COMPUTER RELATED WHITE COLLAR CRIMES & LAW

When computer, internet and various other technological developments came in India during the
1990’s it brought along with it the hope and promise of growth & advancement for the country
and its people. But like every coin having two sides this developments also brought along with it
a new variety of computer related crimes also known as “White Collar Crimes” and with time the
prevention and enforcement of these white collar crimes has become quite a challenge for India
as well as all over the world. And the Current Governments “Digital India program” has again
brought to light the question whether India has enough legal measures to face its negative impact
like cyber crimes and most specifically White Collar Crimes.

White Collar Crimes

There is no statutory definition for the term “white collar crime”. The term was defined by
Edwin Sutherland in 1930 as “a crime committed by a person of respectability and high social
status in the course of his occupation”. In India the Santhanam report brought in light the
offences and mal-practices known as “white-collar” crime, which was also acknowledged by the
29th Law commission report in 1972. White collar criminal belongs to upper socio economic
class who violates the criminal law while conducting their professional qualities.

Types of White Collar Crime in India

· Cellular Phone Fraud: The unauthorized use, tampering, or manipulation of a cellular phone
or service. This can be accomplished by either use of a stolen phone, or where an actor signs up
for service under false identification or where the actor clones a valid electronic serial number
(ESN) by using an ESN reader and reprograms another cellular phone with a valid ESN number.
· Currency Schemes: The practice of speculating on the future value of currencies.
· Educational Institutions: The governing bodies of those institutions manage to secure large
sums by way of government grants of financial aid by submitting fake details about their
institutions. The teachers and other staff working in these institutions receive a meager salary far
less than what they actually sign for, thus allowing a big margin for the management to grab
huge amount in this illegal manner.
· Computer fraud: Where computer hackers steal information sources contained on computers
such as: bank information, credit cards, and proprietary information.
· Embezz1ement: When a person who has been entrusted with money or property appropriates it
for his or her own use and benefit.
· Insider Trading: When a person uses inside, confidential, or advance information to trade in
shares of publicly held corporations.
· Insurance Fraud: To engage in an act or pattern of activity wherein one obtains proceeds from
an insurance company through deception.
· Investment Schemes: Where an unsuspecting victim is contacted by the actor who promises to
provide a large return on a small investment.
· Securities Fraud: The act of artificially inflating the price of stocks by brokers so that buyers
can purchase a stock on the rise.
· Tax Evasion: When a person commits fraud in filing or paying taxes.
The complexity of tax laws in India has provided sufficient scope for the tax-payers to evade
taxes. The evasion is more common with influential categories of persons such as traders,
businessmen, lawyers, doctors, engineers, contractors etc. The main difficulty posed before the
Income Tax Department is to know the real and exact income of these Professionals.

Factors Influencing White Collar Crimes

 Drive of Profit. – White-collar crimes are committed mainly for economic gain
 Desire to beat competition – White collar crime is also desire to beat competition and in
order to beat competition in the economic field frauds and bribery is committed.
 Limited scope of legislation – Modern legislations dealing with such crimes are limited in
their scope.

Laws governing White Collar Crimes

In general, Indian Penal Code & Criminal Procedure Code has some sections like Sections 463,
477A, 403, 405,415 laid in IPC to punish some of the White Collar Crimes but still there are no
specific rules and punishments for many other crimes and it has many loopholes in the procedure
& system.
Information Technology Act was enacted on 9th June 2000.Though the focus of this Act is not on
cyber crimes it has certain provisions which deal with white collar crimes. Although it has
certain provisions regarding cyber crimes, it also has some unresolved issues which prevent the
laws to enact. Some of the problems are inapplicability, the definition of hacking, the absence of
guidelines for investigation of cyber crimes, etc.

Other than this SEBI act1992; Companies act 1956; Income tax act 1961; Customs act 1962;
Prevention of Corruption act 1988; etc… are some acts which govern the White Collar Crimes

White Collar Crime Cases

Securities scam (Harshad Mehta fame) in 1992 was a major white collar crime which changed
the securities market.

The case of Satyam Computers involving Rs 7000 Cr is one of the largest corporate crimes in
recent times. Satyam had cooked its books of accounts for several years inflating its revenues
and profits.

Reasons for no effective prosecution of the white collar crimes

 Social status: One of the foremost reasons for the ineffective enforcement against white
collar crimes is the class of persons involved in the crime. These offenders have the
social, political and economic power to influence such charges against them.
 Complexity: The white collar criminals learn the techniques of defrauding and
embezzling funds and are aware of the methods to cover up their illegal actions, and
therefore, it is very difficult to obtain cogent evidences to prosecute them in court of law.
 Corruption: Rampant corruption in the society which makes it possible for the offenders
to bribe their way out.

References
http://www.lawteacher.net/free-law-essays/criminal-law/white-collar-crimes.php
http://lawcommissionofindia.nic.in/1-50/report29.pdf
https://www.linkedin.com/pulse/20140813191900-7338955-criminology-white-collar-crimes-in-
india
http://indianresearchjournals.com/pdf/IJSSIR/2012/September/16.pdf