringent to penalize offenders.
Perpetrators tend to exploit loopholes in the existing laws and getaway
successfully. Furthermore, with the government promoting Digital India,
internet has become the most popular form of monetary transactions
presently, giving a boom to cybercrimes which are a form of white-collar
crimes. India still does not have ironclad cyber security laws.

2. Greed: It is believed that there is greed inbuilt in the nature of man. It states
true in the cases of white-collar crimes as these are mostly committed by
people already part of high society circles with so much wealth that already
cannot be accounted for. The greed in them makes them commit crimes and
steal money from the pockets of honest tax payers.
 3. Lack of Awareness among General Population: People who fall prey to
white-collar crimes often fail to make sense of the nature of the crime that
has been committed and are unaware of the procedures to be followed in
order to register a complaint against such offence. Sometimes the offenders
sit at very powerful positions at out of reach institutions forcing victims to
choose silence over standing against them. Then there�s existence of
double-dip scams in which a victim�s information might be stored and
passed on to other scammers.

4. Modern Technology: Advancing technology has helped us ease our day-to-

day chores and also the ease to commit crimes. White-caller crimes has
reached a wider audience with the help of internet and technology. Criminals
are able to explore new ways of committing illegal activities. Bank frauds are
done with a single click on some link. This posing a great threat to people's
privacy and financial assets.

5. Biased Law: As white-collar criminals are mostly those who hold certain
authority in institutions, they tend to escape their punishment through strong
contacts with government officials and politicians that influence the country's
legal system. Corruption is also one evil that cripples the system and
judgements are made in favour of the powerful even if they are the offenders.
Bribes are used at all levels of investigation and the offenders go free. The
victims tend not to report offences for that matter as they lose faith in law
and order.

Types of White-Collar Crimes:

White-collar crimes have many forms, they come in different categories,
with different characteristics and impacts.

Some of these are listed below:

1. Fraud: By definition a fraud is an intentional deceptive action taken by the
perpetrator for their own unjust gain. One of the most common type of frauds
in India are bank frauds which include getting loans approved falsely, stealing
cheques and by imitation of financial institutions over calls or internet.
Activities like pyramid or Ponzi schemes, identity theft also fall in the
category of frauds.
2. Embezzlement: The act of embezzlement is practiced under the shield of
trust. When a person starts using the money or property that has been
entrusted upon him in a manner that is illegal and not designated to, it
becomes a criminal breach of trust according to section 405 of IPC.
3. Money Laundering: When a person is successful in disguising illegally
obtained financial assets as funds obtained from legal sources, a money
 laundering crime has been committed. Section 3 of the Money Laundering Act
of 2002 defines it.

4. Insider Trading: Taking advantage of privileged access to inside information

of a company that is unavailable in the public domain by buying or selling
stocks or manipulating other financial instruments to make profit is called
Insider trading and it is illegal.
5. Tax Evasion: Evasion of tax is a punishable offence under the income Tax
Act of 1961. It could be practiced by an individual or a whole institution. It is
the act of escaping or avoiding paying taxes by illegally forging state of
affairs so that the amount of tax to be paid can be lessened. Tax evasion is
basically robbing a nation of the money that is used by the government to
help pay for the country's expenses and growth. It is penalised in situations of
failure in filing of income tax returns, providing false information, concealing
of owned assets.
6. Counterfeiting Currency: Section 28 of IPC defines counterfeiting as a
criminal act. It is the practice of imitating something that is authentic like
coins and currency or even items like clothes, bags, shoes among others.
7. Cybercrimes: With India moving towards digitisation in every sector,
cybercrimes have become very common. Any crime that uses computer as a
means, coupled with internet comes under the category of cybercrimes.
These include child pornography, cyber stalking and harassment, and cyber
terrorism.
8. Blackmail: Section 503 of the Indian Penal Code, 1860, defines blackmail as
making a demand for money and any other consideration by imposing a
threat to cause physical injury or damage to one’s property. For example,
revealing a secret of the person that the offender knows if revealed will cause
great embarrassment to the victim.
9. Bribery: Bribery is a white-collar crime where a person asks for money, a
favour, or something of value to get the other person’s work done. For
example, if an electoral officer asks a person to offer him wine and only then
will he be allowed to give a vote, it would amount to bribery.The punishment
for bribery has been provided under Section 171E of the Indian Penal Code,
1860 which says that any person who commits such an offence would be
imprisoned for a term which may extend to 1 year or with a fine or both. Also,
Section 13 of the Prevention of Corruption Act, 1988 has penalized acts
constituting an offence under this head, being engaged in by public officials.

White-collar crime in other professions

In Medical Profession: The problem of the relationship between the doctor and
the patient has been recognized long back by penologists. Manu said that the ones
indulging in false practices, for example, where a doctor makes a false diagnosis
report, a heavy fine would be levied on him. Removing of immature fetus was
considered to be a heinous crime and such a person was called to be subject to
severe punishment. There have been many cases where medical practitioners have
had no license to practice medical profession. The doctor treating the patient had
turned out to be a fake doctor who had only deceived the patients by not treating
them properly and running away with their money.
Examples of white-collar crime in medical profession could be issuing fake medical
certificates, facilitating illegal abortions, and selling sample drugs and medicines
directly to patients or chemists in India. Sometimes, professionals in the medical
field are seen giving advice to criminals on how to escape the allegations using
medical grounds.
In Karnataka, two doctors, K.H. Jnanendrappa and K.M. Channakeshava, were
charged with making fake medical certifications for Abdul Karim Telgi, who was
involved in a multicrore stamp paper racket in order to help him get bail on the
grounds of health issues. Therefore, under the Prevention of Corruption Act, 1988
they both were held liable with 7 years imprisonment and with a fine of 14 lakh
rupees each.

In Legal Profession: Use of fake evidence, and fake witnesses in the court and
thus extracting a huge sum of money from their clients, the lawyers too commit
white collar crime. Legal practitioners with the help of ministerial support involved
in wrongful practices and violate all the ethical standards for some amount of
money.
So in the case of D.K. Gandhi v. M. Mathias when referring to what the Supreme
Court had said in Jacob Mathew v. State of Punjab, held the appeal and left the
matter to be decided by the State Commission based upon the law.
In the case of Jacob Mathews, the Supreme Court had said that: in law of
negligence, the professionals from different professions like, legal, medical, or
architecture, or any other would be held liable for negligence in practicing their
profession if that either of the two given conditions are satisfied: a. He did not have
the required skill that was needed to be professed and, b. Even if he has the
required skills to be professed, he did not exercise the same.

In Engineering Profession: Engineers are often found to be involved in providing

substandard works and materials.
In April 2019, India Today reported that an assistant engineer by the name of S.F.
Kakulte was arrested for negligence because of which a bridge had collapsed.
Along with Kakulte four other engineers and the chief engineers of Bombay
Municipal Corporation were involved in the project. The Structural Auditor, Neeraj
Desai, was also arrested for negligence in the report. He claimed that beams,
pillars, and metal fixtures were audited but the concrete slabs were not mentioned
in the inventory given to him for the audit as a result 6 people died and 35 were
seriously injured.
In education: Many private educational institutions involve themselves in fake
practices like using fictitious documents and fake details to obtain grants from the
government to run their institution.
It was in 2019 when the New India Express reported that a senior railway ticket-
checking staff was arrested by the Central Crime Branch for leaking out the
question papers of the exams for the post of constables in return for money.

Legislation against white collar crime in India

Several provisions exist for identifying white-collar crimes in India. Government to
ensure that the criminal committing white collar crime must be punished, brought
out the various legislations-
1. The Companies Act, 1960
2. The Income Tax Act, 1961
3. Indian Penal Code, 1860
4. The Commodities Act, 1955
5. The Prevention of Corruption Act, 1988
6. The Negotiable Instrument Act, 1881
7. The Prevention of Money Laundering Act, 2002
8. The Information Technology Act, 2005
9. The Imports and Exports (Control) Act, 1950
10. The Special Court (Trial of Offences Relation to Transactions in Securities) Act,
1992
11. The Central Vigilance Commission Act, 2003

Penalties for White-Collar Crimes

Punishment for fraud:

Section 447 of the Companies Act, 2013 provides the punishment for the
commission of fraud. It states that if a person is found guilty of an offence
of fraud, he would be imprisoned for a period of less than 6 months and
which may extend to 10 years.
Punishment for false statement: Section 448 of the Companies Act, 2013
states that: if a person deliberately makes a false statement, knowing it to be false
then he would be held liable for his wrongful act.
Punishment for furnishing false evidence: Section 449 of the Companies
Act, 2013 provides for punishment for furnishing false evidence. It states that if
any person gives false evidence in a court of law:
· Either upon an examination on oath or solemn affirmation; or
· When any company is about to dissolve or otherwise also in case of any matter
arising under this Act, in any affidavit, deposition or solemn affirmation,
· He shall be punished with imprisonment and fine both. The imprisonment will not
be less than 3 years and may extend to 7 years and the fine may extend to 10 lakh
rupees.
Recent white-collar crime cases in India
SEBI v. Burman Plantation and Others
Before the High Court of Allahabad, the learned counsel on behalf of SEBI claimed
that the company was being wrongly accused as the company was not in a position
to pay its debts, including payments to its investors. When the advertisement by
the company was put into question, the council said that the advertisement was
given in 2003 while the order was passed in 2004, when the company was not in a
position to pay back its debts.
Moreover, the sum of money that the investors were claiming was nowhere cited.
The main claim of the counsel made the legislatures raise the punishment from 1
year to 10 years and also increased the fine which may now extend to 25 crores by
amending the laws under section 24(1) of the SEBI Act. At last, Ravi Arora, the
accused, was held liable.
Abhay Singh Chautala v. C.B.I.
There were two appellants in the present case against whom a charge sheet was
filed for committing an offence under Section 13(1) (e) and 13(2) of the Prevention
of Corruption Act, 1988 read with Section 109 of the Indian Penal Code, 1860 in
separate trials. It was alleged that both the accused had accumulated
disproportionate wealth as per their income when they were members of the
Legislative Assembly.
When the Central Bureau of Investigation (CBI) initiated its investigation it was
found that the father of the appellant had acquired huge properties and same is the
case with the appellants. The High Court held that the appellant had provided a
different office(s) of the accused than they were holding at that time. Thus the
sanction under Section 19 of the Prevention of Corruption Act, 1988 was held to be
without any merit.
Binod Kumar v. State of Jharkhand & Others
This case was filed against several ministers of the State of Jharkhand along with
the Chief Minister for having the possession of unaccountable money. The High
Court had requested the Central Government to transfer the case from the
Enforcement Directorate to the CBI by way of power given to it under Section 45
(1A).
It was alleged that the ministers were in possession of hefty amounts of money and
though no evidence was found to charge them with a money laundering case, a
strict investigation was proposed.
The ministers were said to be the owners of property not only in India but abroad as
well. Therefore, the court asked for an investigation to determine whether this
wealth was acquired by making use of the official position. It was to be clarified if a
white crime had been committed under the Prevention of Corruption Act, 1988 and
under the Indian Penal Code, 1860.
The CBI started its investigation under the Prevention of Corruption Act, 1988 and
the Indian Penal Code, 1860 as the power to carry on investigation under the
Prevention of Money Laundering Act was only with the Enforcement Directorate,
which is of course subject to the power given to the Central Government under
Section 45 (1-A) of the Prevention of Money-laundering act.
Difference between white-collar crime and blue-collar crime
The term ‘blue-collar crime’ came into the picture in 1920. The term was
used to refer to Americans who prefer manual labour. These people work on
low incomes or on an hourly basis.
The difference between ‘blue collar crimes’, which are crimes of a general
nature, and ‘white collar crimes’ was laid down by the Supreme Court of
India in the case of State of Gujarat v. Mohanlal Jitamalji Porwal and
Anr. Justice Thakker elucidated that one person can murder another person
in the heat of the moment, but causing financial loss or say committing
economic offences requires planning. It involves calculations and strategy-
making to derive personal profits.