The term- white-collar crime- comes from an outdated assumption that business executives wear white shirts and ties. when a person or group of persons violate the law in the course of a legitimate business enterprise or occupation is termed as a White-collar crime. Secondly, the execution of a White-collar crime involves the co-operation and participation of many people.
The costs of White-collar crimes are both financial costs as well as social costs. The term white-collar crime covers a wide array of crimes. But, they all involve crimes committed through deceit for the purpose of gaining money or other assets. The most common types of white-collar crime include fraud, insider trading, and bribery. White-collar crimes can often be difficult to prosecute. As the perpetrators take sophisticated steps to ensure their illegal activities are difficult to detect.
Harshad Mehta Securities Fraud (1988-1995)
Harshad Mehta was a stockbroker, and he established his security firm in 1990, “ Grow More Research & Asset Management Limited”. He was a registered and well-known broker. He manipulated the Bombay Stock Exchange (BSE) along with his partners by taking advantage of loopholes in the banking system.
Harshad Mehta took a loan of a huge amount from the bank and purchased the scrips at high prices, thereby creating a false market. And, he misused his status and manipulated the stock prices of certain scrips for his gain. This resulted in the unnatural pumping of money in the stock markets. Leading to an abnormal rise in the price of these shares. However, this act of Harshad Mehta being immoral was not illegal. But, the problem arose when Mehta obtained capital to invest in the stock market by misappropriating the bank’s money.
Mehta allegedly colluded with bank employees to get fake bank receipts (BRs) issued. He used these BRs to get other banks to lend him money under the impression that they were lending against government securities. Further, this amount was used to juice up share prices by up to a staggering 4,400 percent. Mehta sold these shares at a significant profit. Mehta then returned the principal amount to the banks. And, this misappropriation of money falls in the purview of money laundering. He earned approximately 5000 crores. This unabated selling caused the market to lose 0.1 million in a day. This was the biggest ever crash which the Indian stock market had ever experienced. The then renowned journalist Sucheta Dalal exposed this scam.
The usage of spectrum in the wireless devices. This scam involves the sale of the 2G spectrum licenses using a fixed price. And, A Raja did so as the option of auction led to less profit. He gave licenses to those applicants that were ineligible for it. These applicants not only lied but also gave false documents, submitted incomplete details, and hidden them as well. As a result, this led to a loss of 1.76 lakh crore rupees.
Further, the Comptroller and Auditor General of India gave the report of their crime on 16th November 2010. Also, it was such a heinous crime that the charge sheet was 80,000 pages long. In addition to it, the CAG report mentioned that these important stakes to Indian as well as foreign companies at a large amount of premium. Next, they did so in a very short period of time. Finally, they also claim that the real value of the spectrum and the value earned by these ineligible applicants were totally the same.
Commonwealth Games is an international event where the athletes from the commonwealth of nations play multiple sports. It takes place once a year. Commonwealth games federation conducts it. Suresh Kalmadi did the Commonwealth Games scam. He was the Chairman of the organizing committee of the Games. As a result, he gave the contract of 141 crore rupees to the Swiss Timings. And these timing equipment by Swiss Timings were costly by 95 crore rupees.
Furthermore, the chairman asked the sportspersons to live in rooms which were not in a very good condition. This is when the Central Vigilance commission found out about the CMW scam. In addition to the decreased facilities to the sportspersons, the pilferage of 70,000 rupees took place due to this scam. They were arrested for their crime under the charges of cheating, conspiracy, corruption, and forgery for purpose of cheating. This is totally a major white-collar crime in India.
Former Air Chief Marshal S P Tyagi and Christian Michel were major ones involved in the AgustaWestland VVIP chopper scam. They paid the middlemen as well as politicians to buy 12 AgustaWestland helicopters. Italian defense manufacturing giant Finmeccanica built these helicopters and the cost of it was 3600 crore rupees. And President of India, other important persons as well as the prime minister of India were going to use these special helicopters. And, surprisingly, Italy uncovered one of the top white-collar crimes in India.
Further, the Congress government canceled the deal in the year 2014. CBI arrested S P Tyagi in the year 2016 because he suggested the decrease in the operational ceiling from 6000 meters to 4500 meters. And, CBI also mentioned in the report that the IAF opposed these changes. But when the Tyagi became the chief, he highly recommended it. Finally, they also arrested Christian Michel is the middleman hired by Agusta Westland along with Guido Haschke and Carlos Gerosa.
National Herald Case
One of the white-collar crimes that fall under the corruption category and is an ongoing case. Subramanian Swamy is an Indian economist and politician who filed a case in the Delhi court against Sonia Gandhi and Rahul Gandhi. He did so because of the reason that the Associated Journals Limited (ALJ) borrowed the loan of 90.25 crores from the Indian National Congress. In addition to it, this loan was interest-free.
Furthermore, a company named Young Indian was started in 2010. And, it had a capital of 50 lakh rupees. Not only the capital of 50 lakh rupees is surprising but also the point that this company acquired the shares of ALJ. The worth of these shares was 5000 crore rupees. Finally, in the year 2019 Enforcement Directorate permanently attached the properties of Gandhis. These properties were worth 64 crore rupees. Thus, it is indeed one of the white-collar crimes in India involving a huge amount of money.
White-collar crimes break our illusion of the link between high education and truthfulness and righteousness. And, it makes us aware of the crimes done by the people even in suits and boots. Furthermore, high profile individuals with high knowledge of the law and how to get across the political and higher authorities have done such white-collar crimes. And, it also shows the negligence of the higher authorities which let such scams happen. Indian government should take strict actions against those who accept and give bribes. Law professionals should spread awareness amongst the laypeople about their right to information.