White-collar crime (or corporate crime, more accurately) refers to financially motivated, nonviolent crime committed by businesses and government professionals.[1] 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”.[2] Typical white-collar crimes could include wage theft, fraud, bribery, Ponzi schemes, insider trading, labor racketeering, embezzlement, cybercrime, copyright infringement, money laundering, identity theft, and forgery.[3] Lawyers can specialize in white-collar crime




1.1   Introduction

White Collar Crime is a very common phenomenon in our society these days. Every day when we open the newspaper, or watch any television news or listen to any radio news, we cannot but know about different types of White Collar Crimes. But we don’t take seriously and most of the people don’t know about these crimes. But in present, the situation is different.

White Collar Crime is a crime which always committed by the persons of higher social status and respectability in the course of his occupation. Unlike conventional or street crime, white collar crime is characterized by the high status of offenders (crime of the powerful).The white collar criminals are mostly middle aged men of responsibility and high social status. They live in affluent neighborhoods and they are well respected in the community. A criminologist Sutherland had tried to say that, white collar crime referred to crime committed by business managers and executives. The white collar criminals behaviors are motivated by greed rather than need, a motivation supported by selfishness and individualism inherent in the value of capitalist society. Most of us hold the conception that “crime” is what street people, or at least poor people, do. Thus, there is , a certain incongruity in seeing an affluent, 60 year-old banker in handcuffs and a prison uniform. White-collar crime is not a classic, clear-cut case of deviance. It has one foot in conventionality and one foot in deviance.

In our Bangladesh, the concept, white collar crime , is a very new one. Most of the people of our country do not know this concept very well. Because white collar criminals, or the persons are responsible for doing such hypothetical crimes in Bangladesh are so powerful and have such high status  that they can easily escape from the scene and they becomes untraceable. Even the media, law enforcement agencies, or any other strong institutions cannot capture them. One of the main reasons of that is, maximum of them are in politics and some of them are high government officials. So, they are very hard to catch. Even big companies and businessmen are also maintain good relationship with them always and for that reason, a chain of criminals have formed their positions strongly. So, they are very difficult to capture. But from some recent activities, the people of our country are now knowing these crimes closely. The Share Market scam, the Padma Bridge Scandal, Hallmark Scam, Destiny Scams, these big incidents have opened the eyes of people of our country and they are starting to realize how these crimes can easily damage, not physically, but mentally and socially the whole society of any country. Our media, is currently playing a very good role in exposing these crimes and make people aware about these crimes. This is a very good sign. In this research of mine, I have tried to do my work on white collar crime widely, how this means, how the term used in different countries, what types of white collar crimes occurs in different countries, how the criminals look like and about their nature. Beside those, I have discussed here about the historical background and other phases that helped gradually the growth of this crimes and the famous cases and famous criminals of  recent white collar crime. I have also given some discussions about some recent white collar big incidents of our country regarding white collar crime.

1.2    Nature & Scope of the Research

Research involves original works in answering a question or solving a problem of the several different research approaches available, this book focuses on those approaches which can be applied to solve questions or problems that a directly related to everyday life. The technique of community involvement in practical issues is often called action research. This research confined the by the significant case laws, print articles, books, bear Acts, newspapers, social scholar and jurists. The following are the nature and scope and research :

  • Locating work that has-been already done on the topic, to decide if the particulars topic has been researched or if existing material can contribute to the present study.
  • Defining the objective of the project, or steps to the project in a clear, straightforward way.
  • Deciding upon the methods that will be used to accomplish the objectives.
  • Collecting the data according to the plan,
  • Examining the data according to the plan,
  • Reporting the results.

1.3      Aims and Objectives of the Research

According to various studies conducted by the association certified examiner, approximately 95% of the white collar criminals have no previous record. In fact, the higher the monetary value of the economical crime, it is less likely that the perpetrator will have a previous criminal record. White collar criminals know that people live on the hope of a better financial future. The white collar criminal’s job is to feed peoples hope with their spin and lies.

The followings are as well as the objective of this research paper

  • Whether it is a crime or not?
  • Whether white collar crime negative impact in corporate sector?
  • Causes and effects of white collar crime in our society,
  • How badly it costs the social structure of a country,
  • The remedy in case of the white collar crime,
  • To evaluate the statutorily provision and other legal context relating to the research topic,
  • To identify the problems of the white collar crime in case of such crime,
  • To accumulate the wide ranging and reliable information about the white collar crimes worldwide and white collar criminals.

1.4      Importance of the Study

Research is important because we are able to learn more things, people, and events. In doing research, we are able to make short decisions, for example, the importance of research in education. Research, with the general aim of systematically, improving an academic body of knowledge. It can improve our personal morals, responsibilities and promote our social values. In this research, I will try to work on the topic, white collar crime and its different aspects. The white collar criminals always has the initiative to commit their crimes. They have no respect for society and their victims. White collar criminals consider your humanity as a weakness to be exploited in the execution of their crimes. By your humanity, I mean your ethnics, your morals, and our great laws that create the presumption of innocence until proven guilty. Your trust, your morality, your ethnics, and our great legal system limit your behavior, while giving white collar criminals freedom to commit their crimes and obstruct justice. I will try to describe the future conditions and consequence of this matter on practical scenario. There is no complete research on this topic. So this research will contain great importance for the government of our country.

1.5         Research Methodology

This Research Monograph has been designed to carry out an initial review that will lay down some basic issues based on preliminary findings collected from secondary sources. As part of requirement of the first stage, a report on preliminary assessment of this topic was prepared and submitted. Finally the report provides suggestive measures on this Research Monograph. The mythology followed throughout the research paper has been point out below –

  1. a) Planning the whole research paper
  2. b) Taking advice from honorable Research Supervisor regarding the collection of necessary information
  3. c) Collection of study materials with the help of the concerning teachers, researches, friends, books, journals, articles & other sources regarding the person and institutions
  4. d) Study and discussion with the concern supervisor.

Methodology is very important for any research, as without adopting any methods, it is difficult. When I got the topic of my research and then just visit my supervisor with my approval letter and sought some sort of information regarding the topic, he helped me out with the concept of the topic and also the proceeding for preparing the paper. For starting the research, according to my advisors instruction I read out some evidence books. The optimum outcome of the research depends largely on the adopting of the proper methods related to the topic in the field of the proper investigation and sufficient care. When I prepared this research, I followed some methods, such as, case study method, sufficient method etc. respectively where it is applicable. The techniques of data collection followed in this research are interviewing, questionnaire, use of documents sources. I took help from my teachers, friends, and different websites for collecting information relating to the topic.



2.1 Introduction & Concept of White Collar Crime

The concept of white-collar crime draws attention to definitions of deviance which are determined by the powerful. Edwin Sutherland initially coined the term “white-collar crime” in order to point out weaknesses in typical crime theory that considered social pathology as the primary explanation behind criminal behavior. White-collar crime refers to crimes that are committed by “respectable people” during the course of their occupation. Crimes which are considered white-collar include embezzling, price fixing, insider buying, fraud, falsification of expense accounts (or other records), and theft of materials. This category of crime casts doubt on the notion that poverty breads crime.  White-collar crime is a criminal act that arises from opportunities created by a person’s social position, especially their occupation. White-collar crime is significant sociologically because of the perception that white-collar criminals tend to be middle- and upper-middle-class and because of a class bias in the criminal justice system, their crimes are generally viewed as less serious and less deserving of punishment.

white collar crime, a generic term for crimes involving commercial fraud, cheating consumers, swindles, insider trading on the stock market, embezzlement and other forms of dishonest business schemes. The term comes from the out of date assumption that business executives wear white shirts and ties. It also theoretically distinguishes these crimes and criminals from physical crimes, supposedly likely to be committed by “blue collar” workers.

2.2 Definition of White Collar Crime

White collar crime is a number of miscellaneous nonviolent crimes lumped together as white collar crimes. There is no fixed definition of white collar crime, although it usually includes bribery, embezzlement, fraud, forgery, and violations of trust committed by corporations or individuals engaged in commerce.  Criminologist and sociologist Edwin Hardin Southland first popularized the term “white collar crime” in 1939, defining such a crime as one “committed by a person of respectability and high social status in the course of his occupation.” Southerland also included crimes committed by corporation and other legal entities within his definition. Most important, white collar crime causes huge financial losses to federal, state, and local governments, to private organizations, and to individuals. In fact, in 1988 the United States Supreme Court acknowledged the severity of the white collar crime problem, stating that white collar crime “is one of the most serious problems confronting law enforcement authorities.


Sutherland observes that White collar crime may be defined approximately as a crime committed by a person of respectability and high social status in the course of his or her occupation


In his definition, Edelhertz not only dropped any reference to social status, but also the restriction that these offences must occur in an occupational setting. He observes white collar crime as an illegal act or series of illegal acts committed by non-physical means and by concealment or guile, to obtain money or property ,to avoid the payment or loss of money or property,or to obtain business or personal advantage.   Edelhertz suggested that Sutherland ’s definition was far too restrictive.


But Geis argues that white collar crime involves the abuse of power by persons who are situated in high places where they are provided with the opportunity for such abuse.

Sir Walter Reckless, an eminent American suggested that, white collar crime represents the offences of businessmen who are in a position to determine the policies and activities of business.

Some  authorities suggested that white collar crimes are committed by persons of status not for need but for greed. A variety of nonviolent financial crimes, generally committed by businesspeople or public officials, involving commercial fraud, consumer fraud, swindles, insider trading on the stock market, embezzlement, bribery, or other dishonest schemes.


White-collar crimes are categorized by deceit, concealment, or violation of trust and are not dependent on the application or threat of physical force or violence. Such acts are committed by individuals and organizations to obtain money, property, or services; to avoid the payment or loss of money or services; or to secure a personal or business advantage.

2.3   Causes of White Collar Crime

In general sense we can say that- white collar criminals are motivated by four factors:

  • Economic difficulty
  • Greedy
  • Rapid industrial growth
  • Economic growth

According to Dr. Yusuf  Nook (1993) and Joseph Eby Ruin (1996) there are three main causes of white collar crime:

  • Opportunities commit crime
  • Situational pressures on the individuals
  • Issues pertaining of integrity.

2.4  Types of White Collar Crime

Appelbaum  and Chambliss (1997:117) call attention to two types of white-collar crime.

A      Occupational  Crime

Occupational crime occurs when crimes are committed to promote personal interests.  Crimes that fall into this category include altering books by accountants and overcharging or cheating clients by lawyers.

  1. Organizational or Corporate Crime

A much more costly type of white collar crime occurs when corporate executives commit criminal acts to benefit their company.  There are a variety of corporate crimes that include

  • The creation of inferior products,
  • Pollution,
  • Price fixing.
  • Tobacco companies that add nicotine to cigarettes
  • When companies advertise food as “lite” when it has as many calories as regular food.

2.4.1   Different types of White Collar Crimes in our society

  1. Bank Fraud: To engage in an act or pattern of activity where the purpose is to defraud a bank of funds.
  2. Blackmail: A demand for money or other consideration under threat to do bodily harm, to injure property, to accuse of a crime, or to expose secrets.
  3. Bribery: When money, goods, services, information or anything else of value is offered with intent to influence the actions, opinions, or decisions of the taker. You may be charged with bribery whether you offer the bribe or accept it.
  4. 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.
  5. Computer fraud: Where computer hackers steal information sources contained on computers such as: bank information, credit cards, and proprietary information.
  6. Counterfeiting: Occurs when someone copies or imitates an item without having been authorized to do so and passes the copy off for the genuine or original item. Counterfeiting is most often associated with money however can also be associated with designer clothing, handbags and watches.
  7. Credit Card Fraud: The unauthorized use of a credit card to obtain goods of value.
  8. Currency Schemes: The practice of speculating on the future value of currencies.
  9. Embezz1ement: When a person who has been entrusted with money or property appropriates it for his or her own use and benefit.
  10. Environmental Schemes: The overbilling and fraudulent practices exercised by corporations which purport to clean up the environment.
  11. Extortion: Occurs when one person illegally obtains property from another by actual or threatened force, fear, or violence, or under cover of official right.
  12. Forgery: When a person passes a false or worthless instrument such as a check or counterfeit security with the intent to defraud or injure the recipient.
  13. Health Care Fraud: Where an unlicensed health care provider provides services under the guise of being licensed and obtains monetary benefit for the service.
  14. Insider Trading: When a person uses inside, confidential, or advance information to trade in shares of publicly held corporations.
  15. Insurance Fraud: To engage in an act or pattern of activity wherein one obtains proceeds from an insurance company through deception.
  16. Investment Schemes: Where an unsuspecting victim is contacted by the actor who promises to provide a large return on a small investment.
  17. Kickback: Occurs when a person who sells an item pays back a portion of the purchase price to the buyer.
  18. Larceny/Theft: When a person wrongfully takes another person’s money or property with the intent to appropriate, convert or steal it.
  19. Money Laundering: The investment or transfer of money from racketeering, drug transactions or other embezzlement schemes so that it appears that its original source either cannot be traced or is legitimate.
  20. Racketeering: The operation of an illegal business for personal profit.
  21. Securities Fraud: The act of artificially inflating the price of stocks by brokers so that buyers can purchase a stock on the rise.
  22. Tax Evasion: When a person commits fraud in filing or paying taxes.
  23. Telemarketing Fraud: Actors operate out of boiler rooms and place telephone calls to residences and corporations where the actor requests a donation to an alleged charitable organization or where the actor requests money up front or a credit card number up front, and does not use the donation for the stated purpose.
  24. Welfare Fraud: To engage in an act or acts where the purpose is to obtain benefits (i.e. Public Assistance, Food Stamps, or Medicaid) from the State or Federal Government.
  25. Weights and Measures: The act of placing an item for sale at one price yet charges a higher price at the time of sale or short weighing an item when the label reflects a higher weight.

2.5   Characteristics of White Collar Crime

  • Deliberate acts motivated by profit
  • Corporate Culture: Criminological: Differential association
  • Element of learning, peer support, Rationalization and Neutralization
  • Victimization: Diffuse
  • Lack of reporting and defining
  • Civil as well as Criminal violations
  • Sociological category
  • Sanctions: small fines, big payoffs
  • Investigation: limited resources, problem of technology

2.6   Features of White Collar Crime

  • White collar crime is not a traditional crime
  • By wearing mask
  • Highly responsible person
  • The use of deceit and concealment
  • The application of force or violence
  • The illegitimate gain of money
  • The illegitimate gain of property
  • The illegitimate gain of services
  • Abuse of positions of trust and power
  • Illegally use of political power

2.7   White Collar crime and Criminology

Within the field of criminology, white-collar crime has been defined by Edwin Sutherland as “a crime committed by a person of respectability and high social status in the course of his occupation” (1939). Sutherland was a proponent of Symbolic Interactions, and believed that criminal behavior was learned from interpersonal interaction with others. White-collar crime, therefore, overlaps with corporate crime because the opportunity for fraud, bribery, insider trading, embezzlement, computer crime, copyright infringement, money laundering, identity theft, and forgery is more available to white- collar employees.   Criminologists offer a variety of explanations for white collar crime, but they all have in common a way they approach their explanations.  They usually start with a disciplinary school of thought; e.g., biology, psychology, or sociology.  This is not the only starting point which can be taken, but it’s as good as any, especially since the study of white collar crime has so many confusing definitional issues, and a school of thought, after all, represents the initial starting point of a vast number of scholars.  There is then, the problem of level of analysis (sometimes called unit of analysis).  The traditional units of analysis for any scientific explanation are: macro-, meso-, and micro-.  There are other, fancier words for these levels, but a macro-level explanation aims to explain the root causes of something in society itself.  A meso-level explanation tries to find the middle ground, which in white collar crime study is usually the organizational level, or something in the nature of organizational life or business culture.  Finally, a micro-level explanation is one at the level of personality, or even biology.   It is the one which focuses almost exclusively on the inner workings of the minds (thoughts or belief processes) of the individual offenders.  The other approaches don’t neglect this, but they do only delve into mental processes by default or by secondhand.  Most American criminology of white collar crime has been at the meso-level, and has offered socio-psychological explanations at this level.

The “holy grail” in criminology for many years has involved the question of whether a general theory can be put together which explains both white collar crime and ordinary crime.  This has been the quest ever since Sutherland (1940) first raised the question.  No such general theories exist in criminology, although about every four decades (the last being the 1980s “integrated” theory movement), criminologist take up the challenge anew.  It might be worth mentioning that a general theory ought to be able to explain not only different types of crime, but provide similar reasons for why females and males, and minorities and non-minorities commit crime.  This is certainly a tall order, and makes it readily understandable why so many criminologists are specialists in one type of offender and/or one type of crime.  There are also those who approach the study of white collar crime from a criminalization or victimological standpoint.  Both of these people tend to perpetuate the endless definitional debates in the field, the criminalization specialists because they ponder over why so few white collar criminals get caught, and the victim logical specialists because they say we haven’t got any good grasp of the cost or impact.

Nonetheless, every theoretical explanation has at least one master concept which represents its central idea or thesis.  For scientific purposes, that master concept must be variable.  In other words, a person must be capable of having more or less of it.  A fixed, entrenched personality trait will NOT do.  It’s not enough to say that white collar criminals are greedy, that is, unless one invents a scale of greediness which allows for some range of variation or degree of greed.  Some of the oldest ideas are about fixed traits of offenders.  Old ideas die slowly in criminology, but there are some completely discredited theories.  For example, demonic explanations are totally discredited nowadays, not because careful research has been carried out on exorcism, but simply because the idea was a false start and didn’t carry the field forward very much.  Another example might be the facial appearance (or physiognomic) approach, the idea here being that criminals of all kinds tend to have sloping foreheads, beady eyes, and so forth.  C. Ray Jeffery (1990) was pretty much the last of the famous criminologists who dabbled in these waters.

2.8   Comparative analyses of White collar crime and other crime

2.8.1 Blue-collar crime

The types of crime committed are a function of what is available to the potential offender. Thus, those employed in relatively unskilled environments and living in inner-city areas have fewer “situations” to exploit than those who work in “situations” where large financial transactions occur and live in areas where there is relative prosperity.  Blue-collar crime tends to be more obvious and thus attracts more active police attention such as vandalism or shoplifting. In contrast, white-collar employees can incorporate legitimate and criminal behavior, thus making themselves less obvious when committing the crime. Therefore, blue-collar crime will more often use physical force, whereas in the corporate world, the identification of a victim is less obvious and the issue of reporting is complicated by a culture of commercial confidentiality to protect shareholder value. It is estimated that a great deal of white-collar crime is undetected or, if detected, it is not reported.

2.8.2 Corporate crime

Corporate crime deals with the company as a whole. The crime benefits the investors or the individuals who are in high positions in the company or corporation. The relationship white-collar crime has with corporate crime is that they are similar because they both are involved within the business world. Their difference is that white-collar crime benefits the individual involved, and corporate crime benefits the company or the corporation.

One well-known insider trading case in the United States is the ImClone stock trading case. In December 2001, top-level executives sold their shares in ImClone Systems, a pharmaceutical company that manufactured an anti-cancer drug. The U.S. Securities and Exchange Commission investigated numerous top-level executives, as well as Martha Stewart, a friend of ImClone’s former chief executive who had also sold her shares at the same time. The SEC reached a settlement in 2005.

2.8.3 State-corporate crime

The negotiation of agreements between a state and a corporation will be at a relatively senior level on both sides, this is almost exclusively a white-collar “situation” which offers the opportunity for crime. Although law enforcement claims to have prioritized white-collar crime, evidence shows that it continues to be a low priority.

When senior levels of a corporation engage in criminal activity using the company this is sometimes called control fraud.

2.8.4 Occupational crime

Individuals may commit crime during employment or unemployment. The two most common forms are theft and fraud. Theft can be of varying degrees, from a pencil to furnishings to a car. Most employees do steal and the expense is high. Insider trading, the trading of stock by someone with access to publicly unavailable information, is a type of fraud.

2.8.5 Occupational Death

A death that occurs while a person is at work or performing work is considered occupational death. An example of occupational death is the death of three workers at the Langley Mushroom farm. The three workers died after inhaling fatal doses of toxic fumes in September 2008. Two other workers were left with brain damage. Three operators were fined $350,000 after pleading guilty to charges linked to the death of the three workers.

2.8.6 Organized Transnational Crime

Organized Transnational Crime is organized criminal activity that takes place across national jurisdictions, and with advances in transportation and information technology, law enforcement officials and policymakers have needed to respond to this form of crime on a global scale. Some examples include human trafficking, money laundering, drug smuggling, illegal arms dealing, terrorism, and cybercrime. Although it is impossible to precisely gauge transnational crime, the Millennium Project, an international think tank, assembled statistics on several aspects of transnational crime in 2009:

  • World illicit trade of almost $780 billion
  • Counterfeiting and piracy of $300 billion to $1 trillion
  • Global drug trade of $321 billion

2.9   Common misconceptions of white-collar crimes

One common misconception about corporate crime is that its effects are mainly financial. For example, pharmaceutical companies may make false claims regarding their drugs and factories may illegally dump toxic waste. Indeed, the Hooker Chemical Company (later acquired by Occidental Petroleum Corporation) dumped toxic waste into the abandoned Love Canal in Niagara Falls and sold the land without disclosing the dumping. It was sold in the 1950s to a private housing developer, whose residents began experiencing major health problems such as miscarriages and birth defects in the 1970s. Additionally, employees of a company can become victims of white-collar crime. Regardless of whether they know about their company’s criminal activities or not, employees risk losing their jobs if their employer is charged with a white-collar crime such as fraud or embezzlement, incurs losses, and declares bankruptcy. Employees can also be victimized when employers are aware of physical harm to them but take no action. For example, miners in Newfoundland had been exposed to radon gas, and although the company (and the Canadian government) were aware of the health risks, they took no action.


Here all the basic knowledge related to the white collar crimes, its definition, types, correlations with the ordinary crime, comparative analysis of white collar crimes with other crimes has been discussed firmly.



3.1   Origin and Introduction

Within the field of criminology, white-collar crime has been defined by Edwin Sutherland as “a crime committed by a person of respectability and high social status in the course of his occupation” (1939).

Sutherland was a proponent of Symbolic Interactionism, and believed that criminal behavior was learned from interpersonal interaction with others. White-collar crime, therefore, overlaps with corporate crime because the opportunity for fraud, bribery, insider trading, embezzlement, computer crime, copyright infringement, money laundering, identity theft, and forgery is more available to white-collar employees.

3.2   History of White-collar Crime in Early Decades

Early Decades

Professor Sutherland was preceded by others who were aware of the damage to society from the upper socio-economic groups who exploited the accepted economic system to the detriment of the masses. Prof. Albert Morris calls attention to a paper entitled ‘Criminal Capitalists’ read by Edwin C. Hill before the International Congress on the Prevention and Repression of Crime at London in 1872. In this paper, the write noted the “growing significance of crime as an organized business requiring the cooperation of real estate owners, investors, manufacturers and other ‘honest’ people”.  As early as 1934, Prof. Morris called sharp attention to the necessity of a change in emphasis regarding crime.  He asserted that anti-social activities of persons of high status committed in course of their profession must be brought within the category of crime and should be made punishable.  Muckreckers condemned such practices (sub-sequently called white-collar crimes) decades ago. Nearly all textbooks on labour problems, corporation problems of finance and so on condemn them.

Finally E.H. Sutherland through his pioneering work emphasized that these ‘upper world’ crimes which are committed by the persons of upper socio-economic groups in course of their occupation violating the trust, should be termed as “White Collar Crime” so as to be distinguished from traditional crime which he called, “Blue Collar Crime”.

Although forms of bribery and embezzlement or even monopolistic price fixing surely outdate recorded history, the earliest documented case of white-collar crime law dates back to 15th century England. The law, enacted in 1473, was a response to embezzlement or larceny in what’s known as the Carrier’s Case, a situation where the agent entrusted to transport wool attempted to steal some of it for himself.

However, white-collar crime didn’t garner much public attention until it became more widespread after the Industrial Revolution in Western industrial societies. As companies rose in power, they were able to squelch competitors and then implement monopolistic policies without fear of being outsold by other companies. The public became enraged when they had to pay outrageously high prices for something that was previously cheap, for no reason other than corporate greed. But, under the law, manufacturers weren’t doing anything wrong — it was perfectly legal. However, popular opinion held that this was corruption that should be illegal and warranted government intervention.

Political movements rallied for laws to prevent monopolistic practices and succeeded in the United States in 1890, when Congress passed the Sherman Antitrust Act. It essentially attempted to make monopolies illegal. Other industrialized countries like England had a history of penalties involving white-collar crime by this time, but none so sweeping as the Sherman Act. Some nations implemented a smattering of these laws, known as competition or antitrust law, but didn’t strongly enforce them for very long. Therefore, the Sherman Act is generally considered the first modern competition law.

Stock fraud, as you might guess, is as old as the stock market itself. One age-old scheme called stock touting occurs when someone lies about his company’s prospects and promises sure-fire returns for investors. After it’s too late, the investors find that the schemer deceived them and instead pocketed the money and ran off. Whereas back in the day, a conspirator might lie to say he had a company that was building railroads in other countries, modern examples include those discovered upon the burst of the dot-com stock bubble, when actual results fell far below promised returns.

What’s more, from time to time, you may receive e-mails from people you don’t know asking for your help — like a wire transfer — to claim some long-lost fortune or to act as a shipping agent. These schemes are forms of Internet fraud, and they’re often perpetrated by scammers working from Internet cafes in Nigeria and Russia. The government of Nigeria — with financial support from the governments of the United States and Great Britain — has ramped up its Economic and Financial Crimes Commission to crack down on con artists who spam phony pleas to e-mail addresses throughout the world.

More anti-white-collar crime sentiment rose in the late 19th and early 20th century in the United States as a result of a group of journalists known as muckrakers. These writers strayed from regular news reporting to expose corruption in the public and private sectors. They wrote, among other things, of stock fraud, insurance fraud and underhanded practices of monopolistic companies that had fallen through the cracks of the Sherman Act. The muckrakers’ exposés incensed the public and resulted in some reform. By 1914, Congress attempted to solidify and strengthen the sentiment of the Sherman Act — which was used against labor unions — with the Clayton Antitrust Act. This act went further than the Sherman Act to make particular monopolistic practices illegal.

Nevertheless, in the ensuing decades, white-collar crime continued to rear its ugly head — or rather, all too often, go about unpunished. This phenomenon led to the birth of the concept white-collar crime as we know it today, which we’ll talk about next.

3.3   Modern Era : The Evolution of White-collar Crime

It’s worth taking ¬into account that although corruption may be old as dirt, the theories that shape how we think about it are rather new. The concept of white-collar crime didn’t come about until well into the 20th century.

A prominent sociologist, criminologist and president of the American S¬ociological Society, Edwin Hardin Sutherland, coined the term in 1939 to address what he saw as a bias in U.S. law enforcement. He pointed to how law enforcement focuses on the theft or violent crime of the lower classes and largely ignores the shady practices of the elite, business class.

In his speech to the society, Sutherland questioned the overarching presumption that conditions of poverty are what principally motivate crime. He went on to write an important book on the subject entitled “White-collar Crime” in 1949. His ideas proposed a radical new approach to thinking about crime — they shifted the focus from the crime itself to its perpetrators.

Clearly, Sutherland’s take on this kind of crime proved influential, as the term would eventually make its way into common parlance. But, his specific theories weren’t embraced by everyone, and other theorists have pointed to flaws and argued alternative ways to think about white-collar crime.

For instance, statistics have shown that these kinds of crimes aren’t restricted to the elite business class — people from all levels of an organization and social classes commit the kind of fraud Sutherland describes. Anybody can overhear a tip and participate in insider trading, for instance. To account for these stats and align with the American ideal that law shouldn’t discriminate based on social class, the terms “corporate crime” and “occupational crime” have been proposed as alternatives.

Another perceived flaw in Sutherland’s theory is that it fails to distinguish illegal crime from mere deviant behavior. In other words, under his definition, not all white-collar crime is really crime — it isn’t forbidden by law in the United States or elsewhere. For purposes of sociology, this isn’t a huge problem — in fact, it’s helpful. For instance, a broad definition of white-collar crime allows for reform that broadens the official laws against it. It also helps to carry over the concept into other societies outside the U.S. that might have very different ideas and laws of what constitutes white-collar crime.¬

But regarding discussion of law and its enforcement, there’s less room for ambiguity. Lawyer and sociologist Paul Tappan has argued to restrict the definition to only that which is illegal. Tappan’s strict definition certainly applies to the law school courses and law books that specialize in white-collar crime. However, even among law books, there’s disagreement about what falls in the category of white-collar crime. Interestingly, the scope of white-collar crime in a law book is broader, in a sense, than Sutherland’s view because it includes some crimes committed primarily by lower-level employees. For example, you probably won’t find well-to-do businessmen posing as telemarketers and calling unsuspecting victims.

In the end, no one can agree on a definition or an exhaustive list of what constitutes white-collar crime. All definitions come up short — even our own humble attempt earlier in this article. For instance, many definitions stipulate that the crimes are nonviolent, but, what about when a company’s toxic waste threatens a community’s health?

Despite the fact that the concept of white-collar crime is a nebulous social construct, the term comes in handy. We all have a conception of what distinguishes embezzling from mugging. Because of Sutherland’s work, we can start to answer these questions: How does white-collar crime impact society, and how can we prevent it? We’ll look into both of these questions.

3.4   How White-collar Crime Impacts Society

What makes white-collar crime so tempting? One reason is that a person who steals from a business can rationalize that his or her theft will hardly put a dent in the CEO’s handsome salary. In an episode of the television series “The Simpsons,” Homer ¬Simpson rationalizes committing insurance fraud by figuring that the only effect will be that his boss will have to go without buying an “ivory back-scratcher.” Although white collar criminals might like to think that they’re cheating only highly-compensated executives, these crimes can have a devastating ripple effect.

When a company suffers from fraud from any source, it must make up for it by raising costs, which ultimately means higher prices for consumers. It can also mean less pay for employees and even cutting jobs. The effect can continue to ripple when it comes to those employees or investors who now find themselves unable to pay off loans, and credit becomes harder to obtain. When stock fraud or insider trading scandals break out, like they did in the 1980s in the United States, it can cause investors to lose faith in the stock market. Scandals like Enron can also wipe out innocent employees’ retirement accounts.

Obviously, this kind of crime can have an enormous impact on society. The exact toll it has, however, is hard to quantify, both because of the wide ripples and the dilemma of finding accurate statistics.

Numerous factors make white-collar crime statistics hard to come by. As we discussed earlier, no consensus exists on a definition, and people disagree on what counts as a white-collar crime. Even if there were a consensus, however, accurate statistics are difficult to gather because the crime goes unreported and unpunished so often. Enron and other publicized scandals, it seems, are only the tip of the proverbial iceberg.

Even if fraud is suspected, there are no bloody footprints, no DNA evidence, no eyewitnesses and no smoking gun. One can’t conclusively declare as in the board game Clue, “Colonel Mustard, in the kitchen, with the revolver.” White collar criminals may leave only complex paper trails that take time and skill to sift through. Now, with the growth of technology and the rise of Internet, white collar computer crime is more rampant, but also more difficult to solve. Local law enforcement teams often find themselves ill-equipped to track down the criminal. The FBI has admitted that arrest rates for white-collar crimes are significantly lower than that for other types of crime.

Next, we’ll look into the laws meant to prevent white-collar crime as well as how those who commit it are punished.

3.6   White Collar Crime Researches before Sutherland

There were great scholars on whose shoulders Sutherland could stand. The Dutch Marxist, Willem Bonger, in h is Criminality and Economic Conditions (1916), was the first to develop a theory of crime which incorporated both “crime in the streets” and “crime in the suites”. Bonger’s contention was that capitalism “has developed egoism at the expense of altruism”. Bonger argued that a criminal attitude is engendered by the conditions of misery inflicted on

the working class under capitalism, and that a similar criminal attitude arises among the bourgeoisie from the avarice fostered when capitalism thrives. Influential criminological theory between Bonger and Sutherland continued to focus on class as the critical variable, but it was a truncated focus concerned with explaining why the poor seemed to commit more crime than the rest of us. Bonger’s insight-that to assume poverty causes crime is to neglect the widespread nature of ruling class crime-was largely ignored until Sutherland revived it. The important American antecedents in the early part of the century were the sociologist E. A. Ross (1907) and the muckrakers-e.g. Tarbell (1904); Steffens (1904); Norris (1903); Sinclair (1906). In journalistic exposes and fictionalized accounts, these writers laid bare the occupational safety abuses of mining magnates, the flagrant disregard for consumer health of the meat packing industry, the corporate bribery of legislatures, and many other abuses. The muckrakers were responsible for some of the important statutes, like the US Federal Food, Drug, and Cosmetic Act of 1 906, which criminalized many forms of corporate misconduct that Ross had been forced to label as “criminal-oid”. Sutherland’s mission was to turn muckraking into sociology.


Criminologist Ross (1907) first sought to focus attention on the threat presented by a form of ‘crimes of the powerful’, such as corporate crime 100 years ago .The term white-collar crime only dates back to 1939. Professor Edwin Hardin Sutherland was the first to coin the term, and hypothesize white-collar criminals attributed different characteristics and motives than typical street criminals. Mr. Sutherland originally presented his theory in an address to the American Sociological Society in attempt to study two fields, crime and high society, which had no previous empirical correlation. He defined his idea as “crime committed by a person of respectability and high social status in the course of his occupation” (Sutherland, 1949). Many denote the invention of Sutherland’s idiom to the explosion of U.S business in the years, following the Great Depression. Sutherland noted that in his time, “less than two percent of the persons committed to prisons in a year belong to the upper-class.”His goal was to prove a relation between money, social status, and likelihood of going to jail for a white-collar crime, compared to more visible, typical crimes.



Edwin Hardin Sutherland (born August 13, 1883, Gibbon, Nebraska, U.S. died October 11, 1950, Bloomington, Indiana) was an American sociologist. He is considered as one of the most influential criminologists of the twentieth century. He was a sociologist of the symbolic integrationists school of thought and is best known for defining white-collar crime and differential association, a general theory of crime and delinquency. Sutherland earned his Ph.D. in sociology from the University of Chicago in 1913.

4.1   White Collar Crime : Research Before Sutherland

There were great scholars on whose shoulders Sutherland could stand. The Dutch Marxist, Willem Bonger, in h is Criminality and Economic Conditions (1916), was the first to develop a theory of crime which incorporated both “crime in the streets” and “crime in the suites”. Bonger’s contention was that capitalism “has developed egoism at the expense of altruism”. Bonger argued that a criminal attitude is engendered by the conditions of misery inflicted on

the working class under capitalism, and that a similar criminal attitude arises among the bourgeoisie from the avarice fostered when capitalism thrives. Influential criminological theory between Bonger and Sutherland continued to focus on class as the critical variable, but it was a truncated focus concerned with explaining why the poor seemed to commit more crime than the rest of us.

Bonger’s insight-that to assume poverty causes crime is to neglect the widespread nature of ruling class crime-was largely ignored until Sutherland revived it. The important American antecedents in the early part of the century were the sociologist E. A. Ross (1907) and the muckrakers-e.g. Tarbell (1904); Steffens (1904); Norris (1903); Sinclair (1906). In journalistic exposes and fictionalized accounts, these writers laid bare the occupational safety abuses of mining magnates, the flagrant disregard for consumer health of the meat packing industry, the corporate bribery of legislatures, and many other abuses. The muckrakers were responsible for some of the important statutes, like the US Federal Food, Drug, and Cosmetic Act of 1906, which criminalized many forms of corporate misconduct that Ross had been to label as ”Criminal-oid”. Sutherland’s mission was to turn muckraking in to.

4.2   Sutherland : The Inventor

White collar crime became part of the English language when Edwin Sutherland gave his Presidential Address to the American Sociological Society in 1939 (Sutherland 1940). Sutherland’s talk, “The White Collar Criminal”, scorned traditional theories of crime which blamed poverty, broken homes, and disturbed personalities. He noted that many of the law breakers in business were far from poor, from happy family backgrounds, and all too mentally sound. After ten years of further research, Sutherland published White Collar Crime (1949). The book was a devastating documentation of crimes perpetrated by America’s 70 largest private companies and 1 5 public utility corporations.

His publisher, Dryden, insisted that all references to the companies by name be deleted for fear of libel suits. It was another 34 years before the uncut version was published (Sutherland 1983).

Sutherland (1983:7) defined white collar crime as “a crime committed by a person of respectability and high social status in the course of his occupation.” The definition has its problems. The concept of “respectability” defies precision of use. The requirement that a crime cannot be a white collar crime unless perpetrated by a person of “high social status” is an unfortunate mixing of definition and explanation, especially when Sutherland used the widespread nature of white collar crime to refute class-based theories of criminality.

These deficiencies have rendered white collar crime an impotent construct for theory building in sociology. No influential theory of white collar crime has developed, let alone an attempt to link such work to wider sociological theory. Sutherland’s theory of differential association in White Collar Crime was a general theory of all crime, one whose generality borders on a platitudinous restatement of social learning theory (Cf Mathews 1983; Albanese 1984).

As Farrell & Swigert (1983) point out, while there have been those who dabbled with differential association (e. g. Clinard 1946), anomie theory (Sherwin 1963), labeling theory (Waegel et al 1981; Swigert & Farrell 1980), and social psychological and personality theories (Stotland 1977; Monahan & Navaco 1980), theoretical progress began only in the late 1970s when the individualistic theorizing spawned by the Sutherland tradition was rejected in favor of applying organization theory paradigms to the phenomenon. Ironically, it was lawyers (Stone 1975, Coffee 1977) who led this theoretical reorientation rather than sociologists (but note the important roles of Cohen 1977, Schrager & Short 1978, Ermann & Lundman 1978, and Gross 1978). The reorientation became possible only when ties to the Sutherland definition were cut in favor of a focus on the narrower domains of organizational or corporate crime.

The only justification for locating contemporary research in the white collar crime construct is phenomenological. The concept is shared and understood by ordinary folk as more meaningful than occupational crime, corporate deviance, commercial offenses, economic crime or any competing concept. Moreover, as Geis & Goff (1983:xi-xii) point out, Sutherland’s Americanism soon became “crime en colblanc” in France, “criminaJita in colletti bianchi” in Italy and “weisse-kragen-kriminalitat” in Germany. Most researchers have dealt with the problem of definition by simply studying violations of particular laws (tax, environmental, antitrust, consumer protection, fraud). Patterns and processes of violations of such laws are all phenomena worthy of study in their own right, yet it is a pity that the phenomena do not comfortably sit as building blocks for theorizing around a more all-encompassing concept. In the conclusion to this review, I argue that we should cling to Sutherland’s overarching definition, but then partition the domain into major types of white collar crime which do have theoretical potential. Sutherland’s operation airing of the new concept also came under attack from lawyers. Sutherland was content to consider illegal behavior as white collar crime if it were punishable, even if not punished and if the potential penalties for infringement were civil rather than provided for in a criminal code (Sutherland 1983:51). Tappan (1947) led a tradition insisting on proof beyond reasonable doubt in a criminal court before anything could be called a crime (Burgess 1950; Orland 1980). Sutherland’s counter is today accepted by most sociologists-that to do this would be to sacrifice science to a class-biased administration of criminal justice that neglects the punishment of white collar offenders, often giving them the benefit of civil penalties for offenses that in law could equally be punished criminally. Sutherland was right in principle, but in practice he and his disciples often counted actions that were not violations of law (e. g. recalls of hazardous consumer products) as instances of white collar crime.

4.3   The Legacy Of Sutherland

Two young scholars who later became preeminent in criminology quickly followed in Sutherland’s footsteps-Marshall Clinard and Donald Cressey. Clinard produced a book on price control violations during World War II (Clinard 1952), and Cressey wrote Other People’s Money, a study of embezzlement (Cressey 1953). There followed a twenty year hiatus during which a few diehards, notably Gilbert Geis and Herbert Edelhertz, kept the flickering flame of white collar crime research alight (Geis 1962, 1967, 1968; Edelhertz 1970). As a result, white collar crime continued to penetrate criminological textbooks and sociological teaching on crime.

When Watergate and then the foreign bribery scandal took America and the world by storm in the mid 1970s, a generation of students had been educated in the vocabulary of white collar crime. Public interest in the subject overflowed; American research dollars were for the first time unleashed in significant quantities. By the late 1970s, an international community of white collar crime, scholars had been established.

4.4   The Theories of Sutherland

4.4.1   Differential Association Theory

Sutherland asserts that the excess of definitions favorable to deviance over definitions unfavorable to violation of law enforces a person become a deviant while associating with other persons.

Criminal behavior is learnable and learned in interaction with other deviant persons. Through this association, they learn not only techniques of certain crimes, but also specific rationale, motives and so on. These associations vary in frequency, duration, etc. Differential association theory explains why any individual forwards toward deviant behavior. His assertion is most useful when explaining peer influences among deviant youths or special mechanism of becoming certain criminal. Sutherland sought to give an explanation of white collar crime on the basis of his differential association theory but cautiously concluded that white collar crime has not yet been fully explained. According to him, some white collar offences represent ‘normal’ business procedures which are passed on as a part of the occupational subculture.

A new entrant to a business activity not only learns all the unethical practices but also sometimes made to use such tactics by his superiors in the establishment . The rapid pace of social change and the technical complexity of business affairs have aggravated social disorganization favourable to unethical business practices.

Clinard, while agreeing with the ‘differential association’ approach of Sutherland, is of the view that all cases cannot be explained by the theory. Many businessmen do not commit such offences despite their knowledge of the techniques employed in these crimes.

4.4.2   Criticism of Sutherland’s views on White Collar Crime

The Concept of white collar crime as propounded by Sutherland has evoked criticism from certain quarters.Paul W. Tappan, an ardent advocate of the legal definition of crime observes that, the inclusion of administrative decisions as the basis for defining treating persons as criminals opens the door to the extension of the concept of crime to cover behavior which a particular administrator deems nefarious. The moral values of the administrator would be substituted for what Tappan regards as the ‘Clarity and Precision” of the legalistic definition of crime.

Coleman and Moynnihan pointed out that the lack of definite criteria for determining who are ‘persons of respectability and status’ has made Sutherland’s definition of white collar crime most controversial. It seems likely that what Sutherland meant by this is absence from convictions for crimes other than white collar crimes. The element of ‘high social status’ as used in this definition also leads to confusion, Clearly, it has far narrower meaning than is given to that term in everyday usage.   Another objection against the definition of white collar crime is that it does not necessarily require ‘mens rea’ which is very essential element of crime.



5.1    White Collar Crime In Various Professions

     Doctors

     Engineers

     Lawyer crimes by criminal breach of trust

     Judges

     Politicians

     Govt.officer

     Private officers

     Private Corporate officials and their houses.

5.2   The Cost Of White-Collar Crime

The dollar loss attributed to white-collar crimes, according to Sutherland, is probably greater than the dollar loss from all other types of crimes. For example, the American business community lost $50 billion in 1980 to white-collar crime. This was nearly 10 times more than the monetary value of all forms of street crimes (from Eitzen, 1986:426).

5.3   The Goals of White-Collar Crime: Profit And Political Power

Money is not the only motive for engaging in white-collar crime. Often political power is the goal. In the 1950s and 1960s, when the FBI illegally broke into offices of left-wing political organizations, enhancing power was the objective, not money (see Coleman and Cressey, 1984:416). The entire Watergate affair was oriented toward enhancing power.

5.4   Murder By Neglect

White-collar crime can describe situations where companies or individuals knowingly use substandard building material, market untested drugs, or knowingly (and illegally) pollute the environment. Neglect of worker safety requirements may also be considered white-collar crime. Every year in the U.S. between 120,000 and 200,000 people die from work related illness and 14,000 die from on-the-job accidents.

Many occupational deaths are a result of organizational negligence. Chemical companies, coal mines, and asbestos operations represent organizations that experience high rates of death while organizations make profit.

  • Remember the Dioxin that was sprayed on streets of Times Beach, Missouri?
  • Remember Love Canal?
  • How about the Ford Pintos, which exploded upon suffering rear end collisions (see Ralph Nader’s Unsafe At Any Speed).

In all cases, the companies involved were aware of the consequences of their actions.

In the case of Dioxin, the deadly effects are well documented. Dioxin is one of the most toxic substances known to human beings. Three ounces can kill one million people. At Love Canal, the Hooker Chemical Company dumped 200 tons of chemical waste that contained 130 pounds of Dioxin.  In the case of the Pinto, the company failed to recall cars even after the problem relating to the position of the Pinto’s gas tank was well documented. Ford found it more profitable to pay settlements after accidents occurred than to recall the Pinto for repairs. Deaths that result from corporate neglect should be considered “murder by neglect,” but white-collar crime is not seen in the same light as street crime.

5.5   Some Theories About The Back Practice Which Intends A Person To Commit White Collar Crime

When Sutherland first wrote about white collar crime, he maintained that it was best explained by his theory of different association. For Sutherland, the law breaking behavior of businessmen, professionals and politicians (as well as all other law violators) was the product of a learning process. Violators encountered examples of law breaking among those with whom they worked and they drifted or jumped into such patterns of behavior as part of their routine introduction into the requirements of their job.

In respect of corporate crime, GEIS (1967) examined evidence given during hearings of illegal price-fixing activities of the heavy Electric Equipment Antitrust case in 1961 in America, and found that people taking up new posts tended to find price-fixing to be an established practice, and picked it up themselves as a part of learning their job.

NEIL SHOVER (1998) states that some white collar crime are committed as a result of the pressure to meet self-defined or externally imposed standards of successful performances.

These are the reason for that’s’ why a person commit white collar crime.

5.6   Correlative Features on White Collar Crime And Corporative Crime

  • White-collar crime tends to be made up of complex, sophisticated, and relatively technical actions.
  • White-collar crime tends to be intermingled with legitimate behavior
  • Victimization tends to be diffuse. Harm is not always conceptualized or identifiable as such because it is usually spread out over a substantial number of victims.
  • The monetary sums that are involved tend to be quite large. i.e. Michael Milken, Ken Lay

o      White-collar criminals steal by manipulating symbols rather than objects

o      White collar crime occurs extends over time

  • White-collar crime is rarely prosecuted and rarely convicted. Penalties are light.
  • With respect to perception and prosecution, evidence indicating that they have taken place is not as clear-cut as with street crime.
  • Limited media coverage
  • Corporate criminals are not heavily stigmatized: they don’t acquire “criminal identities.”
  • Relative to their incidence, arrests are very rarely made

The Federal U.S. Sentencing Commission found that for white collar crimes prosecuted by federal courts between 1984- and 1987, sentences against convicted corporations tended to be extremely light; nearly half entailed a fine of $5,000 or less, 80% were fined $25,000 or less, and even probation against executives was imposed less than one-fifth of the time. Jail or prison time tends to be almost nonexistent.



In Bangladesh white collar crimes, in contrast to blue collar crimes, are on the rise. Here politics has criminalized and corruption has taken strong hold. Transparency international, a German based non-governmental organization, has identified Bangladesh as the most corrupt country in the world for consecutive five years. People of upper socio-economic class, ruling elites and people of different groups are committing white collar crimes. They are making huge amount of money by corruption, manipulation and abused of power causing severe detriment to national economy. The latest size of black money in the country stands at list taka 60,000 crores, a volume which is equivalent to one-third on the gross national income.  Their crimes are insufficiently focused, most of the time undetected and remain beyond the domain of legal process. They are very influential in terms of power and money.

In Bangladesh praspective there have so many sectors for white collar crime. Those are given below,

6.1   Political Sector

Politicians are the elected representatives of the people, repository of public confidence. As policy makers of the country, they are supposed to lean the nation towards a positive direction, to equip us for twenty first century. They should ensure good governed and to development of Bangladesh. Instead of dispensing their proper role, they are alleged to be involved in corrupt practices. As a class, politicians have been identified as the most corrupt section in many countries; Bangladesh is not an exception to this. In 2005, among the people involved in corruption, 8.1 percent were elected representatives. Among them 43.5 percent were Up (Union Parisad), chairman, 27.1 percent were UP members, 11.8 percent were municipality chairman, 8.2 percent were members of parliament, 4.7 percent minister, 1.8 percent were ward commissioners, 1.2 percent were city mayors.

One ward Commissioner of Chittagong City Corporation occupied government land of taka30 crore by fraud and fake documents. Ward Commissioner, Mohammad Hossain Hiron, has a number of terrorist groups. He has been in the position of huge land of government, which he occupied by creating fake documents. Moreover, he has occupied huge land left by Biharis and minority groups.  In the city area of Nowgaon some people have occupied government land of taka 20 crore. The people are patronized by influential political leaders.

After wheat and oil scam, one parliament member was involved in sugar scam, for which government was deprived of 1 crore taka.  Allegations were rised as to the financial irregularities of 5 crore 19 lakh 31 thousand taka in the construction of a Sluich Gate at Gomastapur upazila of Chapainawabgonj district.

6.2   Corruption of Government Officials

Corruption, bribery, and abuse of power are not related to any specific Government of Bangladesh. BNP and Awami League governments cannot only be blamed for that, rather they have become inevitable part of the corrupt state mechanism and political culture. The amount of bribery and misappropriation of 24 ministries were 15 thousand crore taka during the last seven years. This was revealed in a report on February 4, 2002 submitted by the Comptroller and Auditor general of Bangladesh. During the sayed period police took bribery of an amount of 2 thousand 66 crore taka and officials of lower judiciary 11 hundred 35 crore taka. In one of their report in 2002, Transparency International identified police department of Bangladesh as the most corrupt among all the departments. Lower judiciary placed the second position, public health sector third, education sector fourth and electricity sector fifth.

During the last ten years, 10  state-owned financial organizations did huge financial irregularities and corruption. In terms of money the irregularities were equivalent to taka 17 thousand 5 hundred 88 crore.  Allegations of misappropriation of crores of money were received from 15 government projects, among which 4 were related to housing and 6 to construction. Moreover, in some projects, crores of money was expended, though those projects were not approved in the ECNEC. Two sub-committees of the parliament were investigating the details of the project.  In a survey report of Transparency International, POLICE DEPARTMENT AND LAWYER judiciary was identified as the most corrupt service organizations. 83 and 75 percent citizens become victim of corruption when coming to get service from these departments. Land administration placed their position, where 72 percent citizens experienced corruption, when they come into contract with land officials. Subsequent positions were occupied by public health, Education, Electricity and Taxation Department. There 55, 39, 32 and 19 percent service seekers become victim of corruption respectively.

6.3 Corruption of Judges

15 judges were punished for their proved involvement in corruption, out of them 4 judges were given forced retirement, 4 were recommended to be sacked. Permission of the High Court Division was sought to file departmental cases against 7 judges. Among the judges 2 held posts equivalent to District and Session judges, 7 were Joint district judge and 2 were senior assistant judges.   The Bureau of anti-corruption and intelligence Brace had received allegations against 8 judges about their involvement in talking bribery and corruption. All of them are owners of crores of money. They have industries, factories, luxurious abode and a number of flats in their name or names of their family members.

6.4 Corruption of Doctors

Bribery, corruption and abuse of power have become inevitable part of all types of institutions of Bangladesh, health sector is not an exception to this. Patients of different government hospitals do not get medicine, which they are supposed to get. Rather some officials of the hospitals sold the medicine at a lower price to the surrounding medicine shops. Through this process lakh taka’s medicine of Dhaka Medical Collage Hospital are trafficked and sold.

In2005, health sector, among others, was identified as one of the most corrupt sectors. Health complex (61.9%), Medical college Hospital (17.06%), Office of Family Planning (5.95%), Office of Civil Surgeon (1.98%), specialized-hospital (1.59%), Private Clinic/Doctor (4.37%) were the sub sectors to be involved in corruption. Among different types of corruption in health sector, the most prevalent were misappropriation (43.7%), negligence of duty (31.1%), abuse of power (11.1%), bribery (8.7%), and cheating (2.4%). In this sector , the first class officers were mostly involved in corruption, who constituted 62.4 percent.

6.5 Corruption of Engineers

Engineers have lot of opportunities to do corrupt practices, which they are alleged to do by underhand dealing with contractors, letting perfunctory construction of infrastructure, including road, building, bridge, culvert etc. the transaction of public procurement contracts creates ample opportunities of corruption for the engineers. Public procurement contracts are supposed to go to the lowest bidder, but in many of the cases they do not, as appropriate authority is bribed. “Even an award in favor of the lowest bidder may involve corruption, if the firm has paid the highest bribe to bring this about. The scope for exchange of money remains because normally there are ways in which the lowest bidder may be eliminated on technical or procedural grounds. In this latter case, the tender committee members gain at the cost of the bidding firm, not the state, at least in the short run. In the long run, the state is the likely loser because the contracting firm may try to recover the bribe to the tender committee by again bribing the supervisor to take a sleepy attitude toward the quality of work done, services rendered, or materials supplied.”

Abuse of tender of the road development project of LGED has become usual incident. The cadres of government party are forcibly taking the tender before opening the tender box. They get construction works by underhand dealing with the authority, namely, engineers.



7.1    The Underworld Banking System

Gangs such as the Bloods, Crips and La Nuestra Familia that are undertaking white-collar crime are recruiting members that possess the necessary high-tech skill sets, according to the FBI. “Some that run these criminal gangs could run corporations,” Armstrong said. “They push out less profitable businesses and build up the more profitable (ones), just as a corporation would.”  The FBI says gang members are exploiting vulnerabilities in the banking and mortgage industries for profit. They are turning to counterfeit and identity theft, using methods such as skimming to steal account numbers from ATMs or retail card readers. Mortgage fraud is also on the rise, and gangs, such as the Gangster Disciples, are purchasing properties with the intent to receive seller assistance loans, only to retain proceeds from the loans or comingle illicit funds through mortgage payments.

In April 2009, members of the Bloods in San Diego were charged with mortgage fraud, and in August 2010, members of the Black Guerilla Family in Maryland used pre-paid retail debit cards as virtual currency inside Maryland to buy drugs and further the gangs’ interests, according to the FBI. “Wall Street has a brilliant system for pushing money around the world. So does organized crime,” Armstrong said, liking the underground profit-driving activities to an “underworld banking system.”

Earlier this month, authorities in New York arrested more than 100 service-sector employees in the city and dismantled five separate criminal enterprises operating out of Queens in a multi-million dollar counterfeiting scheme. New York Police Commissioner Raymond Kelly had said that while those crimes weren’t holdups at gunpoint, the impact on victims was just as bad. Robert Rebhan, a former Los Angeles Police Department officer who later directed a credit card fraud prevention program for American Express (AXP), notes that those are the kind of stunts, which are less risky and more profitable than traditional street crimes, that gangs are likely pursuing.

“If I have dirty money from a drug steal I need the underwater market to clean it up, so I might only get 20% return,” Armstrong said. “But if I can make it credit card fraud, then I can probably get better than a 20% return rate, particularly if I can use the compromised credit card to buy real goods and turn over those goods on an auction site.” Cyber criminals typically steal a smaller amount of money from a large number of victims. Since, credit card companies and banks aren’t reporting minor counterfeiting cases to the Federal Trade Commission, it becomes the responsibility of victims. Rebhan, who is a financial crimes expert, says 95% of those are never reported – making web-based fraud tougher to identity. “It’s not a critical step in recovering your identity – it’s a pain,” he said. “So when you hear crime is down – don’t believe that’s true of financial crimes.”

7.2    From The Streets to Cyber Space

U.S street gangs are likely a ways off from operating botnets and siphoning massive funds from corporations, Rebhan said, noting the FBI is probably using “cyber crime” in a broader sense. However, criminal groups are becoming increasingly savvy and embracing advanced technology to enhance operations, according to the FBI.

Gangs are using social networking like Facebook, YouTube andTwitter to recruit new members and communicate globally and more discreetly without the proximity once needed for communication. “The proliferation of social networking websites has made gang activity more prevalent and lethal—moving gangs from the streets into cyber space,” the FBI said.

Many also use the Internet to carry out crimes such as computer hacking, cyber attacks and phishing schemes, which are used to illegally acquire personal information such as usernames, passwords and credit card information. But besides the attractive profits, gangs are also finding the web more enticing because of the less-stringent punishment faced by cyber criminals, at least compared with robbery and murder. Where a robbery can lead to a seven-year sentence, counterfeiting or identity fraud using the web could lead to just a few months of jail time, Rebhan said.

Of course, there are some exceptions, including Tien Truong Nguyen, who was sentenced last year to more than 12 years in prison for his role in a phishing scam that impacted more than 38,000 victims, and Albert Gonzalez, who was sentenced to 20 years for the Heartland Payment Systems (HPY) data breach. But for the most part, catching and punishing cyber criminals takes a certain skill set that many in law enforcement and judiciaries just don’t have yet, the experts say. Because of that, white-collar crime is slated to grow among street gangs.“There’s no formal education given to the judiciary on cyber crimes – the jury is perplexed by these crimes and the judge is also – (they) don’t have a clue of bytes, bits or how malware is written,” Rebhan said.

7.3    Organized Crime

Organized Crime has also added white-collar offenses to its repertoire of illegal activities. The federal government passed the Racketeer Influenced and Corrupt Organization (RICO) Act (18 U.S.C.A. § 1961 et seq.), in 1970 to address these types of crimes. RICO is specifically designed to punish criminal activity by business enterprises controlled by organized crime. Racketeering includes a number of discrete criminal offenses, including gambling, bribery, EXTORTION, BANKRUPTCY fraud, Mail Fraud, securities fraud, prostitution, narcotics trafficking, loan sharking, and murder. The punishment for violating RICO’s criminal provisions is extremely harsh. If convicted, a defendant is fined and sentenced to not more than 20 years in prison for each RICO violation. Moreover, the defendant must forfeit any interest, claim against, or property or contractual right over the criminal enterprise, as well as any property that constitutes the racketeering activity or was derived from the racketeering activity. Finally, RICO contains civil provisions that allow a party injured by a RICO defendant to recover damages from the defendant in civil court.

During the late 1990s, a number of corporations manipulated financial information and made improper financial transactions. Accounting firms helped conceal the illegal nature of these actions, which undermined investor confidence in the stock market and corporate governance in general. The corporate scandals that emerged in 2001 involved Enron, WorldCom, and the accounting firm of Arthur Andersen and were of national importance. Congress responded to these elaborate white-collar crimes by enacting the Public Company Accounting Reform and Investor Protection Act, also known as the SARBANES-OXLEY ACT (Pub.L. 107-204, 116 Stat. 745, [2002]) The act increased penalties for the white-collar crimes of mail fraud and wire fraud from a maximum of five years to 20 years in prison. It also directed the UNITED STATES SENTENCING COMMISSION to review and amend its sentencing guidelines regarding white-collar crimes. In addition, the law makes it a crime for corporate officers to falsify financial reports. A conviction could result in a $5 million fine and 10 years in prison. Most importantly, the act created a new crime of securities fraud. A person convicted of this white-collar crime could be sentenced to 25 years in prison.

The Sarbanes-Oxley Act, apart from its substantive provisions, expressed a new recognition of the seriousness of white-collar crime.

7.4    Penalties for White-Collar Crime

The difference in how we respond to white-collar crime and “regular” crime is dramatic. If an individual shot and killed another individual with a hand gun, the death penalty would be considered. What happens when people are killed because a contractor uses substandard building material?

  • Remember the Hyatt House disaster in Kansas City?

As a result of differences in perceptions between white-collar crime and regular crime, the accident in Kansas City was seen as a misfortune while an individual who shoots another individual is seen as a murderer. White-collar criminals almost never go to jail.

  • Former Vice President Spiro Agnew was never sentenced for bribery and tax evasion.
  • President Nixon received a full pardon for his part in the planning of the Watergate burglary, as well as its cover up.
  • Oliver North became a hero while acknowledging that he lied to Congress.
  • Reagan vetoed the Ethics in Government Bill in November 1988. His spokesperson said “it was bad politics, but good government.”
  • Let’s also not forget the 25 deaths that resulted at Hamlet, North Carolina’s Emmett Roe chicken plant. The owners had locked all the exits. The owner, who ordered the doors locked, was sentenced to 19 years and will be paroled in 2 to 6 years.

Incarceration rates dramatize the differential perceptions of white-collar crime compared to other types of crime. According to the American Bar Association (ABA),

  • 91 percent of those convicted of bank robberies go to jail while only 17 percent of those convicted of embezzlement of bank funds go to jail.
  • Only five percent of people suspected of committing white-collar crimes were convicted. Only a small percent of those convicted actually went to jail.  The fact that Oliver North was seen as a hero despite admitting to Congress that he lied about Iran-Contra.
  • When building contractors use substandard material which causes injury and death, fines result rather than jail time. No one went to jail as a result of the Hyatt Disaster in Kansas City.

Such statistics are indeed peculiar given that the average dollar loss that results from street crime is much less than the dollar loss experienced from white-collar crime. In Florida, for example, street crime amounted to $35 per crime while the average loss to white-collar criminal activities was $621,000.

The following two examples demonstrate the costs of white-collar crime, as well as the leniency that white-collar criminals experience from the legal system.



8.1     Chasing White Collar Crime Across the European Union single Market

While law-abiding citizens enjoy numerous benefits from the European single market, white collar criminals see advantages that they can exploit for their own selfish and anti-social behavior. Furthermore, they perceive a low risk of being caught and punished under an elaborate network of different legislative systems, which are easier to dodge than a judicial complex set up for a single nation State.

The Member States of the European Union have identified the fight against financial crime (money-laundering, corruption, euro counterfeiting, counterfeiting of goods, trafficking in high-value goods and serious economic crime) as a top priority. The European Council of Tampere20 was devoted to Justice and Home Affairs issues and it stated, “Money laundering is at the very heart of organized crime. It should be rooted out where ever it occurs. The European Council is determined to ensure that concrete steps are taken to trace, freeze, seize and confiscate the proceeds of crime”.  Several EU Action Plans on the prevention and control of organized crime have asked the Commission and the Member States to develop a multidisciplinary approach towards the phenomenon of corruption.

Money-laundering is at the heart of practically all criminal activity. It has been given strategic priority at European Union (EU) level. A decision was adopted by the EU Council of ministers concerning arrangements for cooperation between financial intelligence units of the member states. The Europol convention was extended to money laundering in general, not just drugs related. A framework decision on money laundering,

dealing with the identification, tracing, freezing and confiscation of criminal assets and the proceeds of crime has also been adopted. The EU member states have signed the protocol to the convention on mutual assistance in criminal matters between the member states. A second anti-money laundering directive was agreed, widening the definition of criminal activity giving rise to money laundering to include all serious crimes, including offences related to terrorism. A framework decision is pending on the execution in the EU of orders freezing property or evidence, the scope of which is to be extended to terrorist-related crimes.

The European Commission is a member of the Financial Action Task Force and participates fully in international bodies such as the OECD and the Council of Europe.22 The Commission has also negotiated on behalf of the EU in respect of the relevant money-laundering provisions of the United Nations Convention on Transnational Organized Crime.

8.2   Europol to White Collar Crime

Europol is the European Law Enforcement Agency which aims at improving the effectiveness and co–operation of the competent authorities in the Member States in preventing and combating terrorism, unlawful drug trafficking and other serious forms of organized crime.

Europol has launched its Threat Assessment 2013 on Environmental Crime in the EU. The report mentions that environmental crime threatens the health of European citizens and those exposed to exported dangerous substances. It also threatens the subsistence of those relying on an unharmed environment in farming or fishing and exploits the EU’s free trade and movement regimes.

In the beginning of October, Europol organized with ENISA a 3rd joint workshop on improving Computer Emergency Response Teams (CERT)-LEA cooperation in the EU. The main aim of this initiative is to get those two communities to work more closely together both at the strategic and operational level and to foster, improve and assist each other in fulfilling their tasks more efficiently.

“No one is beyond reach”

From 12 to 14 November, the European Cybercrime Centre (EC3) hosted the annual Child Sexual Exploitation Experts seminar at Europol, The Hague. The seminar was attended by about 190 representatives of Law Enforcement Authorities, Eurojust, Interpol, the European Commission, the private sector, NGOs and academia.

Cooperation among law enforcement, child protection hotlines, NGOs and the private sector was discussed at the Child Sexual Exploitation Experts seminar which took place on 13 November at Europol, The Hague.

The seminar was co-chaired by the European Cybercrime Centre (EC3) and INHOPE (the International Association of Internet Hotlines).

Still in its first year, the European Cybercrime Centre (EC3) has expanded its training and capacity building with a new course on Open Source IT Forensics which is being currently delivered at the Spanish National Police School in Avila. The forensic focus of this new course compliments the course on combating child sexual exploitation that Focal Point Twins has organized for the last 14 years in Selm (Germany).

A major intercontinental network of card fraudsters has been recently dismantled by cooperating Canadian, French and German police authorities, supported by Europol’s European Cybercrime Centre (EC3). The operation ‘Spyglass’ has so far resulted in the arrest of 29 people. The international criminal group was involved in the sophisticated manipulation of point-of-sale (POS) terminals in shopping centers across Europe and North America.

8.3   UK White Collar Crime- Professional Malpractice

Because white collar crime covers such a broad category    of behaviors it was decided that a sharper focus was   needed. For that reason, professional practice was    chosen. This is also in itself very wide-ranging. It could include, for example, medical negligence, police corruption, solicitor dishonesty, musicians’ breach of copyright, plagiarism, and the misrepresentation of scientific findings.

8.4   Legislative Body of Europe:

Home Office research has estimated that organized crime generates over £20 billion of social and economic harm in the UK each year. This represents not just the cost of  prevention  and insurance, but the cost of the impact of white collar crime  and the costs of the response, such as running the criminal justice system.

The following forms the current legislative framework in the UK:

  1. Money Laundering Regulations 2003: These set out the scope of the regulated sector and the preventive measures that they must take and also the powers of the supervisor for money service businesses and high value dealers;
  2. The Proceeds of Crime Act 2002, as amended by the Serious Organized Crime and Police Act 2005: This set out the principal money laundering offences and reporting obligations; and
  3. The Terrorism Act 2000 in relation to terrorism financing. Sections 327 to 340 of the Proceeds of Crime Act 2002, and all of the Money Laundering Regulations up to 2007, is wide-ranging. Concealment encompasses mere concealment of criminal or terrorist property as well as its disguising, converting, transfer and removal, and includes concealing or disguising its nature, source, location, disposition, movement or ownership or any rights with respect to it . A person may also be punished for arrangement if he enters into or becomes concerned in an arrangement which he knows or suspects facilitates (by whatever means) the acquisition, retention, use or control of criminal property by or on behalf of another person.  This provision is a threat for lawyers and other professionals who act for clients involved in money laundering. Even 40 Money Laundering Regulations 2007: Regulatory Impact Assessment. July 2007 41 UK Proceeds of Crime Act. 2002. Section 327(1) 42 UK Proceeds of Crime Act, 2002. Section 327(3) 43 UK Proceeds of Crime Act, 2002. Section 328(1)12acquisition, use or mere  such as acquisition for proper consideration, etc.

An important fact in the UK legislation was that the lower limit of the value of a suspicious transaction was not provided, making the law even more rigorous and a problem for the persons and institutions who had to disclose. This provision was relaxed by the Amendment of 2005 to allow banks and financial institutions to proceed with low value transactions involving suspected criminal property without requiring specific consent for every transaction.

There were about 200,000 suspicious activity reports made in the year 2006 and about ₤ 165m of assets were recovered in 2005.  45 The large number of reports has been attributed to the wide range of the Act.

The UK is also under the obligation to update its laws with every EU directive. The Money Laundering Regulations 2007 have been issued, implementing the Directive on the Prevention of Money Laundering and Terrorist Financing (2005/60/EC).




9.1 White Collar Criminals

White collar criminals are very smart and they can do their works so smartly that people cannot even trace them. In our society, there are too many white collar criminals around us these day. The most exciting and what we can say, the dangerous thing about them is they do not harm people physically but they can destroy a society so mindfully that one cannot even notice them doing.

9.2 Nature of the Criminals

People of higher social status are those most likely to have white collar occupational positions and such people are more likely to have the opportunity to commit crimes that involve non-physical means. A study suggest that much of what has happened to be white collar crime is committed by the people in the middle rather than upper classes of our society.

Most of those who are prosecuted for crimes like bribery, tax fraud or bank fraud are rather average in their social background and positions.

9.3 Ten Biggest White-Collar Crimes In History and How They Were Unraveled

They may sit behind marble desks, wearing expensive suits, with their ties done up to 11 o’ clock – but that doesn’t mean they won’t steal your cash! Here’s our rundown of the most mind-boggling financial crimes in history.

White collar crime is the sweetest gig on earth. You can strip the earth bare or rob your shareholders blind, and most likely you’ll just have to pay some money, or a small amount of time in a minimum security prison. Worst case scenario you get locked up for decades and your son kills himself. But that’s only if you’re really bad. Maybe it’s not such a great idea after all. These guys didn’t see it that way, and that’s how they made it on this list.

9.3.1 Bernard Madoff

Loot: $65 billion

What He Did

Madoff created what is probably the biggest corporate con in history – essentially a massive ponzi scheme – by encouraging investment from wealthy individuals and companies around the world, and then using further investment rather than profit to payoff existing investors, keeping the difference himself. Initially, he tapped local money pulled in from country clubs and charity dinners on the so-called ‘Jewish circuit’ of wealthy New York Jewish businessman. The former chairman of the NASDAQ stock exchange was held in such high regard, investors actively sought him out to casually plead with him to manage their savings so they could start reaping the steady, solid returns their envied friends were getting. Madoff and his promoters then blazed a trail through Europe, the Middle East and Asia, securing investments as they went.

How He Was Caught:

Although doubts were raised about his scheme as early as 1999, had it not been for the credit crunch, Madoff may well have gone detected much longer. The recession dried up his sources of liquidity and when investors, rattled by the financial crisis and reaching for cash, sought to pull out some $7 billion from the fund, he was forced into giving himself away. As one commentator warned at the time: ‘don’t be surprised if other scams get flushed out in the coming weeks and months as the crisis deepens’. In the end prosecutors estimated the size of the fraud to be $64.8 billion, based on the amounts available in the accounts of Madoff’s 4,800 clients as of November 30, 2008 – the biggest corporate swindle ever.


150 years in jail + ordered to pay restitution of $170 million.

Sources: 1,2,3

9.3.2 Allen Stanford

Loot: $8 billion

What He Did:

In 2006 Stanford became the first American to be knighted by a Commonwealth nation, but only a few years later it emerged that his firm, Stanford International Bank, sold $8 billion worth of so-called ‘certificates of deposit’ to investors, promising improbable and unsubstantiated high returns that never materialized. Furthermore, buyers of these CDs were told their deposits were safe. More than $1 billion of the investments were diverted into personal loans for Stanford, who falsely claimed that SIB’s assets grew from $1.2bn in 2001, to approximately $8.5bn by the end of 2008. According to the charges recently filed against him, approximately $5 billion of SIB’s assets consisted of note on loans to Stanford and grossly overstated interests in what he called his ‘island properties’ (which consisted mainly of $2 billion from an artificial real estate deal in Antigua).

How He Was Caught:

Stanford was caught out when an amateur investor planning to invest in SIB hired Alex Dalmady, a Venezuelan financial analyst, for a second opinion on Stanford’s accounts. Within hours he spotted what he believed was a gaping $50 billion hole in SIB and advised his friend to withdraw his investments. Not content though, Dalmady wrote an article about Stanford’s irregularities which was published by a Venezuelan website called Venepiramides in Spanish, before being circulated around the world in English on a blog called The Devil’s Excrement. Business Week was the first major American publication to pick up the story, on February 11, and within a week charges had been laid in court against Stanford accusing him of orchestrating a massive, ongoing ponzi scheme, and his business was placed in receivership.


Stanford is currently being held in the Joe Corley Detention Center, Texas, where he was recently hospitalised by another inmate. He faces up to 20 years in jail and a hefty fine.

9.3.3. Jérôme Kerviel

Loot: $4.9 billion

What He Did:

Throughout 2007 Jérôme Kerviel, a junior futures trader at French bank Société Générale, appeared to be trading profitably in anticipation of falling market prices. However, Kerviel was in fact exceeding his authority by engaging in unauthorized trades totaling tens of billions of dollars, and much more than the bank’s total market capitalization. Kerviel attempted to conceal the activity by creating losing trades intentionally so as to offset his early gains, and by the beginning of 2008 he had generated over $1 billion in hidden profits. Whenever fake trades were questioned, Kerviel would describe it as a mistake then cancel the trade, after which he would replace that trade with another transaction using a different instrument to avoid detection.

How He Was Caught:

Among the tricks Kerviel used to hide his activities was to send fake e-mails justifying missing trades, as well as stealing his colleagues’ log-in details in order to conduct trades in their names. He was eventually uncovered when the bank could find no trace of him receiving the purported messages in their e-mail archival system, Zantaz. Following the discovery, Société Générale closed out Kerviel’s trading positions over three days of trading beginning January 21, 2008, a period in which the market experienced a large drop in equity indices, leaving the bank with estimated losses of around $5 billion.


Kerviel has been released for the time being and banned from trading, but it was recently announced that he will stand trial for the incident and faces up to 5 years in jail and a hefty fine.

9.3.4  WorldCom

Loot: $3.8 billion

What They Did:

WorldCom CEO, Bernard Ebbers, became wealthy from the rising price of his holdings in the telecommunication company’s stock, however, in 2000 the industry entered a downturn and WorldCom’s aggressive growth strategy suffered a serious setback when it was forced to abandon a proposed merger with Sprint by the US Justice Department. By that time WorldCom’s stock was declining and Ebbers came under increasing pressure from banks to cover the margins on stock he had used to finance his other businesses (timber and yachting, among others). Beginning modestly in 1999, and continuing at an accelerated pace through to 2002, senior executives used fraudulent accounting methods to mask WorldCom’s declining earnings by painting a false picture of financial growth, and therefore keeping the price of its stock artificially high.

How They Were Caught:

In 2002 a small team of internal auditors uncovered the $3.8 billion fraud, and shortly thereafter several WorldCom executives were fired and the SEC launched a formal investigation. It eventually emerged that many billions of losses had been concealed using false accounting practices, and some of the money had been siphoned off for personal use. On July 21, 2002, WorldCom filed for bankruptcy in the largest such filing in US history at the time (since overtaken by the collapse of Lehman Brothers and Washington Mutual in 2008).


Bernard Ebbers – 25 years in jail.

9.3.5.  Nick Leeson

Loot:  $1.4 billion

What He Did:

From 1992, Leeson made unauthorized speculative trades that at first made large profits for Barings from his office in Singapore, earning a bonus of $200,000 on top of his salary of $90,000 that year. However, his luck soon ran out when he used one of Barings’ error accounts (accounts used to correct mistakes made in trading) to hide his losses. Leeson continued to use this account to cover further bad trades, subsequently insisting that he never used the account for his own gain. The beginning of the end occurred on 16 January 1995, when Leeson placed a short straddle on the Singapore and Tokyo stock exchanges, essentially betting that the Japanese stock market would not move significantly overnight. However, the Kobe earthquake hit early in the morning on 17 January, sending Asian markets, and Leeson’s trading positions, into a downfall. Leeson attempted to recoup his losses by making a series of increasingly risky new trades, but these only worsened his position. Eventually, Leeson left a note reading “I’m Sorry” and fled Singapore on 23 February, leaving losses of 1.4 billion, or twice the bank’s available trading capital. After a failed bailout attempt, Barings was declared insolvent on 26 February.

How He Was Caught:

It was fairly obvious something was up when the twice the bank’s trading capital was lost and Barings went bankrupt.


6 and 1/2 years in jail.

9.3.6.     Toshihide Iguchi

Loot: $1.1 billion

What He Did:

Early on in Iguchi’s career he lost a few hundred thousand dollars and was tempted into selling off bonds to pay his losses. Following this he concealed his unauthorized sales from the custody account by falsifying Banker’s Trust account statements to indicate that securities had not been sold. Iguchi is said to have forged more than 30,000 trading slips, among other documents during the fraud. When customers sold off securities Iguchi had, in fact, already sold off on his own behalf, or when customers needed to be paid interest on long-gone securities, Iguchi settled their accounts by selling off yet more securities and changing yet more records. Eventually about $377 million of Daiwa customers securities and about $733 million of Daiwa’s own investment securities had been sold off by Iguchi to cover his own trading losses.

How He Was Caught:

In September of 1995, fearing the damage his losses may cause the bank if inadvertently discovered, Iguchi wrote a confession letter to the president of the bank in Japan, detailing what had transpired. By this time the loss was in excess of $1 billion. Iguchi himself claimed that he concealed this loss to protect his reputation and job, and this desire to maintain face provided the impetus for further unauthorized trading. Daiwa instructed Iguchi to continue concealing the losses, but turned the confession letter over to the federal authorities and Iguchi was arrested at his home. Iguchi later argued in his defense, correctly, that not a single customer of the bank had lost any money.


4 years in jail.

9.3.7.   Enron

Loot: $1 billion +

What They Did:

In just 15 years, Enron grew from nowhere to be America’s 7th largest company, employing 21,000 staff in more than 40 countries. But the firm’s success turned out to have involved an elaborate scam. Through the use of accounting loopholes, special purpose entities and poor financial reporting, senior executives were able to hide billions in debt from failed deals and projects. Among the firm’s crimes were: manipulating the Texas power market, bribing foreign governments to win contracts abroad and manipulating the California energy market.

How They Were Caught:

In 2001 Bethany McLean’s article Is Enron Overpriced? questioned how Enron could maintain its high stock value, which was trading at 55 times its earnings. – she pointed out how analysts and investors did not know exactly how Enron was earning its income. McLean was first drawn to the company’s situation after an analyst suggested she view the company’s 10-K report, where she found ‘strange transactions’, ‘erratic cash flow’, and ‘huge debt’. In July 2001, Enron reported revenues of $50.1 billion, beating analysts’ estimates by 3 cents a share. However, concerns were mounting. In October Enron reported a $638 million third-quarter loss and disclosed a $1.2 billion reduction in the value of shareholders’ stakes, prompting the Securities and Exchange Commission to begin an inquiry into the firm’s accounts. Later that month Enron announced that the SEC inquiry had been upgraded to a formal investigation, and in November was forced to revise its financial statements for the previous five years to account for $586 million in losses. Following this Enron’s accountancy firm, Arthur Andersen, received a federal subpoena and was eventually found guilty of fiddling Enron’s accounts. As the depth of the deception unfolded, investors and creditors retreated, forcing the firm into Chapter 11 bankruptcy.


Rick Causey (Chief Accounting Officer) – 7 and 1/2 years in jail.

Andrew Fastow (Chief Financial Officer) – 6 years in jail.

Jeffrey Skilling (Former Enron CEO) – 24 years in jail.

Kenneth Lay (Former Enron CEO) – died before sentencing.

9.3.8. John Rusnak

Loot:  $691 million

What He Did:

In 1993, Allfirst Bank hired currency trader, John Rusnak, to shift the bank’s forex operations from merely a hedging endeavor to one that would yield profits. Rusnak believed the yen had taken all the damage it could following the bursting of the Japanese bubble and that it would appreciate consistently against the dollar, and was so bullish about this belief that he neglected to hedge his forward contracts. His luck held until a series of policy changes in Asia prompted a long slide in the value of the yen and other Asian currencies. With his unhedged positions facing losses, Rusnak entered false options into the system that made it look like his positions were hedged. While the options kept the bank from discovering the losses, he set about doubling his bets on the rise of the yen. Panicking, Rusnak increased the size of his trades and kept his losses hidden by using options and a higher level forex contract, allowing him to hold off realizing his losses, while still betting more on the yen. His final position was revealed to be a staggering loss of $691 million.

How He Was Caught:

Even though Rusnak’s losses were barely detectable, the spiralling amount of capital that was being sucked into the deception was becoming increasingly obvious and inconvenient for the bank. When Allfirst demanded Rusnak release capital in order to ease its balance sheet of the heavy skew towards the forex market, his scheme was gradually uncovered. Rusnak himself had not taken anything over or above his salary, and he later cooperated fully with the FBI to reveal how he had been able to maneuver around the bank’s loose trading restrictions.


7 and 1/2 years in jail + $1 million fine.

9.3.9   Bayou Hedge Fund

Loot: $300 million

What They Did:

Samuel Israel III and Daniel Marino set up the Bayou group in 1996, taking $300 million in investments and promising a total return of $7.1 billion. Investors were, however, defrauded from the start as the funds were misappropriated for personal use by Israel and Marino. After poor returns in 1998 the pair were forced to lie about the fund’s returns and in order to do so more convincingly, they set up a fake accounting firm, Richmond-Fairfield, to provide misleading audited results. Israel and Marino disguised trading losses from Bayou’s early investors by lying about the fund’s performance and padding the results with infusions of cash from Bayou Securities, a stock-trading subsidiary that racked up heavy commissions from Israel’s frenetic trading.

How They Were Caught:

The scheme collapsed when Seattle-based Silver Creek Capital Management sought to withdraw $53 million in August 2005. According to Marino’s lawyer, Andrew Bowman, Israel told Marino to write a check although Bayou lacked the funds. Marino wrote the check and then penned a six-page confession and suicide note, which was subsequently discovered by an investor, leading investigators to the fraud. Israel’s car was found abandoned on the Bear Mountain Bridge, NY state, on June 10, 2008 with the words ‘Suicide is Painless’ the title of the theme song from the hit TV series, M*A*S*H, written on the hood. Police suspected that this was an attempt by Israel to fake his own death in order to avoid prison. And this was confirmed when he subsequently surrendered himself to police on July 2nd.


Israel – 22 years in jail.

Marino – 20 years in jail.

9.310. Martin Frankel

Loot: $200 million +

What He Did:

In 2004 Martin Frankel was convicted of looting several insurance companies throughout the Midwest of over $200 million (some say anywhere up to $1 billion). Frankel had acquired the companies through a private trust set up to hide his involvement since he had been barred from trading following the detection of a similar scheme carried out years earlier in Ohio. Claiming he was investing the companies’ assets, he instead stole $200 million to pay for a two-house compound in Connecticut and luxury cars to lure women, some of whom he met through ads for sex.

How He was Caught:

As his deception deepened he began scrambling for respectability, attempting to align his companies with the Vatican by offering $50 million to found a St. Francis of Assisi Foundation for the Church. It wasn’t long before his luck ran out though – in 1999, citing irregularities, the State of Mississippi began supervising three of his insurance companies. In an attempt to get away, Frankel converted much of his money – literally millions of dollars – into diamonds, acquired fake papers and bought a private jet before flying to Germany (taking two of his mistresses with him). Arrested in Hamburg, he was accused of using a false passport and smuggling diamonds before being sentenced to three years in jail for these crimes – nothing compared to what he got following his extradition to America in 2004.


16 years in jail.

9.4   Top 5 White Collar Criminals Of All-Time

9.4.1. Bernie Madoff

Bernie Madoff was a Wall Street stockbroker who is credited with the biggest financial fraud in American history. With a “Ponzi Scheme” which would pay investors with other investors money and eventually wind up taking billions away from said investors, Madoff became the most infamous of all white collar criminals pleading guilty to eleven felony counts. He was sentenced to 150 years in prison.

9.4.2. Michael Milken

Michael Milken is a Wall Street financier who is credited as helping create “junk bonds.”

In 1989, Milken was the first person who wasn’t a member of organized crime to be charged with the RICO Act. He was charged with insider trading and racketeering and would plead guilty to six counts of securities and tax violations. He was sentenced to 10 years in prison. After serving two years, Milken would rebound and become the 488th richest man in the world in 2010, with a net worth of $2 billion

9.4.3. Kenneth Lay

Kenneth Lay was the CEO of Enron, a natural gas company in Houston. He was also friends with both former president George W. Bush and GOP operative Dick Cheney. As his company was on its way to bankruptcy, Lay would sell $300 million worth of his own stock while encouraging employees to buy stock. Lay would be convicted of conspiracy and fraud and would be sentenced to six years in jail. He died before he could even finish his sentence.

9.4.4. Jack Abramoff

Jack Abramoff was a college Republican turned lobbyist who would wind up up being at the center of one of the biggest political corruption scandals in U.S. history.

Abramoff had access to the Bush administration and several other top Republicans and was a very powerful lobbyist. He would be convicted of defrauding Native American tribe. Abramoff plead guilty to conspiracy, honest services fraud, and tax evasion and was sentenced to six years in prison. He would also cooperate with authorities in bribery investigations on members of the Bush administration.

As the world’s eyes turn to Wall Street as a source of financial distress, maybe its time to look at the corporate criminals who have decimated our financial system. White collar or corporate criminals have ripped off the public for billions of dollars and helped destabilize our economy.

Here are five corporate criminals who have achieved notoriety through their dirty dealings.

9.4.5. Dennis Kozlowski

Dennis Kozlowski, the former CEO of Tyco International, is currently in jail for receiving illegal bonuses from his company while shareholders were being defrauded. Kozlowski would be charged with stealing more than $150 million from the company along with chief financial officer at the time, Mark H. Swartz.

Kozlowski would famously throw lavish parties on the company’s dime, including one with vodka spewing out of the penises of statues.




Clearly a double standard exists between white-collar crimes and street crimes. The following are some reasons that explain why white-collar criminals are not more rigorously pursued.

10.1    The Best Lawyers

White-collar criminals have money and can therefore afford the best legal advice. The White Collar Practice offers clients around the world first-rate skills in dealing with government investigations and enforcement matters. Our lawyers have substantial experience defending clients through all phases of investigations as well as criminal and civil enforcement proceedings. These capabilities are enhanced by the resources of a preeminent international law firm, including local law proficiency and familiarity with local enforcement authorities in major business centers around the world. Clients include large corporations, banks, and other institutions, as well as individuals prominent in business and political affairs.

10.2    Defect of Laws

Laws are generally written in favor of the white-collar criminal. People who commit white-collar crimes are sometimes the same people who are in a position to see to it that their crimes are not defined too negatively. The White Collar group serves clients around the world in civil and criminal matters. The common element is the involvement of a government agency engaged in fact-gathering or enforcement proceedings. The group is prepared to defend the interests of domestic and international clients, offering them immediate access to high-caliber legal counsel with substantial experience in complex as well as controversial matters. These include financial fraud, public and private corruption, money-laundering, securities fraud, environmental, tax and antitrust cases.

10.3     Individual Perception

Whereas the impact of white-collar criminals on the nation is great, the cost to each individual is small. White-collar crimes do not impact individuals with the same intensity as when one individual is victimized by a petty criminal.

10.4    little police to investigation and enquiries

Virtually no police effort goes into fighting white-collar crime. Enforcement is many times put in the hands of government agencies (like the Environmental Protection Agency – EPA). Often these agencies can act only as watchdogs and point the finger when an abuse is discovered. The White Collar group also has substantial experience in conducting domestic and international investigations, including inquiries into suspect internal operations, investigations in support of due diligence projects, and fact-gathering for affirmative claims or litigation. Our experience includes investigations for corporate clients in the United States, Europe, the Middle East and Asia. The experience and background of our attorneys provides a basis for knowledgeable consultation on such sensitive issues as corrective actions and the advisability of voluntary disclosures. Our array of national contacts with recognized knowledgeable professionals and investigators in various fields allows us to call upon outside resources where necessary in a most cost-effective and efficient manner. The credibility of the Group’s senior leadership adds significant value to the product of this work.

While few laws are enforced 100%, white collar crime has a much lower margin of non-enforcement. Fraud and other white collar crime is not a priority for police departments. They are required to devote their resources to crimes of violence and, due to lack of trained personnel and financial resources, are not always able to investigate and prosecute suspected fraud and other white collar crime cases.

10.5      Difficult to Assign Blame

Assigning blame in white-collar crime cases can be difficult. For example, pollution may be the result of corporate neglect, but corporation cannot be sent to jail. Corporations could be heavily fined (a viable option), but the social impact of severely punishing an institution that may provide jobs to hundreds of people, as well as supply social necessities, may be more detrimental than the initial violation of the law.

10.6    Jurisdictional Limitations

The FTC has significant powers and resources to stop fraudulent practices, such as the ability to obtain injunctions and asset freezes which enable them to stop fraudulent conduct soon after they obtain evidence of it, to preserve wrongfully obtained assets, and to provide redress to as many aggrieved consumers as possible.

However, while their authority exists before U.S. judges, it does not extend to foreign courts. Canadian telemarketers are aware of these jurisdictional limitations and take advantage of them.

While the FTC has obtained personal jurisdiction over Canadian defendants in U.S. courts because of their transactions in the U.S., so long as defendants and their assets remain in Canada, preliminary and permanent injunctions issued by U.S. courts cannot reach them to halt their conduct.

Moreover, if the FTC obtains a judgment for consumer redress, enforcement of that judgment across borders is difficult at best because asset freezes reach only property held in or controlled by someone in the United States. Accordingly, faced with a typical FTC action, Canadian defendants can often continue to operate their deceptive businesses in Canada, defrauding U.S. residents and dissipating assets.

In the scenario where the Vermont Attorney General wanted to put an end to Canadian telemarketers ripping off seniors in Vermont he had to devote considerable time to a series of cases which he hope to prosecute in conjunction with the U.S. Attorney’s Office, District of Vermont.

These cases represented approximately 15 Canadian telemarketing scams that used a Vermont mail receipt service and a Vermont address when defrauding customers, both in Vermont and around the country.

Under the direction of an Assistant United States Attorney the FBI and United States Postal Inspection Service spent over six months gathering subpoenaed financial records related to the various scams.

They are expected to take over 200 hours of prosecutor time to prepare a prosecution analysis report which will be used to further focus their investigation, the next phase of which would likely involve writing a series of Mutual Legal Assistance Treaty (MLAT) requests for searches in Canada.

From there they will need to write more MLAT’s for arrest warrants and then begin the grand jury phase, and hopefully, begin the extradition process from Canada.

Unfortunately, the International Affairs Office at the U. S. Department of Justice is severely backlogged with MLAT requests, to the point where they urge state investigators and prosecutors to develop and utilize all possible informal investigative channels. This usually means having contacts in other jurisdictions, or in these cases, in another country, that one can call and ask for investigative information in an informal manner that is outside the MLAT process. The only way to have contacts in Canada, though, is to work to develop them. This takes visits, time, and reciprocity.

10.7   Societal Trends

There are basic social rules, such as the “golden rule”, that we live our day to day lives by, that keep us from hurting or depriving each other. The social norms, morals, and values that define what is right or wrong are lacking in these individuals. As a result, an uninformed public is increasingly falling prey to older, wiser, and technically inclined criminals seeking financial gain at little risk of legal consequences.

There are a number of societal trends having a direct impact on the escalation of white collar crime.

  1. Technological advances allow for new types of crimes to be committed.
  2. Aging criminals are now committing frauds against aging victims.
  3. The perceived seriousness of fraud within the justice system is lessened as an emphasis is placed on violent crimes.
  4. Fiscal pressures on organizations and government sectors have resulted in the elimination of public fraud prevention programs.
  5. Human and financial resources of police agencies are insufficient to deal with the escalating volume of fraud-related complaints.

The benefits of a common integrated database can include standardization of information capture and exchange at the detailed occurrence/records management level, aiding the efforts of all that fight fraud in the law enforcement, regulatory and criminal justice communities.

10.8    Why Don’t White-Collar Criminals Go To Jail?

Clearly a double standard exists between white-collar crimes and street crimes. The following are some reasons that explain why white-collar criminals are not more rigorously pursued.

  1. The Best Lawyers

White-collar criminals have money and can therefore afford the best legal advice.

  1. Favorable Laws

Laws are generally written in favor of the white-collar criminal. People who commit white-collar crimes are sometimes the same people who are in a position to see to it that their crimes are not defined too negatively.

  1. Individual Perception

Whereas the impact of white-collar criminals on the nation is great, the cost to each individual is small. White-collar crimes do not impact individuals with the same intensity as when one individual is victimized by a petty criminal.

  1. Little Police Effort

Virtually no police effort goes into fighting white-collar crime. Enforcement is many times put in the hands of government agencies (like the Environmental Protection Agency – EPA). Often these agencies can act only as watchdogs and point the finger when an abuse is discovered.

  1. Difficult to Assign Blame

Assigning blame in white-collar crime cases can be difficult. For example, pollution may be the result of corporate neglect, but corporation cannot be sent to jail. Corporations could be heavily fined (a viable option), but the social impact of severely punishing an institution that may provide jobs to hundreds of people, as well as supply social necessities, may be more detrimental than the initial violation of the law.



11.1 Understanding the Hallmark Sonali Bank Loan Scandal ,January 2013

The Hallmark-Sonali Bank loan scandal.

As with other hot topics, important information is scattered across a variety of different articles and sources. This report seeks to provide readers with “all that they really need to know” about the scandal. The analysis tries to provide clear, simple answer to the following questions:

  • What happened?
  • How did it happen?
  • Why wasn’t the malpractice prevented or discovered sooner?
  • What has been the fall out?
  • What is next?

What happened?

In May 2012, a report from the Bangladesh Bank revealed that the Ruposhi Bangla Hotel Branch of the state – owned Sonali Bank, Bangladesh’s largest commercial bank, illegally distributed Tk 36.48 billion (US$460 million) in loans between 2010 and 2012. The largest share, of Tk 26.86 billion (US$340 million), went to the now infamous Hallmark Group. While the focus has understandably been on Hallmark, other companies also participated in the fraud, including:

  • T and Brothers, Tk 6.10 billlion
  • Paragon Group, Tk 1.47 billion
  • Nakshi Knit, Tk 660 million
  • DN Sports, Tk 330 million
  • Khanjahan Ali, Tk 50 million

This is considered to be the country’s largest banking scandal. It dwarfs previous fraud cases, such as a Tk 6.2 billion Letter of Credit fraud in Chittagong in 2007, a Tk 5.96 billion fraudulent withdrawal from Oriental Bank in 2006, and a Tk 3 billion forgery scandal in 20

How did it happen?

It is alleged that the scandal resulted from collusion between officials of Hallmark and Sonali Bank, in particular between Tanvir Mahmud, Managing Director of Hallmark Group, and

Azuzur Rahman, Manager of Sonali Bank’s Ruposhi Bangla branch. The alleged scam exploited the Letter of Credit (LC) 2 system of financing trade.

1The Letter of Credit system is an important tool that addresses two problems:

  • First, garment producers are often unable to pay for their inputs, such as the textile

fabric that they need for making garments, until after they have produced and sold their

final products.

  • Second, even when garments producers can pay on time, textile companies might be anxious about delivering fabric without some guarantee of payment.

The solution to these problems is a Letter of Credit (LC). At the behest of a garments producer, a

bank provides a fabric supplier with a LC that guarantees payment either at the time of delivery or at some later date. As shown in the figure below, Hallmark is accused of establishing fictitious

companies, such as Anwara Spinning Mills, Max Spinning Mills, Star Spinning Mills, which were shown as recipients of the LCs. These companies submitted falsified paperwork reporting deliveries of fabric to Hallmark, which were then paid for by the LCs from Sonali Bank’s Ruposhi Bangla branch. Because the fictitious companies and Hallmark had their accounts at the Ruposhi Bangla branch, on paper it looked like the branch’s assets and liabilities were balanced out.Another financial practice, known as Inland Bill Purchases, was then used to spread some of the bad loans throughout the banking system. Because the still outstanding LCs were guaranteed by Sonali Bank, the fictitious textile companies were able to sell the LCs to other banks before maturity at a discounted price. As such, portions of the bad loans were passed on to twenty-seven other banks.

Why wasn’t the malpractice prevented or discovered sooner ?

The first line of defense to detect the scam should have been internal audits at Sonali Bank and  supervision by Sonali Bank’s top management. Most experts and commentators have concluded that for a fraud of this scale to occur, the bank’s top management must have been involved in a cover-up. Early media reports based on the account of a Sonali Bank alleged Sonali Bank’s Deputy Managing Director made extensive efforts to block audits of the Ruposhi Bangla branch, and eventually transferred the persistent auditors to a branch outside Dhaka. Aprobe by a parliamentary committee noted that the Ruposhi Bangla branch was certified as a “low-risk” branch by the inspection and audit team of the bank despite violations of financial   rules between 2007 and 2011.

In fact, an audit wing report went so far as to assert that the accused manager of the branch was “managing the branch efficiently with his extraordinary talent, foresight, and banking knowledge.”

The second line of defense should have been the bank’s board of directors, whose members claim to have had no knowledge of the malfeasance. External bankers and experts have also regarded this claim with some skepticism, since the board of directors of a state-owned bank should be involved in approving major loan decisions and reviewing audit findings.

The board had constituted an Audit Committee and an Asset Liability Management Committee precisely for these reasons. Yet, the board failed to notice several red flags, including:

  • The loans to Hallmark exceeded by a large margin the cap that limits how much Sonali Bank

can lend to any single client.

  • Hallmark lacked the collateral to justify such large loans.
  • The Ruposhi Bangla branch exceeded its loan quota by almost 500%.

The third line of defense was the country’s regulatory agencies. While private banks are entirely regulated by the Bangladesh Bank (central bank), state-owned banks are additionally overseen by the Ministry of Finance, which appoints the banks’ board of directors and bank leadership.

Not only did the ministry fail to provide proper oversight, it rejected calls from Bangladesh Bank to reconstitute Sonali Bank’s board following the detection of irregularities. Furthermore, the Finance Minister initially attempted to dismiss the scandal as an inconsequential amount of money, a statement that he later retracted following considerable public criticism.

Observers worry that the root of the problem may be the preponderance of political influence in state-owned banks, which are not fully under the purview of the more independent Bangladesh Bank.

The lack of political independence has fueled speculation about the role of the Prime Minister’s Health Advisor Dr. Modasser Ali, whose interactions with both the branch manager and Tanvir Mahmud might have just been a case of being “in the wrong place at the wrong time” or evidence of a role in the fraud.

While the Bangladesh Bank does not have full regulatory authority over state-owned banks, it has also not escaped criticism. Critics say Bangladesh Bank should have been more proactive in responding to the irregularities detected in the central bank’s own audits of Sonali Bank.

What has been the fall out?

Investigations: The primary investigation has been led by the Anti-Corruption Commission, which filed 11 cases against 27 Sonali and Hallmark officials in October 2012 and another 26 cases against 35 officials (including some of the same individuals) in December 2012.

Among the accused are all the heads of companies that benefited from the loan scam, including Tanvir Mahmud of Hallmark, who has confessed and is cooperating with the authorities. As of this writing, 19 Sonali Bank officials have been charged, includingthe former managing director, two deputy managing directors, the general manager, and the leadership of the Ruposhi Bangla branch, including the branch head Azizur Rahman. Several of the accused, including Tanvir Mahmud, are currently in jail awaiting trial, while others are yet to be arrested.

Recovery : One major concern is recovery of the lost money, which, to put the amount in perspective, is equivalent to 17% of the government’s education budget.

According to the findings of a parliamentary committee probe, of the Tk 26.86 billion loaned to Hallmark, only about Tk 4 billion was actually invested and the remaining amount could not be traced.

(This is the case despite early claims by Tanvir Mahmud that he had assets to cover the amount borrowed twenty times over.) Sonali Bank now confronts serious financial and leadership challenges. It had to cancel a Tk.800 million loan in Fall due to financial shortfalls, and it has had to borrow heavily from other banks to stay afloat.

The banking industry: It is difficult to determine the effect on the industry given preexisting

problems. For example, non-performing loans in the banking system as of September 2012 were already at a high 8.75% of total outstanding loans, and interest rates were up to 19%.

Government borrowing had already created a liquidity crisis, with state-owned commercial banks only distributing 37% of their targets to small and medium sized enterprises.

Nonetheless, the incident has clearly undermined the public’s trust in banks and trust between banks. There has been particular frustration from small and medium business owners, who are frequently denied access to credit.

What’s next?

The Anti-Corruption Commission’s investigations are ongoing and court cases will be held this year. Perhaps more importantly, banking experts hope that the incident will bring about much needed reforms in the banking sector. In particular, the incident has led to renewed calls for-

  • Steps to remove political influence from the banking Sector.
  • Changes to the way that board members and bank leadership are appointed.
  • Upgraded automation and management information systems.
  • Improved internal control mechanisms and the development of a comprehensive risk

management strategy within all banks.

  • And the creation of a fully independent Bangladesh Bank with full regulatory authority over all of the nation’s banks.

However these white collar crimes have a massive impact over the society. It encourages the blue collar crime and crime top to bottom in an institution. Corruption has many meanings, in Bangladesh it properly stands for the meaning of “the misuse of public power for private profit”, associated with this there are some corruption which done by the higher class for their own benefits. For example, the officers in the governmental public service who are known as elite group take the ghoosh or bribe from the clients for the patronage or persuasion known as tadbir .As these corruption are the violation of law and social values, these are taken as the crime by the higher class people. A report taken from TIB 2010 shows that the higher class officers are the most corrupted in the governmental body than from the lower class officials.

Table 1: Number of Reported Cases by Level of Official

Source: TIB report 2010


In recent time, we can see ,there are some very vital issues which are attached  to our countries development is hampered because of this white collar crime.

     The share market of our country is very highly damaged and there are 33 lakh share holders and small investors has lost their everything because of some serious white collar crime.

     The another valuable matter that is another attack to our countries development system is, the WORLD BANK has stopped their fund for making the PADMA BRIDGE.They had stopped to fund for the bridge because they think that our COMMUNICATION MINISTER(ABUL HOSSAIN) is a corrupted and dishonest person.They have told us to prove our minister that his ministry is not corrupted and he,himself is a fresh man.Without proving it ,we will not receive the fund.It is anotner attack to our development progress and it is a matter of WHITE COLLAR CRIME.



12.1    Findings

There is a tendency to show that lower classes are more likely to commit crime. This misleading idea overlooked the crime of upper class. But the crime and corruption of upper class is very common phenomenon all over the world. White collar criminality developed in 1939 by E.H Sutherland. He challenged the idea and argued that, the upper class committed crime by abusing their position for self interest. Sutherland identified them as White collar criminality and argued these crimes has more severe affect over society and it is also difficult to punish such criminals due to their influence over the judiciary.

Bangladesh is not the out of victim of white collar crime, rather this type of crime lead the country into a higher corrupted country in the world from 2001 to 2005 correspondingly. Here the politicians who hold the power are mostly criminalized and corrupted. The higher educated people who sit in the higher position of the governmental body commit different types of corruption. The business groups take the chance and they also encourage the officers and politicians to engage in corruption for their own shake. The professions of humanity such as –Doctor, Engineer, Lawyer, NGO holder, teachers are not out of this. That doesn’t mean that the all people in the high class are corrupted and criminalized but the number of good people are very few.

12.2    Recommendations

     Government should take steps to prevent white collar crime.

     The television as well as other media must aware people about these crimes.

     The leading Daily Newspapers should publish more articles regarding this term white collar crime.

     Making aware public about white collar crime.

     Should establish special law to eradicate white collar crime.

     Should give punishment strictly.

     Every person should become honest in his or her profession

     National Crime Commission should be established.

     Accountability of Govt. service.

     Separate tribunals should be established.

     New chapter regarding white collar crime should be incorporated In the penal court including extemporary punishment.

     From childhood, we should teach our children about these crimes to grow awareness.

12.3     Conclusion

White collar crime is a serious type of crime and a serious threat to the development of any society and country. We all should come forward and take necessary steps to remove this crime from our society. It will not so easy to remove it but if we can aware our general people about it then it will not take any longer. We all have to try our best to remove this serious threat and work for the development for our country. Though political leaders are also involved in this type of crime, the government along with the opposition party and also along with the people, should come forward and take necessary decisions to reduce and try to remove this serious crime from our society for the betterment of the development of our country. These types of crime can destroy any country so seriously and without being noticed. The country which holds more white collar criminals, and in the society in which there are more white collar crimes happening, that society will never be developed. It will gradually be destroyed and ruined. So, we should always be careful about these crimes and we have to make ourselves aware that we will never help anybody doing such crime and we must prevent others from doing such crimes.