This article is written by Shivangi Agrawal, pursuing a Certificate Course in Advanced Criminal Litigation & Trial Advocacy from LawSikho.

Introduction

There has been much debate about the existing disparities between white-collar crime and street crimes. Let us first understand what is white collar crime and street crime.

White collar crime means fraudulent activities done by public officials, business tycoons, individuals who lure people for personal beneficial gains. For instance, mismanagement of public funds, Ponzi scams, embezzlement of money, money laundering, illicit trading of drugs, etc. Some well-known cases are Saradha Chit Fund Scam, Vijay Mallya scandal, Harshad Mehta Scam, etc. Such activities are often characterised by deceit, fraud, cheating and breach of trust. Noticeably, these characteristics also find their place in street crimes. 

Street crimes are understood as the crimes committed in public or private spaces. Examples include murder, robbery, larceny, rape, etc. If we compare, street crimes are also financially motivated in a large number of incidents and cause physical and mental harm to the society. Two heads that characterize street crime are emotional factor and physical harm. Often, the street crimes are committed against known people or relatives after property disputes, disagreements on marriage, feeling of revenge, etc. resulting in emotional disbalance amidst the family and society whereas the white-collar crimes may result in emotional hurt but on an individual level. Next, the physical harm; does not find its place in white-collar crimes whereas offences of assault, robbery, murder are often associated with physical injury.

Though white-collar crimes are identified as victimless crimes, it’s not actually as such. In fact, large mass is targeted in white-collar crimes and resultantly, there would be more victims. It undermines the socio-political system of the country. It also adds financial burdens on the victims leaving them in the state of disparity which they are unable to overcome for their lives or generations. Hence, both white collar crimes and street crimes are equated by the consequences and effect such activities have on society. Identity theft (Personation) often placed under the category of street crime can also be counted into white-collar crime, as it affects many lives.

Concept

The term ‘white collar crime’ was coined by Edwin Sutherland in 1939. Few decades back, when white-collar crime evolved, people were not aware about the seriousness of the crimes. White-collar crimes were often seen to be associated with high-class people, though today it is same but the comparative number of innocent people associated was very less. Thus, the legal sanction for white-collar crime was minimal. 

Whereas India does not have proper law to govern white collar crimes, it cannot be anticipated as to what is minimum or maximum punishment prescribed for such crimes. But still if we look through, Prevention of Money Laundering Act (PMLA) prescribes punishment for 3-7 years, Narcotics and Psychotropic Substance Act (NDPS) prescribes punishment for 10 years (exception death penalty under section 31-A, that too after previous conviction) whereas street crimes invites much stricter punishments for dacoity, rape ranging from Rigorous imprisonment of 10 years to life imprisonment and death sentence.

On the other hand, countries like the US have well-defined legislations that have also attracted controversies. For example, Paul Manfort who worked for former President Trump as Chairman of his campaign team was sentenced for 47 months for frauding Internal Revenue Services of millions of dollars. Perhaps the sentence is too short compared to the seriousness of the crime that led to loss of millions of US public funds. 

What can be conceived from the sentencing norms that street crimes are often viewed as highly motivated to harm society while white collar crimes that result in loss to large collective group of investors who bestow their trust on political luminaries or big tycoons is not much hyped and thus underrated. Also, another factor for imposing harsh punishments for street crimes may be the violence which it endures. But, the result of both set of crimes is same. Whether an individual or group of individuals loots a bank on gunpoint or an official or a Company misappropriated millions of rupees, it’s the same. 

Interestingly, the criminal justice system does not share or inherit the same principle. The criminal justice system is not victim-oriented, it often focuses on the ‘innocence of the accused’. This approach tilts towards the accused resulting in inappropriate punishments while ignoring the suffering of the victim and the impact on society at farce. 

Reasons

Judges are the sole authority responsible for sentencing criminals. Thus, it much depends on the mindset and attitude of the judge how he perceives a particular situation to be. Pollack and Smith laid down four criteria that determine judge’s conscience:

1. A lack of consistent theory of crime causation and punishment,
2. The expectations of the community in which the Court is located,
3. The characteristics of the sentencing judge that influence his/her behaviour,
4. The pressures of day-to-day operations in the criminal Courts.

For understanding the differential treatment between white-collar and street offenders more clearly, we look into two theories given by Testa: Focal concerns theory and typescript Theory. As Hogarth states, the Sentencing process has essentially been a cognitive process. The individual (judge) reads the facts, information, looks into evidence and organizes it all into relation with others and processes the overall result of the case.

Focal Concerns Theory: It is built around a bounded rationality thesis which claims that judges rarely have full information to enable them to make conscious, rational decisions. It is obvious that in absence of complete facts, the stereotypes are bound to be created. Thus, theory states that in such cases (of lack of information) judges emphasize three focal concerns: blameworthiness, community protection and practical constraints while making decisions.

The deciding authority (judge) finds itself struck between two situations: to protect the public and punish the offender to prevent further crime. More often, judges rely on available information and gravity of offence apparent on face. Obviously, street crimes such as murder, dacoity, and kidnapping would appear on face more harsh characterised by bloodshed, excessive abuse of power (may also be coupled with bloodshed), and kidnapping of child (possible concern be ransom, or bloodshed again) respectively. Comparatively, white-collar crimes rarely have the elements of bloodshed or physical harm. The harm caused is to the large public but what appears on face is less grievous characterised by dominance of mental agony and loss of money. Hence, the difference.

Thus, the author (Testa) came to Hypothesis 1 which I find is relevant to mention here: Net of other factors, embezzlement offenders in comparison to larceny offenders will be punished less severely across all punishment outcomes.

Typescript theory: This theory entails that each individual in a society is characterised by certain ‘type’, i.e. gender, race, caste, class, status, etc. And, this ‘type’ exists in convergence with ‘script’, i.e. some predefined attributes associated with this ‘type’ that need to be observed by people or in other ways, are expected to behave (observe) so. Thus, altogether, it means society expects (views) every individual to perform particular behaviour according to his/her type. Now, under this theory, whiter-collar criminals who are usually big businessman, tycoons, who often exercise political confidence and cordial relations with government do not seem to fit into type ‘criminal’ which is essentially reserved for street-level offenders who is young, poor, male, has low socio-economic status, etc. And, at this point, white-collar criminals constitute what theory calls ‘countertypes’ i.e. opposite to street offenders.

Thus, accordingly the severity of punishment is also going to vary for both the ‘types’. However, theory tends to bring out the subsequent stage of criminal trial, the conscience (understanding) of the judge is bound to change as he delves deeper into and analyses that though street crime at face appear to be grievous but it was a simple process involving less number of victims. Comparatively, white-collar crimes are guided by the greed of rich businessmen often luring large masses of people with millions of rupees. But, at this point, he will be struck with legislation because that prescribes less severe punishment for white-collar criminals (maximum 10 years imprisonment in PMLA, POCA and maximum fine of 3 times the amount lured in FEMA) as compared to street-offenders (death sentence for murder, death or life imprisonment for kidnapping for ransom, life imprisonment or Rigorous imprisonment for 10 years for dacoity).

Thus, the author (Testa) came to Hypothesis 2: Net of other factors, at the early processing stage of pretrial detainment, embezzlement offenders in comparison to larceny offenders will be less likely to receive pretrial detention.

Hypothesis 3: Net of other factors, at the later sentencing stages of embezzlement offenders in comparison to larceny offenders will be punished more severely across all outcomes.

Conclusion and analysis

It can thus be conveniently concluded that more often than not, street crimes are treated harshly as compared to white collar crimes. At this point, it is to be highlighted that the role of two organs of the State responsible for justice delivery- legislative and judiciary is a decisive factor. Though judiciary plays an important role in setting up the precedents but ultimately its hands are confined to what guidelines have been made or laws enacted. Thus, in this case burden rests upon the legislative organ of the State to formulate laws and policies sensibly. The legal framework should be based on apparent evidence and impact the activities have on society at large and not end up being discriminatory. 

Lot has changed since the white collar crime was first introduced. Leniency towards sentencing individuals for white collar crimes would motivate them and while the government is trying to come up with this issue with technological advancements, this leniency can prove to be an adverse factor.

References

• DeAngelis, S., (August 2020), Faculty of Utica College, Sentencing disparities between white-collar crimes and street crimes: Examining WCC sentences and the logical connection of WCC being treated more leniently in the US, https://search.proquest.com/openview/bdba35f56b8ef05ef47917915b86a868/1?pq-origsite=gscholar&cbl=51922&diss=y. 

• Pollack, H., & Smith, A. B. (1983), Judicature, White-collar v. street crime sentencing disparity: How judges see the problem, 67(4), 175-182.
• Testa, A., (2015), University of Marlyland, A Tale of Two Crimes: An analysis of Criminal Sentencing of White-Collar and Street Offenders, https://drum.lib.umd.edu/bitstream/handle/1903/16498/Testa_umd_0117N_15986.pdf?sequence=1&isAllowed=y.
• Gottschalk, P., Rundmo, T., (2014), International Journal of Law, Crime and Justice, Crime: The amount and disparity of sentencing – A comparison of corporate and occupational white collar criminals.

Students of Lawsikho courses regularly produce writing assignments and work on practical exercises as a part of their coursework and develop themselves in real-life practical skill.