Some falsely believe that White Collar-Crime is a victimless crime. In fact, white collar-crime is synonymous with the full range of frauds committed by business and government professionals. These crimes are characterized by deceit, concealment, or violation of trust. The white collar-crimes are not dependent on the application or threat of physical force or violence. The motivation behind these crimes is always financial — to obtain or avoid losing money, property, or services or to secure a personal or
business advantage.
The ambiguity arises when we are told that these crimes does not pose physical threat or violence against person or property. But, a single scam can destroy a company, devastate families by wiping out their life savings, or cost investors billions of rupees or even all three. Now-a-days fraud schemes are turning more sophisticated than ever, and law enforcement agencies across the world are using their skills to track down the culprits and stop scams before they start. Unfortunately, we are still clueless in this regard. We have a tendency to react, rather adopting proactive approach to fight criminal activity. We are training our officers how to solute and carry guns. We are not inclined to recruit professionals across different fields including, software engineers, fraud investigators, forensic science technicians, computer forensic investigators, blood spatter analyst, etc. Besides, there is a need to enhance the capacity of micro-level law enforcement officers as they play a crucial role in the investigation of any case.
The white collar-crime work integrates the analysis of intelligence with its investigations of criminal activities such as public corruption, money laundering, corporate fraud, securities and commodities fraud, financial institutions fraud, bank fraud and embezzlement, fraud against the government, election law violations and mass marketing fraud etc. There is a need to focus on complex investigations — often with a nexus of organized crime activities — that are international, national, or regional in scope. The law enforcement agencies have to acquire unique expertise or capabilities that increase the likelihood of successful investigations. The investigators have to work closely with partner law enforcement and regulatory agencies such as the Security and Exchange Commission, the FBR, Health Ministry, Customs, Provincial Excise and Anti-Narcotics for targeting sophisticated, multi-layered fraud cases that harm the economy.
The frauds mentioned in the preceding paragraph require particular expertise in each of the category. For example, the corporate crime has the potential to cause significant financial losses to investors, corporate fraud can cause immeasurable damage to economy and investor’s confidence. The investigators have to focus their efforts on cases involving accounting schemes, self-dealing by corporate executives, and obstruction of justice. The objectives could be achieved by including the specialists of the field into the law enforcement units. The regular police will remain unable to bring measures to combat white collar-crimes like, Corporate Fraud, Money Laundering and Securities and Commodities Fraud, blackmailing and counterfeiting, embezzlement, extortion and forgery.
If we try to dissect the nature of white collar-crime, we came to know that each type of these crimes have different dynamics and peculiar expertise. The process will also disclose that to what extent we lack the ability to counter the situation. The majority of corporate frauds involve schemes designed to deceive not only investors but to auditors and analyst as well. This is done to conceal the true financial condition of a corporation or business entities through manipulation of financial data, the share price, or other valuation measurements of a corporation, financial performance. While money laundering is the process by which criminals conceal or disguise their proceeds and make them appear to have come from legitimate sources. It allows criminals to hide and accumulate wealth, avoid prosecution, evade taxes, increase profits through reinvestment, and fund further criminal activity. But, many define money laundering simply as turning “dirty” money into “clean” money. In fact, money laundering undermines the integrity and stability of financial institutions and systems by discouraging foreign investment and can distort international capital flows. The process can be monitored by targeting professional money launderers, key facilitators, gatekeepers and complicit financial institutions. By keeping an eye on the methods in use by the criminals of money laundering like complex financial crimes, human trafficking, international and domestic public corruption, narcotics trafficking and terrorism.
The explanation of white collar-crimes would definitely help to understand that our law enforcement agencies are lacking sufficient tools to combat these types of crimes both in capacity and in professionalism. Only two examples would elaborate the point. The money laundering process consist of three steps — placement, layering, and integration. Placement represents the initial entry of the criminal’s proceeds into the financial system. Layering is the most complex and often entails the international movement of funds. Layering separates the criminal’s proceeds from their original source and creates a complex audit trail through a series of financial transactions. And integration occurs when the criminal’s proceeds are returned to the criminal from what appear to be legitimate sources. While the Securities and Commodities Fraud is another form of white collar-crime. The continuing integration of global capital markets has created unprecedented opportunities for the businesses to access capital and investors to diversify their portfolios. Whether through individual brokerage accounts or savings plans, more and more people are choosing to invest in the securities and commodities markets. This growth has led to a corresponding rise in the amount of fraud and misconduct seen in these markets. The creation of complex investment vehicles and the tremendous increase in the amount of money being invested have created greater opportunities for individuals and businesses to perpetrate fraudulent investment schemes.
Normally, white collar-crime investigative activities are reactive in nature. They are principally stimulated by victim complaints or occasionally by informants or violation targeting programs implemented by the law enforcement agencies. The intelligence process can act as a stimulant to such investigations, and in addition provide output which will effectively guide investigations results. If the intelligence process is effectively implemented as a component of overall white-collar crime enforcement activities, it should result in a reduction of expensive investigative and prosecutorial time, while not decreasing the overall effectiveness of the effort.
Police have to form partnerships with numerous agencies to capitalize on their experiences in specific areas such as securities, taxes, energy and commodities as it is obvious that the kind of knowledge and training required to implement strategies needed investigate white collar-crime is lacked by them. The majority of investigation is conducted by the micro-level officers. It is difficult for them to understand the complexity of trade policy, accounts and to unearth the layering process adopted to conceal the facts as they are generally trained to fight the criminal cases. They never possess the higher education nor they are encouraged to train themselves to understand the complexity of white collar-crimes. There is still a lot of emphasis on the physical training. The agencies have no room for the people of higher caliber or have never introduced a window of opportunity for highly skilled professionals like, chartered accountants, forensic experts, computer programmers, pathologists, criminal profilers etc. In white collar-crimes the initial investigation must be conducted by the highly qualified investigators otherwise the process would run on a wrong track signifying nothing.
The writer can be reached at [email protected]