Combating White Collar Crimes: Strategies For Prevention, Detection And Response

Prabhat Shukla May 14, 2024

According to data from Interpol and World economic forum, two major areas which have been identified globally and is going to pose a big challenge on white collar crimes in 2024 onwards, one is online digital transactions and other is crypto currency

During the BW Legal World: Top 100+ General Counsel Conclave and Awards 2024, a panel discussion centered on combating white-collar crime brought together a diverse set of speakers who shared valuable insights and perspectives.

C V Raghu, former Group General Counsel, Samvardhana Motherson Group, kicked off the discussion by underlining the importance of preventive measures and robust governance within organisations. He pointed out that companies with stringent governance practices are less susceptible to fraud due to regular audits and heightened vigilance.

He said “White collar crimes are committed by those in authorities, because they have that opportunity and greed Is very universal, but more important here is how to stop it is, firstly we need to have some preventive measures. It is a very well known fact that better governed companies are less prone to these frauds because the governance is not just a word but it is in the spirit of the organisation, I have seen it in banks that at any particular time there are no. of audits that keeps happening, so you are always on your toes and probability of organisation falling to these crimes becomes low."

Sameet Gambhir, VP (Corp. Law) & CS-DCM Shriram shed light on the drivers behind white-collar crimes, citing greed, pressure, and rationalisation. He emphasised the crucial role of general counsels and compliance officers in educating and raising awareness among employees to mitigate such risks effectively.

Gambhir highlights “There are two aspects of these crimes one is definitely greed and other is unawareness and that’s where the role of gc or compliance officers come into play that it is something by which you can be caught. Training and awareness of the employees also plays a significant role in mitigating these unfortunate circumstances to happen. One popular criminologist from U.S. said there are three drivers to a white collar crime one is opportunity, second is pressure as many times it happens that either you are pressure of your bosses or maybe some family issues or medical issues, third and very important aspect he told was rationalisation as many a times culprit start rationalising his deeds by justifying it as any chance or on his skills."

Suresh Kumar Sharma, General Counsel, Deloitte India, took a three-tiered approach to the issue, focusing on stakeholders, organizational principles, and individual morality. He stressed the need for a fair playing field, strict enforcement of principles within organizations, and the internal moral dilemma individuals face.

He expressed “I look at this from three tier prospective, if you look at stakeholders like lawmakers, regulatory authorities, enforcement authorities, the intent has always been to say that let us try and make sure that there is level playing field and fair game that everybody is able to play then comes the organisation where principles should be strictly enforced that if somebody faulters even a little then there is zero tolerance and then you come to the individual level where there is an internal battle between where it solely to your individual morality”.

Manish Lamba, General Counsel, DLF Cyber City Developers, delved into the ethical dimensions of white-collar crimes, drawing parallels to the temptation faced by Adam in the Garden of Eden. He highlighted the significance of ethical decision-making and suggested the development of robust systems to mitigate corporate frauds.

He said “Apart from greed there is one thing called temptation, in the garden of Eden, Adam had that temptation to eat the forbidden fruit, so in the independent India Mudra scam was the first scam and biggest scam till date happened in this country was done by east India company, that company was incorporated in 1600s which ultimately got bankrupted. Now everything boils down to ethics or Dharma, in Mahabharata Dharma was explained very well and it resonates in our day to day life as well where we have to make decisions. As far as corporate frauds are concerned , they’ll keep happening. We had to build a system to mitigate them, it's nothing new it has only changed its avatars”.

Amar Kumar Sundaram, General Counsel, Sr. VP - Legal & Chief Compliance Officer, NEC Corporation India Ltd., rounded off the discussion by highlighting the global challenges posed by white-collar crimes, especially in the realms of digital transactions and cryptocurrency. He underscored the importance of addressing these challenges with updated strategies in light of rapid technological advancements.

He mentioned “According to recent Fbi data U.S. Spends almost 300 billion dollars annually to confront white collar crimes.If you look at data from Interpol and World economic forum, two major areas which have been identified globally and going to pose a big challenge on white collar crimes in 2024 onwards, one is online digital transactions and other is crypto currency. There are two reasons behind authorities being worried about these crimes, one is big data push that is happening now, and second is the rapid technological advancements.”

Overall, the panel discussion provided a comprehensive understanding of the strategies required for preventing, detecting, and responding to white-collar crimes in today's dynamic business landscape.