White Collar Crimes US India

WHITE COLLAR
CRIMES IN US
AND INDIA:
A Comparative Study of
Laws And Regulations
DEFINITION
• The term “White Collar Crime” was defined by sociologist Edwin Sutherland in 1939.
These crimes are non-violent crimes committed by business people through deceptive
activities who are able to access large amounts of money for the purpose of financial
gain.
• White Collar Crimes are the crimes committed by a person of high social status and
respectability during the course of his occupation. It is a crime that is committed by
salaried professional workers or persons in business and that usually involves a form
of financial theft or fraud.
CLASSIFICATION OF WHITE-COLLAR CRIMES
• Embezzlement - taking someone's property by thereby violating free market operations.
a person with whom it is entrusted. • Racketeering - dishonest and fraudulent
• Bribery - When someone gives or takes a business dealings.
bribe. • Computer Fraud - using a computer to commit
• Larceny - involves taking someone's property a crime.
without paying for or returning it. • Obstruction of Justice - tampering or
• Extortion - obtaining something, especially destroying evidence(s) during the course of a
money, through force or threats. government case.
• Fraud - intentional deception to secure unfair • Perjury - lying while under oath in a judicial
or unlawful gain proceeding.
• Price Fixing - an agreement between two • Environmental Law Violations
parties to set prices for a certain product,
REGULATORY LEGISLATIONS AND
ENFORCEMENT AGENCIES IN UNITED STATES
• Securities and Exchange Commission • Financial Accounting Standards Board

• Racketeer Influenced And Corrupt (FASB)
Organization (RICO) Act • Federal Bureau Of Investigation
• Sarbanes-Oxley Act • Internal Revenue Service (IRS)
• Computer Fraud and Abuse Act • U.S. Postal Inspection Service
• Commodity Futures Trading Commission
• Treasury Department’s Financial Crimes
Enforcement Network
In addition, most states employ their own agencies to enforce white-collar crime laws at the state level.
REGULATORY LEGISLATIONS IN INDIA
• Companies Act, 1960 • Imports and Exports (Control) Act, 1950

• Income Tax Act, 1961 • Fugitive Economic Offenders Act, 2018
• Indian Penal Code, 1860
• Commodities Act, 1955
• Prevention of Corruption Act, 1988
• Negotiable Instrument Act
• Prevention of Money Laundering Act, 2002
• Information Technology Act
ENFORCEMENT AGENCIES IN INDIA
• Enforcement Directorate
• Central Bureau of Investigation
• The Serious Fraud Investigation Office (SFIO)
• Securities and Exchange Board of India (SEBI)
PENALTIES FOR WHITE-COLLAR CRIMES
INDIA UNITED STATES
• Embezzlement - upto 3 years and fine or both • Embezzlement - 10 years and fines equal to
• Bribery - upto 10 years and fine the value of the embezzled property
• Larceny - upto 3 years or fine • Bribery - upto 15 years or fine or both
• Extortion - upto 3 years or fine or both • Larceny - upto 1 year
• Fraud - upto 3 years and fine • Extortion - upto 20 years or fine or both
• Price Fixing - up to five years in prison and/or • Fraud - upto 10 years

significant private fines. • Price Fixing - up to 10 and fines.
• Racketeering - 7 to 10 years and fine • Racketeering - upto 20 years and fine
• Computer Fraud - 3 years and fine • Computer Fraud - upto 20 years and fine
• Obstruction of Justice - 6 months or fine or • Obstruction of Justice - 18 months or fine or
both. both.
MAJOR WHITE COLLAR CRIMES IN
UNITED STATES
• Bernie Madoff - Madoff pleaded guilty to securities fraud, investment adviser fraud, mail
fraud, wire fraud, three counts of money laundering, false statements, perjury, false filings
with the SEC, and theft from an employee benefit plan. He was sentenced to 150 years in
federal prison. Victims of this scheme are still attempting to recover major losses.
• Enron Corporation - Result of this was 4,000 employees were fired, 20,000 workers
loses their jobs and $73 billion was lost in the stock value.
• Charles Ponzi’s scheme - He promised clients a 50% profit within 45 days or 100% profit
within 90 days, by buying discounted postal reply coupons in other countries and
redeeming them at face value in the U.S. as a form of arbitrage. In reality, Ponzi was
paying earlier investors using the investments of later investors.
MAJOR WHITE COLLAR CRIMES IN INDIA
• Harshad Mehta Scam Case- It is one of the biggest white collar crime and there was a great buzz
about it for a longer period. Harshad Mehta was a renowned face in the stock market. He obtained
fake bank receipts from small bank and passed it onto other banks as security to obtain cash. This
money was used by him to shoot up the prices of stocks in the stock market. He misappropriated Rs.
5000 crores out of it. It severely impacted the stock market. Even, the chairman of one of the bank
committed suicide.
• 2G Spectrum Scam Case- It was a political scandal and the most talked about scam of that time. It
tarnished image of many eminent ministers. This scam was about the allocation of unified access
service license. It was alleged that former telecom minister A Raja has evaded norms at every level
and carried out the this well-planned scam.
• PNB fraud- The Punjab National Bank Fraud Case relates to fraudulent letter of undertaking worth
₹11,356.84 crore (US$ 1.4 billion) issued by the Punjab National Bank at its Brady House branch in
Fort, Mumbai; making Punjab National Bank liable for the amount. The fraud was allegedly organized
by jeweller and designer Nirav Modi.
CASE LAWS IN UNITED STATES
• Department of Homeland Security v. MacLean, 135 S. Ct. 913 (2014)
(Whisteblower protection) - The case highlights the continuing tension between
government attempts to restrict information and the public’s right to know vital
information, which the press sometimes gets from whistleblowers.
• Roberts v. United States, 134 S. Ct. 1854 (2014) (Proximate Cause) - Jaycees
chapters lacked “the distinctive characteristics that might afford constitutional
protection to the decision of its members to exclude women.
• Loughrin v. United States, 134 S. Ct. 2384 (2014) (Bank Fraud) - The
Supreme Court held that the Government did not have to prove that a defendant
who was charged with violating § 1344(2) intended to defraud a bank to obtain a
conviction.
CASE LAWS IN INDIA
• State of Gujarat v. Mohanlal Jitamalji Porwal & Anr. AIR 1987 SC 1321) -
Supreme Court has differentiated between the general crimes and white collar
crimes. Justice Thakkar had stated that murder can be committed in the heat of
moment but these economic offences are committed with a cool calculation
and planned strategy to gain personal profits.
• Zee Telefilms Ltd. v. Sahara India - Despite so many disasters, the law was
reluctant to impose criminal liability upon corporations for a long time. This was
for basically two reasons that are corporations cannot have the mens rea or
the guilty mind to commit an offence; and that corporations cannot be
imprisoned, the only other remedy being left is that of fine which merges
criminal liability with that of a civil one.
CONCLUSION
As we can easily see the distinct procedures to deal with white collar
crimes in US and India. It is apparent that in US, there are multiple
enforcement agencies to tackle such the white-collar crimes.
Whereas in India, several amendments and legislations have been
made to bolster and strengthen the legal framework over the period of
time, but the penalties regarding White collar crimes should be stricter
as harsh punishment can prevent these crimes to a greater extent.

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WHITE COLLAR

• Securities and Exchange Commission • Financial Accounting Standards Board

• Companies Act, 1960 • Imports and Exports (Control) Act, 1950

• Larceny - upto 3 years or fine • Bribery - upto 15 years or fine or both

• Extortion - upto 3 years or fine or both • Larceny - upto 1 year

• Price Fixing - up to five years in prison and/or • Fraud - upto 10 years

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