ECONOMIC AND FINANCIAL CRIMES [Autosaved].pptx

criminology

1. ECONOMIC AND FINANCIAL CRIMES UNIT II

2. WHITE COLLAR CRIME White Collar crimes refer to nonviolent, financially motivated offences typically committed by individuals in professional or business settings. They are often committed by individuals in positions of trust ,such as executives, professionals or government officials. The primary motivation behind white collar crimes is usually financial gain, whether its personal enrichment or benefiting a company or organization. It was first defined by the sociologist Edwin Sutherland in 1939 as “a crime committed by a person of respectability and high social status in the course of their occupation.”

3. NATURE OF WHITE COLLAR CRIME White collar crimes are non-physical, covert and immediate in impact. These are more complex in nature and require more planning and organizing. It victimize organizations and affect the economy as a whole rather than individuals. Committed by persons of the upper socio-economic classes. It is caused by greed, economic difficulty, opportunity to commit crime and situational pressure. Lack of accountability, peer support, loopholes in legal structures ,lack of reporting and staying in competition are some other factors. They remained subject to criminal laws and criminal justice but are not considered similar as other street offences.

4. CAUSES FOR THE GROWTH OF WHITE COLLAR CRIME IN INDIA Greed Easy, swift and prolong effect Competition Lack of stringent laws Technological Invasions Lack of Awareness Necessity

5. FORMS/TYPES OF WHITE C0LLAR CRIMES FRAUD BRIBERY IMPORT/EXPORT VIOLATIONS INSIDER TRADING LABOUR RACKETEERING EMBEZLEMENT REAL ESTATE FRAUD PONZI SCHEME

6. 1. FRAUD Fraud involves an intentional deception or misrepresentation to gain an unfair advantage or cause harm to others. The primary motive behind fraud is typically financial, but it can also involve obtaining personal benefits, such as gaining access to someone’s personal information. It can be defined as a “knowing misrepresentation of the truth or concealment of a material fact to induce another to act to his or her detriment”. Frauds involves the false representation of facts, whether by intentionally withholding important information or providing false statements to another party for the specific purpose of gaining something that may not have been provided without deception.

7. 2. BRIBERY Bribery is the act of offering or receiving something of value in exchange for a particular action or decision. The bribe can be in the form of money, gifts ,favours or other benefits. Bribery often involves a direct exchange between two parties and can be a one time occurrence. It involves intentionally offering ,promising or giving any undue pecuniary or other advantage to an official or decision maker ,with the intention that the official or decision maker acts or refrain from acting in relation to the performance of their duties. Generally, in any related bribery transaction there are three main parties: the briber; the bribed person and their respective organizations.

8. TYPES OF BRIBERY Kickbacks:- It is a form of bribe paid to a person of influence within an organisation, in return for them securing some kind of benefit from their organization.( eg ;-securing profitable contract or contracts on favourable terms). Secret Commissions:- They are a form of bribery whereby an agent requests or accepts a payment to influence any internal act for the benefit of the payer, without the knowledge or consent of the higher authority. Facilitation Payments:- These are made to government officials in order to encourage or ensure that the official performs his or her normal duties or to influence their behaviours. Influence Peddling:- It occurs when an official seeks to obtain payment in return for using their influence to secure an undue advantage for the payer. Electoral Bribery:- Act of making a donation for the purpose of promoting a candidate or a political party ,where the intention is to influence the result of an election and so secure and retain a contract with the government.

9. 3. IMPORT/EXPORT VIOLATIONS Import or export violations refer to the illegal or improper activities related to the movement of goods across international borders. Some common examples of import and export crime includes the false classification of goods, illegal goods, importing or exporting goods without paying the fines or dues, tranship good to avoid fines and smuggling goods. Import Violations:- These occur when good are brought into a country without following certain obligations. Export Violations:-It happens when goods are sent out of a country in violation of export control regulations. Import and export violations can also involve circumventing trade restrictions imposed by governments, such as embargoes or sanctions on certain countries or entities.

10. 4. INSIDER TRADING Insider trading refers to the illegal practice of trading stocks or securities based on nonpublic , confidential information, resulting in unfair advantages and market manipulation. It is a breach of fiduciary duty or other relationship of trust and confidence. It can be defined as the practice of buying and selling of securities of a company by its key employees and executives and uses information which is not yet made public to gain advantage over other common investors. To prevent such act and to promote fair trading in the market for the interest of the common investors, the stock market regulator SEBI(The Securities and Exchange Board of India) has been formed. The SEBI defines an ‘Insider’ as someone who has access to price sensitive information about a particular company’s shares or securities.

11. 5. LABOUR RACKETEERING Labour racketeering is an act done by an association or a group of people for personal benefit through illegal, violent and fraudulent means. It describes the unlawful actions of people or groups who aims to exert power or influence over labour unions and their members in order to profit financially. It includes torturing workers, exploitation of labour, using coercive force against labour, lack of safety amenities ,extortion of labour ,unlawful strikes and work stoppages etc. The Primary intention to commit this act is the greed for money.

12. 6.EMBEZZLEMENT It is unlawful taking of funds or property of an employer, company or government or misappropriating money or assets held in trust. It often involves a trusted individual taking advantage of their position to steal funds or assets, most commonly over a period of time. When a person who has been entrusted with money or property to use for his own use and benefits starts using it any manner other than what it has been given for an illegal manner then the person would be liable for embezzlement. The act of embezzlement maybe characterized as Criminal Breach of Trust which has been defined in section 405 of IPC,1860.

13. The essential elements that constitute the crime of embezzlement are as follows. The two parties must share a fiduciary relationship, that is, a relationship based on trust. It is important that the defendant receives a certain amount of money or asset by making wrongful use of this relationship. The defendant while embezzling the asset or money should act like he is the owner of that goods or he owns the money  which he is giving to another person There should be an intention to deceive on the part of the offender. 

14. 7.REAL ESTATE FRAUD/LAND HIJACKING Real Estate Fraud is where one person or party commits fraud in connection with the purchase, sale, rental or financing of real estate property. It refers to deceptive practices in the real estate industry, where individuals or Organizations engage in fraudulent activities to unlawfully gain money or property. Real Estate frauds can take various forms, such as property flipping scams ,mortgage fraud, rental scams, foreclosure scams and identity theft related to real estate transactions.

15. 8.PONZI SCHEME A Ponzi scheme is a fraudulent investment scheme where the operator promises high returns to investors, often using money from new investors to pay previous investors. The scheme eventually collapses when it becomes unsustainable. Ponzi schemes are named after Charles Ponzi, an Italian born swindler who became notorious for running one of the most famous Ponzi schemes in the 1920s. Ponzi scheme operators lure investors with promises of unusually high returns or consistent profits, often claiming a secret investment strategy or access to exclusive opportunities, The scheme relies on a constant flow of new investors to pay returns to existing investors, rather than generating legitimate profits.AS the number of new investors slows down, the scheme collapses, leaving many investors with significant losses.