WHITE COLLAR CRIME

 Mr. Sutherland sociologistconcerned with crime in relation to business and

corporate bodies
 his POV is that economist well acquainted with business methods but not considered
as crime
 he attempts to integrate these 2 bodies law comparison of crime in the upper class,
composed of RESPECTABLE or at least respected business and professional men and
crime in lower class, composed of persons of law economic status. --> this
comparison was made for the purpose of developing new theories of criminal
behavior
 he coined word “white collar crime” for those who are persons of
“RESPECTABILITY AND HIGH SOCIAL STATUS” in course of their
“OCCUPATION” they commit such crime.
 they commit offence with SKILL, SOPHISTICATION, RESURCES OF
POWER, INFLUENCE AND RESPECTABILTY to avoid detection, prosecution
or conviction
 he also coined word “blue collar crime” for those in lower class it caused by
poverty of by person including feeblemindedness, psychopathic deviants living in
slum.
 white collar criminal (WCC’S) indulges because of GREED for money, power and
higher status in society and BCC’S for their basic needs.
 Mr. Sutherland opined that normal traditional crime is confined to poorer class and
administered by police, prosecutor and judges. and only 2% of higher-class people
are involved in the BCC. also, the volume of money involved in BCC is minute as
compare to WCC.
 WCC generally seen in land offices, railways, stock market, oil industry, banking, real
estate, politics etc.
 WC CRIMNALTY is express mostly in form of misrepresentation in financial
statement of corporation, manipulation in stock exchange, bribery of public official,
embezzlement and misappropriation of funds, tax frauds.  AL CAPONE called
theses as “the legitimate rackets”.
 in medical profession illegal sale of (alcohol, opium, narcotic) , abortion, fraudulent
reports and testimony in accidents cases, fake specialist , fee splitting.
Federal Trade Commission (1920) Report:
  the financial cost of WCC> of all other crime regarded as the “crime problem”.
 financial loss from WCC is great as it is, is less important than the damage to socal
relation. WCC violate trust and  create distrust which lowers social morale and
 produces social disorganization on a large scale. BCC  produces relatively little
effect on social institution or organization.
 WCC is real crime
The criteria of WCC as here proposed, supplements convictions in the criminal court in for
respects
1. Criminal court , juvenile courts etc are different type of agencies which deal with
crime. FTC ordered several automobile companies to stop advertisement of their
interest rate on instalment purchase as 6 percent since it actually is 11. It considered
as fraud failure to put such cases in crime statics gives error in their generalisation
2. For both classes, behaviour which would have a reasonable expectancy of conviction
if tried in a CRIMNAL COURT OR SUBSTITUTE AGENCY should be defines a
criminal. In this respect, convict ability rather than actual conviction should be the
criterion of criminality.
3. BCC like gangster, racketeers have been relatively immune in many cities because of
their pressure on prospective witness and public officials. Similarly WCC use their
position influence on courts, administration and money power to get away from
conviction
4. In bcc, the Federal Bureau of Investigation deals with a case of kidnapping, it is not
content with catching the offenders who carried away the victim; they may catch and
the court may convict twenty-five other persons who assisted by secreting the victim,
negotiating the ransom, or putting the ransom money into circulation.

 In wcc the investigation stops normally with one offender

 The BCC are handled by policemen, prosecutions and judges with penal sanctions in
the form of fines, imprisonment and even death
 The WCC either results in no official action at all, or result in suits for dames in civil
courts or handled by inspectors, by administrative board or commissions with penal
sanctions in form of warning order to cease or desist
  The WCC’S are SEGREGATED ADMINSTRATIVLY from other crimnals and
largely as a consequence of this are regarded as REAL Criminals by themselves

Sutherland says thatthere difference in the implementation of the criminal law is due
principally to the difference in the social position of the two types of offenders. Mr.
Sutherland gives examples as follows
A. Judge Woodward, when imposing sentence upon the officials of the H.O. Stone and
Company, bankrupt real estate firm in Chicago, who had been convicted in 1933 of
the use of the mails to defraud, said to them, "You are men of affairs, of experience, of
refinement and culture, of excellent reputation and standing in the business and social
world."
B. The business class, corporate bodies who are part of WCC have immense
influence on the legislatures as well.-This may be illustrated from the Pure Food
and Drug Law. Between 1879 and 1906, 140 pure food and drug bills were presented
in Congress and all failed because of the importance of the persons who would be
affected. It took a highly dramatic performance by Dr. Wiley in 1906 to induce
Congress to enact the law. That law, however, did not create a new crime, just as the
federal Lindbergh kidnapping law did not create a new crime; it merely provided a
more efficient implementation of a principle which had been formulated previously in
state laws.
C. When an amendment to this law, which would bring within the scope of its agents
fraudulent statements made over the radio or in the press, was presented to Congress,
the publishers and advertisers organized support and sent a lobby to Washington
which successfully fought the amendment principally under the slogans of "freedom
of the press" and "dangers of bureaucracy."
Daniel Drew, a pious old fraud, describes the criminal law with some accuracy, "Law is like
a cobweb; it's made for flies and the smaller kinds of insects, so to speak, but lets the big
bumblebees break through. When technicalities of the law stood in my way, I have always
been able to brush them aside easy as anything."
Sutherland catalogues the WCC’C as
1. They have greater influence in moulding law
2. They levy immunity by bribery, political pressure and extending benefit of business
or profession
3. The victim of wcc’s are weak.
4. They confine their victims who are scattered all over the country who could not
organise themselves to fight back. It is like stealing candy from baby.
5. The BCC chooses wealthy and powerful persons to commit burglary/robbery and
hence are caught and punished as their victims are powerful
Sutherland says “The theory that criminal behaviour in general is due either to poverty
or to the psychopathic and sociopathic conditions associated with poverty can now be
shown to be invalid for 3 reasons”
1. The statics of crime is only against blue collar criminals
 2. Generalisation of criminality is closely associated with poverty obviously does not
apply to wcc
3. Conventional theories neither describes the lower-class criminality nor the higher
class criminals.
Sutherland offers some new hypotheses which will substitute the old conventional theories as
criminality
1st hypothesis  PROCESS OF DIFFRENTIAL ASSOCIATION
 It is a not genetic/inherited but learned over period of time.
 This theory suggests that through interaction with others in a process of
communication (through gesture also), individual learned other people values,
attitude, technique and motivation for criminal behaviour
 Process of learning criminal behaviour by association with criminal and anti-criminal
people
 Differential association may vary in frequency, duration, priority and intensity.
 Those who become WCC’S generally start their career in good neighbourhood …
graduate from the colleges with same idealism…Get into particular business situation
in which criminality is thing and get inducted into that system
 The BCC’S generally start their career in deteriorated neighbourhood and families
and partial separation from law abiding people
criticism vague and unspecific not explain why people not surrounded with criminal
still commit crime or vice-versa
theory is its assertion that criminal behaviour can only be learned through association with
other criminals. It ignores cases where people can be self-motivated and individualistic and
still be moved to crime.
2nd hypothesis SOCIAL DISORGANZATION IN COMMUNITY
 Differential association culminates in crime because of the community is not
organized solidly against that behaviour. The law is pressing in one direction, and
other forces are pressing in the opposite direction.
 In business the “rules of games” conflict with “legal rules”… the better business
bureau and crime commissions, composed of business, professional men attack BCC
lent overlook the wcc’s who are their own member

Sutherland has summarised his paper as below

1. White-collar criminality is real criminality, being in all cases in violation of the

criminal law.
2. White-collar criminality differs from lower class criminality principally in an
implementation of criminal law which segregates white collar criminal
administratively from other criminals.
3. The theories of the criminologists that crime is due to poverty or psychopathic and
sociopathic conditions statistically associated with poverty are invalid because, first,
they are derived from samples which are grossly biased with respect to the socio-
economic status; second, they do not apply to the white-collar criminals; and third,
 they do not even explain the criminality of the lower class, since the factors are not
related to a general process characteristic to all criminality.
4. A theory of criminal behaviour which will explain both white-collar criminality and
lower-class criminality is needed.
5. An hypothesis of this nature is suggested in terms of differential association and
social disorganization.

Sutherland theory, SUMMARISTATION

1. WCC is committed by persons of respectability and high social status. They comit
the crime in course of their occupation of his high post.
2. They execute crime with skill, sophistication, resource or power, influence or
respectability. To avoid detection, prosecution or conviction.
3. White collar criminals can be categorised
 CORPORATE WCC
 OCCUPATIONAL WCC
COPORATE DEVIANCE
CD are described by Sutherland as
A. Deviance against employees when corporate bodies ignore the problems of
employees and exploit them by more work and pay less salary. - they ignore their
health and safety of employees- they mainly focuses on 1) profit maximisation 2) law
and govt doesn’t take strong action against them 3) corporate structure doesn’t
consider long term consequences 4)in order to avoid compensation to the injury they
term them as “neglect conduct of employees”
B. Against customers corporate bodies or companies supply food materials w/o
adequate checks and balance which result in sickness to customers—unsafe product
are sold- fraud committed by companies- deceptive advertisement- antitrust
violates: companies from cartels to reduce competition increase price of the products
C. Against government tax invasion- give huge donations to political parties to
influence legislation in their favour- some corporate house also has their own
candidate as representative
D. Against environment pollution (air-water -land)- use cheaper and old machinery
instead of advanced “green machineries”- for pollution their allegation against the
navratan companies like NALO for discharging fluoride contents.

OCCUPATIONAL DEVIANCE
1. EMPLYOEE THEFT: this takes place because small thefts are not noticeable in
large and impersonal corporation…they have very little loyalty to their corporation…
they feel that they deserve what they steal.
2. Embezzlement: stealing money by fraud the offender ranges from low level
employees to top executives…they take money to steal due to “social psychological
process” in 3 phases. In order to get better social status.
 3. FINANCIAL FRAUDS: To evade pay taxes and specially income taxes…middle
class and upper class are most common culprits…through chartered accountant to
manipulate their taxes…inside trading is also prevalent
DECIANCE IN PROFESSION
1. Medical deviance: fee splitting doctors receive from another medical professional for
referring a patient to him…unnecessary surgery to get paid more…billing for services
not given…large no. of examinations are conducted…doctors prescribe those medics
of a company who sends them costly gifts
2. Lawyers’ lawlessness: practising of overcharging clients…tax lawyer teaches trick to
other to evade tax.
3. Accounting abuse: fraud or negligence in the course of audits…conflict of interest
prevents many accountant example “Satyam scandal”

RONALD KRAMER AND REYMOND MICHLOWSKI- THEORY OF STATE-

CORPORATE CRIME (page 15 module 1 and 2 pdf)
 They presented their paper before AMERICAN SOCIETY OF CRIMINOLGY in nov
1990 they gave new theory state-corporate crimes
 They noted 3 major theoretical approaches to study state corporate crime each
corresponded to a different level of social action
1. “Differential association theory” developed by Edward h stuherland
2. “organizational theory” it argued that organisations could be criminogenic
either due to the performance emphasis on “goals” or as result of
“defective standard operating procedures”. This organisational approach
would eventually be merged with lack of usual social or ethical standard on
corporate crime
3. “Criminogenic forces”in the wider political-economic structure of
capitalism
Thus, “DA” addresses the “individual level of action”
“OT” Focuses on “specific institutional factor promoting or retading corporate crime”
“CF” Examine “the way broad, pre-existing social characteristics interact with the individual
and organisational level of action”
Although these 3 approaches are divergent and explain corporate and government crime
Kramer Michalowski argued that they can be brought together into an “integrated
theoretical if organizational deviance”
STATE -CORPORATE CRIMES
1. Kramer publishes 1st case study of state corporate crime in 1992 he explained in
his paper that how state and corporate actors (like nasa and Morton Thiokol)
interreacted with one another to produce risky Decsion making process and unsafe
action that resulted in death of astronauts and school teacher.
He argues that structural and organizational factors shaped the Decsion making in such a way
as to make the disaster more probable.
2. Department of energy and atomic energy commission produce nuclear and atomic
weapons for 50 years contracting with private firms mainly large MNC. The DOE
also made sure that production quotas who being met.
3. Value jet flight 592 crashed in Florida killed 105 passengers on may 1996. The
technical reason was due to a fire that erupted and lack of oxygen. Govt investigation
shows that ValuJet failed to comply with “host on regulation”. Federal aviation
administration also found neglect for not adequality mentoring the general safety

DEVIANCE IN GOVERNMENT page 24-25

 Sutherland theory discussed corporate(against employee ,cutomers , govt ,
environment) and occupational (employee theft, fraud , embzelement) bodies
deviance.
 In Kramer and Michalowski discussed govt deviance:
1. Political corruption: receiving kickbacks from business…the businessmen take
advantage and take high charges for the work they do for govt….the money goes from
public funds to the private companies…abusive management of public funds
2. Election impurities: denial of voting rights…political dirty tricks…spreading nasty
rumours about opponents,,,campaign finance abuse- rich people buy/sell political
influence by contributing funds to candidate campaign for example electoral bonds
and Adani Ambani , once candidate elected then in return they make Decsion in
favour of rich people/company
3. Official violence: political brutalities against citizens and dissenting voice in brutally
suppressed…”democide” killing of people by their own government like in
Russia ,China and many south Africa coutnires
THOERY OF NIKOS PASSES AND DAVID NELKEN ON WCC
 They agreed with Sutherland that there is corporate crime and occupational crime.
They also agree with Kramer and Michalowski about govt deviance crime.
 They add a new form of WCC which is ORGANSED OR PROFESSIONAL
CRIMES
1. Corporate crime: legitimate companies in the course of their usual business cheat
the govt. strongly competitive environment may indirectly foster corporate
irregularities.
2. Government crime: these include illegal acts committed by govt officials or with
their knowledge and support, as well as those that lead to cover up other person or
company crimes. This type of crime lead to personal, political, legislative gains.
3. Occupational crime: this refers to officials in govt jobs or other occupations came
across oppournities of making extra money by breaking rules. They occasionally
commit a fraud, but show as if their work is mainly legal.
4. Organised/professional crime: this involves people or groups of people whose
primary source of income is illegal. They set out to commit fraud, they systematically
look for possibility of making money and profit illicitly.
  The “mafias” and “drug lord” , human traffics, cheat funds, Russian mafia, chinese
mafia, Japanese yazuka are quite famous. Mexican drug cartles are famous organised
criminals.
 There are also “business oligarchs” terrorism and terrorist organisation are also
organised criminals.
 “cyberwarfare”, computer virus, labour racketing, sex trafficking, contemporary
slavery and forced labour.
 Organised crime dictionary meaning “criminal activities that are planned and
controlled by powerful groups and carries out on large scale”
 Year 2002 united nation conventions against “transitional organised crime” has
provided international definition of “organised criminal group’ as a group of 3 or
more persons existing over period of time, acting with the aim of committed crimes
for financial or material benefit European council also adopt same definition

HISTORY AND DEVLOPMENT OF CROUUPTION OF WCC IN WORLD (before

Sutherland thoery)
Carrier’s case (anonymous v. the sheriff of London) 1473 (page 27-28)
 Known as beginning of the prosecution of wcc, which is when business and
government professional commit crime in their professional capacity
 English court adopted new concept called as “breaking the bulk” doctrine if
someone transferring merchandise(goods) on behalf of someone else (being a bailee)
and keeps the property by breaking it open and misappropriating the contents then it
constitutes a crime of “larceny”(theft of personal property replaced as “theft ” in
1968)
Facts:
 A carrier(bailee) was hired by a Flemish merchant(bailor) to transport bales of
“woad” to the port in Southampton.
 The carrier opened the bales and took for himself. Some of it came to the possession
of sheriff in London the sherif gave it to the king
 The merchant sued the sheriff to return the good.
 merchant argued that the goods are not stolen, that the carrier only had temporary
property rights and so goods should not be given to the king
 sheriff argued that goods were stolen which was “felony” and therefore property
forfeited to the king as “waif”(runway or stolen property)
the legal relationship between the carrier and the merchant as now would have been seen as
one of bailee(carrier) and bailor(merchant). So bailee have a duty of reasonable care for
others property in his poession. Bailee is a person or party to whom goods are delivered for a
puropors, without transfer of ownership and bailor who entrust the good to bailee abnd acutal
owner of property.
So, the merchant had “royal safe conduct” covering his goods. This meatn that even if the
goods are stolen they would not be given to the king by use of a “waif”.
Judgement:
  Judges agreed that act of carrier constituted as larceny but they could not agree on a
rationale
 Lord choke concluded that carrier had lawful possession of the bales only
merchant retained constructive possession of the contents.
 Therefore, when a carrier broke open the bales and removed the contents he
committed the crime of larceny because he take the contents from the possession of
the merchant
 Merchant had a royal safe conduct covering his goods
 The court also agreed with merchant that sheriff was required to return the goods
to the merchant.--> because the carrier had temporary poession of goods and without
the permission of Merchant had “broken the bulk” and stolen the contents
 Merchant had royal safe conduct shence the property will be given back to him

UNITED STATE ANTITRUST ACT

 US antitrust law (USAL) is collections of federal and state govt, laws that regulates
the “conduct and organisation” of “business” corporates, generally to promote
“fair competition law” in other English speaking countries
 Mains statute are
1) Sherman act 1890
2) The clayton act 1914
3) The federal trade commission act 1914
4) The Robinson Patman act 1936
5) Celler-Kefauver act 1950
 These acts
1) restrict the formation of cartels and prohibit other collusive practise regarded as
being restraint of trade
2) they restrict the merger s and acquisitions of organisations which would
substantially lesser the competition
3) they prohibit the creation of “monopoly” and abuse of “monopoly” power
 the FTC, the us dept. of justice, state govt, and private parties who are mainly
affected may all bring action in the court to enforce the antitrust laws.
 The scope of antirust laws and the degree to which they should interfere in an
enterprise “FREEDOM TO CONDUCT BUSINESS” and “TO PRORTECT
SMALLER BUSINESSES” and to protect “COMMUNTITES AND CONSMERS”
are strongly debated.
 One view closely associated with the Chicago school of economics suggest that
antitrust law should focus solely on the benefits of the “consumers” and “overall
efficiency”.
History:
 In north America “trust” means that a large company that has or attempt to gain
monopolistic control of a market”
 Large no. of manufacturing companies emerged in 1880s and perceived to have
excessive economic power
Interstate commerce act of 1887
 began shift toward federal rather than state regulation of big business…100s of rail
road were bought up and consolidated into a “giant company”.
 similarly happen in banks and insurance companies also combined into group to form
powerful groups
 people argued for a strong “anti-trust” law so that American economy allow “free
competion” and give opportunity to induvial America to build their own business

 Senator JHON SHERMON passes the Sherman antitrust act in 1890

 The act remains core of antitrust policy.
 The act prohibits agreements in restraint of trade and abuse of monopolistic
power.
 It gives JUSTICE DEPARTMENT the mandate to go to federal court for order to stop
illegal behaviour of the companies or for remedies as well.
 In “progressive era”, president Rosevelt sued 45 companies under Sherman act.  in
1902 Rosevelt stopped the formation of the northern securities company which
threatened to monopolise transportation in north west (northern securities v us govt)
 Standard oil company of new jersey v US supreme court held standard oil co.
violated Sherman act- broke 36 company monopoly
Under Sherman act whomsoever tries to monopolise or attempt monopolise shall be
deemed to be guilt of felony on conviction shall be published with fine not exceeding 100
million dollars if corporation or any individual fine up to it will be 1 million dollar or
imprisonment for 10 years or by both punishment

ISABEL PATERSONA legal expert commented about Sherman act as  freak

legislation+ the antitrust act stands alone and nobody knows what it forbidsShe
believe in individual liberty, limited govt, economic power- she says that true competition
and market regulation came from voluntary interaction between individual and business- she
says that antitrust laws are unnecessary govt intervention into American free market
 After such criticism congress passed CLAYTON ACT 1914.
 This act prohibits specific business actions like price discrimination and price
fixations if they essentially lessened competition
 Conditioning sales on “exclusive dealing” agreements prohibited
 At same time congress established FTC it had legal and business expert. It had
power to “consent decrees” which gave an alternative mechanism to watch and
control antirust activities
 Big business began to diminishing after the “progressive era” for example ford
motors (page 32) they lowered the price and raised wages and promote
manufacturing efficiency. Ford term as “welfare capitalism”
 After this many attempts made to stop “cartelisation” which would be illegal under
antitrust act
Robinson Patman act 1936 sought to protect local retailers against on slaughter of the
more efficient “CHAINSTORES”.
  The act made illegal to “discount” prices.
 To control big business, the “new deal policy” makers federal and state regulation-
controlling the rates and telephone services provided by American telephone and
telegraph company. (AT and T)
 By 1970s fears of “cutthroat” competitions had been displaced by confidence that a
fully competitive market place produced fair return to everyone. The labour union
faded.
 The govt paid more attention to the damages that “unfair competition” would cause to
“consumers”, especially in terms of “higher prices”, “poor services” and “restricted
choices”
In 1982 the Reagan administration again used Sherman act to break up AT and T into one
long distance. Company arguing that competition should replace “monopoly” for benefit of
consumers and the economy as whole.
In 1990 again large companies sought to acquire another company but with the approval of
FTC or JUSTICE DEPARTMENT. Often govt demanded that certain subsidiaries be sold so
that the new company would not monopolize a particular market.
Microsoft trial 1999 (page 33)
 19 states and FTC sued Microsoft- in 200 the trial court ordered Microsoft to split into
two, preventing it from future misbehaviour- Microsoft appealed and court of appeal
reversed the Decsion-in front of new judge Microsoft and govt settled- the govt
dropped the case in return Microsoft aggreging to cease many of the practise the govt
challenges- in defence bill gates also argued that Microsoft always worked on behalf
of consumers and splitting the company would diminish efficiency and slow the pace
of software development in usa
THE AIM AND OBJECTIVES OF ANTITRUST ACTS
 Sherman act along with others are trying to stop
1. Cartels and collusion
2. Restrictive practices (price fix, bid rigging, market sharing and group boycott)
3. Rule of reason for courts
4. Tacit collusion and oligopoly
5. Merger and acquisition of big giant companies (celler-kefauver act)
6. Monopoly and power and monopolization (sherman act)
7. Predatory pricing (clayton act)
8. tying products (clayton act)
9. price discrimination (Robinson Patman and clayton act)

LIMITATIONS OF ANTI-TRUST ACTS

 Antitrust laws do not apply to several specific categories like sports, media , health
care, insurance banks and financial markets
 The clayton act 1914 exempts against any agreement between employees to form or
act in labour union. This was seen as “bill of rights” for labour. The act say that labour
of human being is not commodity or article of commerce
  The professional sports leagues also enjoy a number of exemptions.
 Antitrust act perceives as encroachment upon media and free speech. Newspapers
have antitrust immunities under “newspaper preservation act 1970”
 Also, regulation by states may be immune under “parker immunities doctrine”
 Insurance is allowed in antitrust exemptions
 The govt grant monopoly in certain industries such as utilities and infrastructure

When a person offers, promises, or gives a bribe, it is called active bribery, and when a
person requests, receives, or accepts a bribe, it is called passive bribery. Both forms are of
concern to companies and are outlawed.
Foreign corrupt practces act deal only with active bribery
Example of active bribery bribing police officer to escape fines or criminal prosecution
SUMMARY OF INTERNATIONAL LEGAL INSTRUMENTS AGAINST WHITE
COLLAR CRIME
1. Organisation of economic cooperation and development (OECD)- convention on
combating bribery of foreign public officials in international business
transaction- 1961 Canada and USA joined the organisation was names as OECD- its
headquarter at Paris- 31 countries as members- it criminalised corruption in
international business transaction and addressed the criminal liability
OECD also passes convention against corruption which was signed in 1997 and came into
force in 199
2. Council of European criminal law convention on corruption- nov 1998-this
council discuss active/passive bribery of national, international in “politics”, “private
sector”- addressed international cooperation to deal all these corruption in WCC’s
3. Group of states of Europe against corruption(GRECO) was established by a
resolution by EU in may 1999 to fight against corruption
4. 20 guiding principles for the fight against corruption Page 39-40 resolution
adopted by EU council in nov 1997. It formed a multidisciplinary group on
corruption.
5. MODEL CODE OF CONDUCT FOR PUBLIC OFFICALS: PAGE 39
6. THE COUNCILE OF EU CONVENTION ON PROTECTION OF EUROPEAN
COMMUNITES FINANCE INTERST
7. African efforts (40 and 41 page)

UNITED NATION EFFORTS AGAINST CORRUPTION OF WHITE-COLLAR

CRIME
 Kofi a anna the Secretary general of UNO had observed “CORRUPTION IS AN
INSIDIUOS PLAGUE” he further added this phenomena found in all countries- big
and small, rich and poor “corruption is a key element in economic under
performance and a major obstacle to poverty alleviation and development’
  4 dec 2000 uno passed a resolution 55/61 and formed ad hoc committee for an
effective international legal instrument against “corruption”
 Economic and social council of uno 24 July 2001 passes resolution regarding
preventing and combating the transfer of funds of illicit origin from corruption
act
 March 2002 international conference on financing for development for
fighting corruption at all level is a priority
 Uno general assembly resolution 58/4 of oct 2003 was adopted as convention against
corruption this convention has 8 chapters-brought change in thinking about WCC
and criminalisation- bought idea of prevention, criminalisation of wcc, prosecution of
wcc’s-called international cooperation- introduced new concept of seizure or freezing
of ill-gotten property.
 9 December was designated as international anti-corruption day
 UN convention against corruption has a clear message that international community
is determined to prevent and control corruption
 Convention introduces a comprehensive set of standard and measurers and rules that
all countries can apply in order to fight corruption
 Page 44-49 articles related to convention
Predicate offence is crime which Is part of larger crime more serious crime involves
making money through illegal means like fraud, smuggling, corruption etc
These crimes leads either to money laundering(making of black money to white money by
transferring it to common people account) or terroist financing.
Article 23 of convention on laundering of proceed of crime
TOI RUPPES 50 CRORES FINE SLAPPED ON AMNESTY. RUPEES 10 CRORE
ON AAKAR PATEL (PAGE 50)

TRANSPARENCY INTERNATIONAL
 Transparency international is international NGO which is bases in Germany (berlin)
found in 1993- non-profit purpose is to take action to combat GLOBAL
CORRUPTION and PREVENT CRIMINAL ACTVITES are out of corruption
 It also publishes for example
1. Global corruption barometer
2. Corruption perception index
 TI it members have grown from few individual to more than 100
 2016 global go to think tank index report 27th of 150 in world-wide think
tanks
 TI state that it is global society organisation leading the fight against corruption.
 TI mission is to create change toward a world free of corruption
 Define corruption as abuse of entrusted power to private gain which
eventually hurt everyone who depends on the categorist of people in a position of
authority
  TI does not take up “investigation” on single case of corruption or expose invdual
cases-it develops tool to fight corruption and works with other civil society
organisation
 Since 1995 TI has issued an annual “corruption perception index”- it also publishes
a global corruption report, a global corruption barometer and bribe prayers index
 Peter eigen. Micheal whihen, Hansjorg elshort
Funding from siemens in 2015 it was reported that TI accepted 3m dollar from siems-
siemens in 2008 paid on of the largest “corporate corruption” fine in history which is 1.6b
dollar-for bribeing govt official in various countries-TI recied the money form siemens even
TI due diligence procedure prohibit the organisation from accepting money from corporation
want to “green wash” their reputation by making donation
This really shows that TI is not pure as people think

Non-support of Edward Snowden nov 2013 TI chapter at Germany and Ireland proposed
a resolution calling for the “end prosecution of j Snowden…he should be recognised as
whistle-blower for his help to reveal the overreaching and unlawful surveillance by secret
service” but final resolution passed in its plenary session excluded any reference to
Snowden and call for “comprehensive protection on whistle bower from all retaliation”
(Page 53-55) siemens story
CORRUPTION PERCEPTION INDEX 2023
 Country score indicates the perceived level of public sector corruption on scale of
0(highly corrupt) to 100 (very clean)
 Denmark tops the list with 90 score…Finland 2nd…New Zealand 3rd…last 180th
Somalia
 The CPI doesn’t measure private sector corruption like money laundering, tax fraud,
financial secrecy or illicit flow of money
 CPI shoes no country is corruption free
 India ranks 93rd (39 score) out of 180…85th in 2022….76th in 2015

Module 3
ANTI CORRUPTION LAWS IN INDIA
1. IPC 1860
 Incodles some of the crimes which are now regard as WCC or corruption. corruption
was quite high in British raj
  Chapter 9 sections 161 to 165a. later on prevention of corruption act came and
provisions in ipc were deleted and included in this act. These are related to corution
by public servant. “public servant” given more elaborate definition in the act
 Chapter 9a corruption practise related to elections 171 b (briberu in election),
171h (illegal payment in connection with elections) 171 I (failure to keep accunts)
 Chapter 12 offence relating to coins and govt stamp to get illegal money
 Chapter 17 criminal misappropriation of property 403/404. Criminal breach of
turst 406-409. Cheating 415-420
 Chapter 18 offences like documents and property marks and offences related to
currency notes and bank notes

2. INCOME TAX ACT 1961

 this act came in against of tax evaders and corrupt businesmen and companies

3. BENAMI TRANSACTIONS (PROHIBITION) ACT 1988

 Benami transaction prohibition amendement act approval by parliament in 11 aug
2016
 Central board of direct taxation published its rules (CBDT)
 Fiduciary relationship in which one person is under a duty to act for the benefit of
other on the mater within scope of relationship like as trustee or, duty to act or advice
to another on matter as falling within relationship
 many forms of transactions where people prefer to deal in another person’s name
instead of their own, either to evade taxation, to surpass property ceiling laws or to
invest their black money etc
 Act seeks to deal with all such transactions which are carried out by under the
name of a certain person but the consideration is provided and benefits are
availed by some other person. With this, the beneficiary/financer enjoys the
property but does not fulfil legal responsibilities towards such properties.
 The purpose of the act is to prevent individual from avoiding taxes (or conceal illicit
weath)by acquiring assets in the name of others
2(8) benami property means any property which is subject matter of benami transaction
2(9)A benami transaction, as defined under Section 2(9) of the Act is a transaction in
which:
1. the property is held by one person and paid for by another; or
2. it is held in a fictitious name; or
3. the owner of such property is unaware of or denies having knowledge of such
ownership; or
4. the person financing such transaction is not traceable.
However, the Act prescribes certain exceptions to benami transactions under Section 2(9).
These exceptions include property held by:
1. karta for his or his family member’s benefit; or
 2. a person standing in fiduciary capacity for the benefit of another, including a
trustee, an executor, a partner, a company director or a depository participant or
agent; or
3. a person for the benefit of his spouse or child; or
4. a brother or sister or lineal ascendant or descendent.
2(10) A Benamidar is a person or a fictitious person, as the case may be, in whose name
the benami property is transferred or held and includes a person who lends his name.
Section 3 prohibition of benami transaction no person shall enter into and benami
transaction. Whoever enters shall punishable for imprisonment for term 3 years or fine or
both. Anyone enters after 2016 then chapter 8 applies rigours imprisonment of 1 year
minimum- extend up to 7 year + also shall liable to fine extend to 25 percent of market value
of property+ non cognizable and baillable offence
Section 4 no suit regarding claiming benami property against the person in whose name
the property held or against any other person shall lie or on behalf of a person calming to be
the real owner of such property
Section 5 any property held as benami shall be liable to confiscation by the central govt.
Section 6 probation on retransfer of property by benamindar if there is any transfer of
benami property that it shall be deemed as null and void.
Chapter 3 section 7 Adjudicatory authority appointed by appropriate goi-
Section 8 AA shall consist of chairperson and at least 2 other members.
Section 9they are member of IRS and held the post of income tax commissioner or
equivalent post + has been member of Indian legal servce+ chairperson and other
member of AA shall be appointed by CG + CG shall appoint senior most member
Section 11 AA shall not bound to follow CPC procedure but shall guide by the
principle of natural justice and subject to the other provisions of this act
Section 18 talks about authorities of this act they are 1) initiating officer 2) approving
authority 3) the administrator 4) AA
Section 23 IO after obtaining approval of the approving authority shall have power to
conduct inquiry or investigation
Chapter 4 Attachment adjudication and confiscation
 IO after getting approval from Approving authority gives notice and attaches
provisionally up to 90 days within which he will move for orders of adjudicating
officer
 AOHe servers summons and call parties and ADJUDICATES
 He is authorised to drop the matter fully or partial and he can also confirm the
attachment and finally confiscation of benami property
 Affected parties can go an appeal to the appleates tribunal. The property which is
confiscated will be possess of administrator and property will be managed by the
administrator
Chapter 5 appellate tribunal chiairperson retired/sitting hc judge+irs member+ ils
member
 the chairman is sitting or retired judge of HC with 5 years’ experience
 2 members are in “judicial” member from Indian legal service with rank of joint sec
of GOI and 2nd is administrative member from IRS
 Act in accordance with CPC and principle of NATURAL JUSTICE
 Appeal to HC within 60 days as a SUBSTANTIAL QUESTION OF LAW.
Chapter 6 Special courts
 special court head by session judge
 The court shall not take cognizance of the matter of any offence except when a
complaint is in writing made by the authorises or any official of CG or SG
Chapter 7 Offences and prosecution
 Section 3

4. PREVENTION OF CORRUPTION ACT 1988

 Santhanam committee recommendation
 New bill introduced to widened the definition of public servant, enhance the
punishment provided by old act, contain provision for attachment and confiscation
of ill-gotten wealth though corruption, order of trial court upholding the sanction
will be final, ipc provions adopted and interpreted, expedite proceeding- day to day
trail
Chapter 1
 Section 1- not applicable to j and k+ applies whole India + outside of India
 Section 2- public duty, public servant (wide definition), election+ case laws page
13/14
 RS NAYAK V AR ANUTLAY  definition of public servant at 2 (c)(i) says that
there are 3 categories of public servant 1) a person in the pay of GOVT 2) a person in
the service of govt 3) a person renumerated by fees or commission for the
performance of any govt duty
Chapter 2 appointment of special judges
 Section 3 - Power to appoint special judges- person not qualified for appointment as
special judge unless he is or been sessions judge or ASJ OR assistant session judge-
appointed by CG OR SG – as many as required for any offence ousnhable under this
act or any conspiracy to commit or any attempt to commit or any abetment of any
offence specified in clause a
 Section 4- cases triable by special judge any offence specified under 3(1) shall be
tried by special judge- day to day basis- concluded within 2 year- if not concluded
secial judge record the reasons for not having (extended by 6 month at a time- such
shall not exceeded 4 year)
 Section 5- procedure and power of SJ take cognizanve + obatian evidence+ judge
may pass upon sentenct on conveted person+ all power as district judge+
  Section 6 power of special judge to try summarily- sentence of not exceeding 1 year-
power to revert back to trial of warrant case if he thinks fit to do- no appeal by
aggrievd party in case of 1 month imprisonment of or fine of 2k
Chapter 3 offences and penalties
 Section 7- offence relating to bribing public servant being bribed/public servant
taking gratification other than legal renumeration- in case where public servant
demand and accepts the bribe he/she punishable for 3 year extend to 7 and also
liable to fine
 Case CM Sharma v AP STATE- “demand” of illegal gratification is sine quo non to
constitute the offence under this act
 Case Mubarak ali v state of mp- mere demand or solicitation by public servant
amounts to the commission of offence
 Section 8- offences relating to bribing of a public servant- any person who gives or
promise to gives undue advantage to another person(s) – shall punishable extend to 7
year or fine or both
 Case – Devan alias v Vasudevan and others- it is necessary that the accused should
have had the intent at the time when gave the gratification that is received by public
servant as motive or reward for inducing a public servant by corrupt of illegal means
 Section 9- offence related to bribing the public servant by commercial
organisation- punishment of 3 year extend 7 years- to obtain or retain business for
such organisation + or to obtain or retain an advantage in conduct of business
 Section 11- public servant obtaining undue advantage without consideration
from concerned in proceeding or business transacted by public servant- 6 month
to 7 year and fine
 Section 12- punishment for abetment of offence- 3 year to 7 year and liable to fine
(amended)
 Section 13- criminal misconduct of public servant- 4 year to 10 year and liable to
fine- said to misconduct dishonestly or fraudulently misappropriates or
otherwise convert for his own use any property entrusted to him or property
under his control as public servant(amended)
 Section 14 punishment habitual offender of sec 8 9 10- punishment of 5 year to 10
year with fine
 Section16-
Chapter 4- investigation into cases under the act
 Section17 persons authorise to investigate- person not below the ranks of: inspector
of police in cbi+ assitant commissioner of police+ deputy suprident police in state
vigilance organisation- police can investigate without the order of the court
 State govt through general or special order to authorised person initiated the
investigation
 Section 18 power to inspect banker books
Chapter 5 sanction for prosecution and other provisions
 Section 19 previous sanction necessary for prosecution (bare act se read krlo)
  Case- Ramesh lal jain v niginder singh rana- sc held that grant or refusal of sanction
must be preceded by “application of mind” by the appropriate authority. If the accuses
can demonstrate that such order to be suffering from non-application of mind the
same be called in question before a competent court of law
 Section 20- presumption where public servant accepts any undue advantage- in
trail of offence under section 7 or 11 it is proved public servant accused of an said
offence- it shall be presumed unless contrary is proved- that he accepted or
obtained or attemted to obtained undue advantage as motive or reward under sec 7 for
performing or to cause performance of public duty improperly or dishonestly
 Case rs nayak v ar antulay- court said presumption under section 20 applies only
after a charge is framed against accused. The presumption is applicable at the stage
when court is considering the question whether a charge should be famed or not.
 Section 21- accused person to be competent witness-
 Section 22 crpc apply subject to certain modification
 Section 23 particulars in charge in relation to offence section 13 1 a
 Section 24-omitted
 Section 25- military naval and airforce or other laws no affected
 Section 26-special judge appointed
 Section 27- appeal and revision- to high court will have power to appeal and
revision. where special judge was court of session
 Section 28- act to be addition to other law
 Section 29-
 Section 29 a- power to make rules – by central government
 Section 30 -repeal and saving
 Section 31- omitted

5. COMPANIES ACT 2013 (page 37-48)

 SECTION 132-
Chatper 16- prevention of oppression and management (241-246)
 Any member of company or GOI feel that the affaris of the company is “opressive” or
“prehudical in intrest” to its members, then they can file application to the
TRIBUNAL
LOKPAL AND LOKAYUKTS ACT 2013
 This act to provide the establishment of a body of LOKPAL for the union and
LOKAYUKTS for states to inquire into allegations of corruption against certain
public functionaries and for the matters connected or incidental to it.
Section (3)(2) Lokpal consist of chairmen which could be CJI or Jugde of SC or an
eminent person + such members not exceeding 8 (50% judicial members+ other members of
st,sc,obc,women)
3(4) people who shall not be eligible MP/MLA+ person with 45 year of age+ convicted
man+member of panchayt or municplaty+ person shall not hold any office of profit
Section 6 terms of office of chairperson and members for 5 years or becomes 70 year old
Section 20
a) preliminary inquiry either by the Lokpal enquiry wing or CBI. CVC may order for
enquiry
b) investigation by any wing including CBI to investigate as earlier as possible
inquiry report submitted within the 60 days to Lokpal bench. Bench will decide if
investigation to be done by CBI or any agency. Initiation of department action. Closure of
proceeding against public servant.
After investigation over report submitted into by the bench of Lokpal. Bench may grant
sanction to its prosecution.
Section 23 Lokpal cannot prosecute cases against person holding office in pursuance of
constitution Lokpal provsions not applied to article 311 and 320
Section 27
 1)Lokpal has powers of a civil court
 Any proceeding before Lokpal shall deemed to be judical proceeding within meaning
of 193 crpc
Section 37 complaints against the members, chairperson and official of Lokpal
 Removal of such person 100 MPs in writing will move the president. He shall refer
to SC to inquire. If found guilt he shall be removed from office by the president
 President may suspend such eprosn pending inqury by the SWC
 Any person if any way connected to any contract etc from which he recvies any
benegift it will be misbhevouir
Section 38complaint against the officials of Lokpal will be inqured into by Lokpal within
30 days
Section 46 offence and penalties prosecution for false complaint and payment of
compensation to public servent is imprisonment upto 1 year+ fine upto to 1 lakh

WHISTLE BLOWERS PROTECTION ACT 2011

 Satya Dubey, was murdered in 2003 he was whistle blowers in corruption in
national highway authorty in the project “golden quadrilateral project” by PM
vajpaye. He exposed the coruutpion and murdered
 after his death, SC in 2004 pressed the govt into issuing an office order under the
heading “public interst discolurse and protection of informer resolution, 2004”
 2011 sc refused to frame rules to protect whistle blowers
 2013 bench of SC consist of justice KS radhakrisnana and arjan kumar sikri ruled
to that identity of whistle blower can never be reveald to the accused facing allegation
under PC, 1988
 3(d) disclosre means attempt to commit commission of offence under PC act
 Section 4 public interst discolusre to comeptetn authority- in good faith the
complaint shall declare that allegation made by him is subtabtially true- in written or
electronic mail accompany with documetns- and no action will be taken as against
comlaint
 Section 5 complaint need to be checkd-no disclosure of the name of complanitns(if
it is made then consent need to be taken of complaninat)- cometent authorty may
close inquiory if complaint is fivlous and no sufficient gound to inqury- if complaint
found true then department inqury intitaed against the disclosure within 3 month (can
be extend)
 Section 6 matters not to be inqured by competent authority if is with tribunal or if
allegation is 7 year old or related to public servant act
 Section 11-> protection to person making disclosure- penalty upto 30k rs for non
compliance by any body will be liable
 Section 12 protection to the witness
 Section 16 penalty for relevation of identity of complainant- imprisonment upto 3
year and fine upto 50k
 Section 17 penalty for false disclosure imprisonment for 2 years+ fine upto 30k
BLACK MONEY
 In India black money is funds on the black-market on which income and other taxes
have not been paid
 Unaccounted money that is concealed from tax administration is called black money
 CBI estimates it Indian have 500 billion dollars in different tax havens
 In march 2018 it was revealed that Indian black money currently is estimated to be 4
trillion dollars
Reasons for black money in generation in India
1. Lack of strict punishment
2. Criminals pay bribe to tax authorities and get away
3. Black money conceals in India mainly by politician, film stars and busineman
4. Transfer mispricing by under invoicing their exports and imports from tax have
countries like Singapore, uae, hong kong
5. Vodafone-Hutchison tax case foreign MNC company also evade tax payment in
India by making transaction with shell companies registered under tax haven
countries
6. Round tripping involves getting the money out of one country, sending it to a place
like Mauritius and then dress up to look like foreign capital sending it back to earn
tax favoured profit
7. Foreign funds received by charitable institution, NGO and other associates need not
to be disclose the Indian beneficiary
8. Gold inputs though official channel and smuggling is major contribution in Indian
black money market from abroad
The use of Swiss bank for storing black money
 In 2010 the GOI revised DOUBLE TAXATION AVOIDANCE AGREEMENT. So,
govt could make specific request to Swiss bank to reveal the deposit of Indian citizen
 In 2011 the GOI received the name of 782 citizen had account in Hong Kong
Shanghai banking corporation (HSBC)
 The finance dept didn’t reveal their names for “privacy” reasons to parliament- but
govt agree to released white paper on HSBC
 White paper total amount in all Swiss bank at end 2010 by Indian citizens amounts
to inr 92 billion
 2016 Panama paper leak revealed 11 million document- document pertain to
21400 off shore entites-500 Indian like Amitabh bachan
 2016 Demonisation drive on nov 2016  notes of 500 and 1000 would cease to
be legal tender
  SC case and Special investigation team (SIT) writ petition filled in 2009 by ram
Jethmalani and other in SC seeking the court direction to help bring back “black
money” stashed in tax havens- ram and ashish goel said that Modi govt failed
miserably to bring back black money

BLACK MONEY (UNDISCLOSED FOREIGN INCOME AND ASSESTS) AND

IMPOSTION OF TAX ACT 2015
 To deal with black money that is undisclosed foreign income and assets
 This act gives procedure to deal with such income and assets and how to impose tax
on them
 Also provide punishment against certain defaulters and for giving false and
misleading assesment etc
 Refer sections from page 68 of module 3
GLOBAL CORRUPTION in USA
1. OPERATION “GREY LORD”
 Agents of criminal justice system have also been caught in official corruption it is
disturbing because society expects a higher standard of moral integrity from people
empowered to up hold the law and judge their fellow citizens
 This operation expose in ILLINOIS court system in USA
 Judges selling their favours to corrupt ATTORNEY for upto 50k dollars under table
payment 1 judge got 15 year prison sentence
 After this credibility of justice process weakened
2. “WHITMAN KNAPP COMMISION”
 Mayor john Lindsay appointed the commission under direction of judge Whitman
knapp to investigate allegation of corruption of police
 Commission found that police officers to senor police offcers reciveing “payoff” in
thousands of dollar from gambler, narcotic violators
 Construction firm, bar owners paid police to allow them to operate after hours.
 20 Philadelphia police officers were indicted on charges of exoting money james
martin former of Philadelphia police dept was sentence to 18 years in prison
3. MOLLEN COMMISON
 This commission empowered to investigate corruption against city police
 The commission found that very small number of “rogue cops” emerged in a pattern
of violence, theft, and drug dealing
4. HUD (housing and urban development) SCAM OF REAGAN ADMINSTRATION
 The revelation that official in Hud channelled funds targeted for the poor into the
hands of wealthy developers and consultants who were connected to the Reagan
administration
 Over period of 8 year, developer used political influence to drain BILLIONS OF
DOLLARS into questionable enterprises
 The HUD director was convicted of felony for 12 year- fraud, perjury
CORRUPTION IN CHINA
 Chinese criminal law in chapter 8 gives crime of embezzlement and bribery art 382
to 393 an induvial embezzles not less than 1lac yuan shall be sentenced to fixed
term not less than 10 year or life imprisonment and + may liable to sentence to
death+ confiscation of entire property
Case of BO XILAI
 He was chief of communist party of chong quing. the police chief was “wang lijun”
 The police chief was demoted on 2-2-2012.
 On 7-3-2012 Mr wang fled to US consulate in CHENDU near chong quing
 He was requested by Chinese authotires to came out of US consultant and by mayor.
 When he came out he was arrested and detained
 It was found out that mr wang had requested to bring family members of BO XILAI
under investigation of murder of a British national NEIL HEYWOOD later found
BO’s wife and her aid were involved in murder of Heywood
 She was a suspended and sentenced for 9 year imprisonment. Wang lijun was
sentence to 15 year
 BO was removed from his post and expelled form party and brought trial for
embezzlement- he defended himself
 He was also charges of “obstructing justice” for denying investigation of murder
charge by his wife
 Held judge said that BO had damaged the China national interest of its people,
wrongfully using his power in position and received bribes of total 20 million
yuan he was sentence for life and all of his property confiscated by authotires
Chinna claim to have sentenced 13000+ officals and found guilty in corruption- xi jingping
given credit for this “ZERO TOLERANCE”
CORRUPTION IN INDIA
1. Minining scam of karntaka
Lokayukta of karnatka uncovered illegal mining scam in 2011 report head by Justice N.
SANTOSH HEDGE
 3.3 crore tonnes of iron ore were illegally exported between 2006 and 2010
 customes department found 12.5 crore tonnes were exported to China
 Losses of state exchequer(treasury) of 1 lakh core
 Direct involvement of political figure in the illegal mining activiets
 Widespread encroachment on forest land
 Illegal transport of iron ores though port like Bellary district and
krishnapatnam ,bypassing documentation and taxation
People involved Reddy brothers (Janardhan Reddy, Karunakaran Reddy, and
Somashekhara Reddy) close connection with BJP govt
They own oblulaparam mining company for illegal mining actvites.
In response to report of 2011 Supreme court took up the case and imposed a ban on mining
in bellary district in 2011
The court also set up CENTRAL EMPOWERED COMMITTEE (CEC) to look into the
mining operations and recommend corrective measures.
 The CEC’s findings supported the Lokayukta’s conclusions, confirming large-scale
illegal mining activities and the involvement of powerful individuals. As a result,
the Supreme Court imposed strict regulations on mining in Karnataka and
ordered the sale of ore only through government-monitored e-auctions. These
actions helped curb illegal mining but also led to job losses and a slowdown in the
local economy, which was heavily dependent on mining.
 CEC also looked into reedy brother OMC and took action against it
After effects of lokyaluta report
 B. S. Yediyurappa was forced to resign as the Chief Minister of Karnataka in July
2011 due to allegations of corruption related to illegal mining.
 Reddy brothers were arrested by cbi in 2011, and Janardhana Reddy, the most
prominent of the brothers, spent several years in jail. His mining empire collapsed
after investigations.
 Report also found J. Reddy involved in tax evasion Reddy have entered MOU
with “one dollar company of Singapore” to camouflage his forex suppression and
money laundering
2. Vyapam Scam
 This scam is a massive corruption scandal involing the Madhya Pradesh
professional examination board (MPPEB) They conduct exam for admission to
medical colleage and recurtiment in govt job like teachers, police and govt clerks in
MP
 MPPEB in Hindi called VYAVSAYIK PARIKSHA MANDAL (VYAPAM)
 People involved in this scam were politician, senior officer, bussineman of MP
 FIR in 2000 1st report on Pre Medical test (PMT) for medical college admission and
recruitment exam for various state jobs
 The scam began to unravel in 2013 when some students were caught cheating during
a medical entrance examin 2013 police arrested 20 person who impersonated
candidates for PMT in 2009
 The leader of organised racket JAGDISH SAGAR was arrested in subsequent
various polictal leaders and business man, vyapam official and bureaucrates were
found to be involved on the scamSpecial task force disclosed ex education minster
LAXMIKANT SHARMA and over 100 officials were involved
 Scam involved manipulating OMR sheets and digital data, bribery to
examiners and politicians to manipulate exam result, leak of question paper,
impersonation by bright students to the actual candidate in return of money
 Dr. Anand rai (WHISTLEBOWER) filled PIL that he received death threat
court orederd state for his protection. Govt asked him to pay 50k for such protection
 Over 40 deaths of people connected to the scam, including witnesses, accused, and
whistleblowers, were reported. These deaths were labeled as either suicides,
accidents, or health issues, but the suspicious circumstances surrounding them led to
widespread allegations of foul play. Some notable deaths included: Dr. Arun
Sharma, who was aiding in the investigation, and Akshay Singh, a journalist
investigating the scam.
 The scam caused significant political damage to the BJP-led Madhya Pradesh
government, although Chief Minister Shivraj Singh Chouhan was not directly
implicated.
Corruption in JUDICIARY
1. JUSTICE V RAMASWAMY
 He is former supreme court Judge.
 He was 1st judge against whom IMPEACHEMENT MOTION was brought in
1991 “wilful and gross misuse of office” while serving as chief justice of Punjab
and Haryana court
 The motion was failed in the lok sabha in 1993, with 205 absentees out of
401(impeachment requires 2/3 majority)
 He had 14 charges of corruption against him
2. JUSTICE P.D. DINAKARAN
 CHIEF JUSTICE of Karnataka high court in 2009. He was stated to be promoted
to SC judge when the charges of corruption emerged.
 Transferred to Sikkim high court in July 2010. No FIR inquiry was ordered
 Impeachment proceeding started by 75 Rajya Sabha mps before proceeding starts
he resigned in 2011
3. JUSTICE NIRMAL YADAV
 Former Punjab and Haryana high court judge she got implicated in the cash at door
scam where 15 lakhs mistakenly delivered to her name in 2008
 Probe carried out by SC committee, CBI and police as well. In 2009 the CBI filed
“closure report”.
4. JUSTICE LALIT MISHRA OF ORRISHA HIGH COURT
 He was alleged to have appointed a candidate in judicial service by showing favours.
Latter on Orissa HC demoted him as district judge.
 In 2010 he was ordered for “compulsory retirement”

NATIONAL ANTI CORRUPTION STRATEGY

 STATE OF CORRUTION IN INDIA
1. Lack of integrity
2. Lack of transparency
3. Problems in public and corporate
 Forms of corruption petty and grand corruption
 Impact of corruption
1. stifles growth
2. perpetuates inequality
3. deepens poverty
4. causes human suffering
5. dilutes fight against terrorism and organised crime
6. tarnishes image of India in world
Vision a nation built on good governance, transpercay and integrity and free from all
corruption and responsible society aware of its ethical responsibilities
APPROACH CVC developed , adopted and maintain a NATIONAL ANTI CORUPTION
STRATEGY in India it help govt with endorsement of the vigilance advisory council
CENTRAL CIGILANCE COMMSION ACT 2003
 shri K Santhanam set up CVC

GREEN COLLAR CRIME: A CRIME AGAINST ENVOIRNMENT AND WILD LIFE

 Major concern for world as well as India
 Basically, GCC are those crimes which are committed against environment and Wild
life. These crimes are designated under the organised criminal activities in the world
and comes under 4th largest areas of crime in the list of structured crime around the
world
1. GCC are subject to laws that these acts illegal, however, it can also refer to morally
wrong things
2. Deforestation is huge problem in central Africa and Brazil, where it is a danger to
survival of many mammals such as gorilla and elephants etc
ROSEWOOD TRACKIING IN WEST AFRICA- soil erosion and deforestation, high market
value
3. GCC often depend on ecosystem that are being harmed
4. Poaching is another one against the wild life causing huge loss. Some species are
endangered. Tieger for its hide, nail, teeth etc
RHINO POACHIN IN SOUTH AFRICA horn used as status symbol and high market
value. 2017 poaching of rhino increase by 9000%

5. Mining usually takes place in forested area and destroy the ecosystem and illegal mining
causes huge loss of forest
GOLD MINING IN AMZON RAINSFOREST
6. Air pollution due to coal-based power plant
Carbon trading
7. Pollution due to atomic energy plants are huge. The disposal of waste in dangerous. (for
example, Chernobyl in USSR)
8. Environmental crimes are widely recognised as among some of the most profitable form
of trans national criminal activities their monetary values was estimated on 2018 at
between 91 to 256 billion annually, most likely the 4th largest criminal area after drugs,
counterfeit and human trafficng.
According to INTERPOL-UNEP report 2016illegal activities that involve the
environment, biodiversity or natural resources are often lucrative and involve comparatively
low risks for criminal
UN environment titled “the state of knowledge of crimes that have serious impact on
environment” lists 5 most prevalent environmental crimes
1. Wildlife crime
2. Illegal logging rose wood trafficking in west Africa- high international value
3. Illegal fishing
4. Pollution crimes
5. Waste trafficking
6. Illegal mining
7. Illegal production of CFC
INDIAN perspective
1) Amur falcon conservation in Nagaland
2) Curbing the “dancing bear”
3) Reducing hornbill poaching in ARUNACHAL PRADESH
4) Red sanders smuggling

CARBON TRADING is buying and selling credits that permits a company of other entity
to emit certain amount of carbon dioxide carbon credit and carbon trade are authorised
by govt. with the goal of gradually reducing overall carbon emission and mitigating its
contribution to climate change China has biggest carbon market
 2021 JulyChina started national emission trading program involve 2200+
companies in power sector and is designed to help the country reach it goal of achieve
carbon neutrality by 2060
 European union emissions trading system 2nd largest carbon trade in world
 Carbon trade originated in KYOTO PROTOCOL of un treaty that set the goal of
reducing emission by 5% below 1990 level by 2012
 The idea behind carbon trading is similar to trading of securities or commodities in
market place carbon is given an economic value allowing people or companies to
trade it if nation buys carbon, it means buying the right to burn it and nation selling
carbon mean giving up of right to burn
TRADE IN FOREST CERTIFICATION
 Forest certification become a trade barrier for developing countries
 About 4% of global forest areas in currently certified, mostly in developed countries
 Certification of forest management and eco- labelling of forest product are receiving
much attention as potential investment for promoting export
 In India it is in very nascent stage. Forest certification include 1) forest management
unit and chain of custody certification
LAUNDERINF OF ILLEGAL TIMBER AS ECO CERTIFICATE IS ALSO GREEN
COLLAR CRIME
  Eco certification is rigours process that consist of an independent and impartial
certification body assessing the conformity of a product, service or system with
environmental and social requirement specified in a standard
 EUTA-EU timber regulation is an example to prevent entry of illegal timber
INTENTIONS FOR GREEN COLALR CRIME
1. Motive for financial gain
2. Non-compliance in environmental matter may be company policy or due to mangers
personal gain
3. Mangers are over jealous to improve financial condition of company
4. It may be “rule” in a corporation to ignore environmental restriction to save money and
earn more profit
INTEGRATION OF WHITE-COLLAR CRIME WITH IT CSECTOR
 WCC mainly related and motivated to financial gain.
 Any crime in the internet is called cybercrime and these crimes are non-violent in
nature and especially motivates towards financial gain then it becomes WCC
 For example credit card fraud, mail fraud, phishing, identity theft, copyright
privacy hacking, Pegasus
 Pegasus its spyware developed by the Israeli cyberarm from NSO group that can
be covertly installed in mobile phones and other decision NSO GRUP developers
 Pegasus used by many countries IT ministry of India said that 45 Countries are
using it rumours that govt of India sing it against the media, politicians, opposition
leader and also against the activists and NGO and many Delhi based on Kashmiri
agencies and media
 NSO and Israeli govt claimed that their spyware is only sold to govt but none of the
nation including India came forward to accept
 Zero click method to infect device without device owner consent
 TARGETPegasus target every pillar of our democracy. Congress govt demands a
probe. Bengal poll not spared NSO denied any wrong doing because they say that
there develop it for use against criminals and terrorist and made available only to
military and law enforcement and intelligence agencies

 ANOM-apps “operation trojan shield” by FBI enforcement agencies.

 “SPECIAL OPERTAION IRONSIDE” by Australia law enforcement
 The FBI in collaboration with a person created “next gen” encrypted messaging app
and it was called ANOM. --> used by criminal gangs allowing federal agents to
monitor their every move in real time
 Anom is messaging device running as android and other smart phones it disables
normal function such as voice telephone, email and location service  FBI used this
app to intercept and decipher all message seat to different sources
 Joint operation conducted by American investigation and the Australian police and a
host of European law enforcement agencies
 Anom app appeared to be messaging app that could be used to communicate
without fear of monitoring by law enforcement this messaging app pre-installed in
phones which are sold in the black-market
 FBI says more than 12000 people downloaded FBI create master key to app that to
decrypt messages
 The US Justice Department said that 'Operation Trojan' led to 800 arrests of
worldwide criminals.
CONTROL FRAUD
 WILLIAM K BLACK gave the idea of control fraud and gave theoretical on it he
developed this concept his theory first given for banks but is now applicable to all
companies and corporate bodies
 Control fraud frauds in which the CEO or head of the state was the entity as a
“weapon”. CF cause greater financial losses than all other forms of property crime
combined and kill and maim thousands
 His theory on CF has precisely defined fraud committed by the directing minds of
the company who drive the entity or company like a vehicle to defraud creditors.
 In Indian jurisprudence “CF” concept evolved with the provision of SEBI AND
COMPANIES ACT 2013
 There must be deception deception must erode trust financial loss to investors
and creditors of the companycompany is both shield and weapon difficult to
detect and punish CEO or owner led crime in alliance with 3rd party can be
govt occurs in wave and systematic fraud early warning ignored
Examples:
1. SATYAM SCAM promoter (Ramalingam Raju) of company “Satyam computer
service ltd” used chairperson and CEOthe total company sale is 2.1 billion USDdue
to defective accounting system and “Tunnelling effect” syphoning company money to
the coffer of CEO caused the collapse CEO , auditors and promoter sentenced
imprisonment for 7 years and fine of 5 crore each
2. VIJAYAMALYA OWNER OF FIRM “KINGFISHER” AND KINGFISHER
AIRWAYS collapsed due to siphoning off profit by Vijaya Mallya- he is now fugitive in
UK- 9000 crore scam
3. Mehul Choksi DIAMON BUSSINESMAN of Gujarat- defrauded several banks
including SBI and fled to an island and bought citizenship there
4. LALIT MODi same Mehul Choksi scam he fled to UK
5. Case of Samsung CEO was charges of defrauding the company and also paying
heavily to the PM of south Korea-both are now in jail in south korea