The psychology of white collar crime: Why do people commit these crimes?


The paper explores the strange world of white-collar crime, focusing on its psychological  foundations and landmark case studies. It also examines the growth of white-collar crime in  India, comparing it to the American context. The affluent commit crimes in an environment  of weak government while frequently avoiding detection because of drawn-out court fights.  These compound crimes, including management, finance, and other areas, flourish within  companies. The Enron scandal and the Bernard Madoff Ponzi scheme are two well-known  instances that offer important insights into the mindset of white-collar criminals. These  examples shed light on elements that motivate people to commit these crimes, including  rationalization, manipulation of trust, and financial demands. The conceptual history of  white-collar crime is explained in the study, and it suggests categorizing some behaviour into  fraud, corruption, and regulatory violations. The paper contributes a deeper understanding of  the psychology driving white-collar crime and highlights the necessity for strong preventive  strategies and legal provisions.  Keywords: psychology, trust manipulation, rationalization, fraud and corruption 


White-collar crimes often involve large, complex companies and are committed by people who have a thorough understanding of a variety of disciplines, including management, engineering, medicine, organizational theory, and information technology. These offenses differ from more typical, street-level crimes in that they need specialized knowledge and abilities within these areas. White-collar criminals use their knowledge to manipulate systems and take advantage of weaknesses for their own gain, frequently in ways that are challenging to catch and prosecute. These transgressions demonstrate how knowledge, power, and unethical behavior connect in the business and professional worlds.[1] In India, the law has long been the governing principle. Such violations regularly occur in a variety of socioeconomic offenses/crimes that frequently receive little public awareness in the country due to non-education and uncontrolled corruption in almost all governmental agencies as a result of chronic failure. Famous criminologist Sutherland defined “white collar crimes” in the framework of American culture, which have a tendency to demoralize the whole criminal scene in India as we know it.

White-collar offenses including tax evasion, bribery, and insider trading frequently result in real harm, but their effects can be complicated and take time to manifest. These acts differ from more overt, street-level crimes in that they include people who have advanced knowledge of finance, management, and other industries and use that expertise to take advantage of moral and legal ambiguities. For instance, tax evasion lowers government income, which has an impact on infrastructure and public services. Bribery taints the decision-making process, resulting in biased laws and perhaps harming the general welfare. Insider trading jeopardizes the reliability of the financial system, harming investors. The moral ambiguity of white-collar crimes is one noticeable characteristic. Criminals may defend or excuse their behavior by claiming that it is standard business practice. Since victims sometimes aren’t aware that they are being abused, identifying them can be difficult. The general population inadvertently pays a price for tax avoidance in the form of lowered services. Bribery victims might not even be aware that their interests have been put at risk. Investors may not be aware that their losses were caused by illegal activity in the instance of insider trading. These elements add to the complexity and elusiveness of white-collar crimes, making them a crucial area of attention for both ethical and legal examination. For effective preventive and enforcement tactics to be developed, it is crucial to comprehend the wide-ranging effects and moral complexities of these crimes.[2] It is well known that some occupations provide an ideal environment for lucrative but frequently undetected illegal activity and unethical behavior. These people may be found in the worlds of business, many professions, and even public life, sneakily acting outside the law. A number of things, including neglect in their childhood, schooling, and the influence of other societal institutions, might be blamed for their propensity for unethical behavior. Furthermore, they frequently turn to these illegal activities due to their insatiable greed, fixation with profit, or desire for quick growth through shortcuts.

These miscreants typically reject integrity and other ethical principles in the pursuit of personal wealth, taking advantage of legal ambiguities to promote their goals. White-collar offenders stand out because of their alleged immunity to the effects of their behavior. They appear impervious to the loss of respect or status that is often associated with illegal action and act with a sense of impunity.[3] This type of criminal activity, referred to as “White Collar Crimes,” largely developed as a result of the competitive economic environment of the mid-20th century.

Today’s criminals see the world as their territory and concentrate their illegal operations in their specialties, whether they be their profession, company, or trade. These people may not have a history of aggressive behavior or come from a criminal past. Instead, they use their advantages in knowledge, resources, and positions to commit crimes. They are known as “white-collar criminals” because they use their inside knowledge to trick systems, commit fraud, or take advantage of legal loopholes. Although less obvious than traditional crimes, such acts can nonetheless do enormous harm, underlining the need for control and vigilance in different spheres of society.[4]


The method of research used by the researcher is doctrinal. The data is collected from articles, journals, and research papers published on various online databases.


The exploration of the psychology behind white-collar crime unveils a multifaceted interplay of individual, situational, and systemic factors that drive individuals to engage in such illicit activities. Scholars delve into psychological theories like the differential association theory, rational choice theory, and the fraud triangle, examining how a blend of personal motivations, societal pressures, opportunity, and perceived justifications converge to propel individuals, often seemingly respectable and affluent, into perpetrating white-collar crimes. Studies scrutinize the role of personality traits, moral reasoning, organizational culture, and environmental cues in shaping the decision-making processes of offenders, shedding light on the complex web of psychological mechanisms underpinning these illicit behaviors, providing insights crucial for prevention, intervention, and policy formulation.



The Deputy Attorney General of the United States noted the significant difficulties in defining this phrase and the lack of consistent or useful characterizations for such occurrences in a speech addressed to professional criminologists more than three decades after the term “white-collar crime” was first used in the field of criminology. This finding is neither novel nor controversial. A deeper look at the various definitions of “white-collar crime” and how they are actually used in academic literature uncovers significant contradictions and differences. It’s still unclear if this phrase refers to the events themselves, the people involved, certain criminal types, or offender profiles. It is unclear if it refers to the social environment of the offending conduct, the perpetrator’s social role or status, the tactics used, or the social ties between the victims and the offenders. There are disagreements over whether the actions must necessarily be ascribed to “white-collar” people, and there is even more considerable disagreement over whether the actions should be considered illegal. The label unquestionably misleads in this sense.[5]

Over the past 50 years, the ideas of “White Collar Crime” and its polar opposite, “organized crime,” have fundamentally changed how criminal activity is defined. The phrase “White Collar Crime” was first used by eminent sociologist Professor Edwin Sutherland. His presentation of this idea posed a serious substantive and procedural threat to fundamental criminal law norms. Sutherland’s emphasis on crimes perpetrated by people of high social position and respectability, generally while carrying out their professional responsibilities, distinguished him from previous conceptions of criminal behavior. This paradigm shift emphasizes the need to widen our knowledge of criminal activity, going beyond the common perception of crime as occurring on the street to include the covert, though sometimes disastrous, behaviors that frequently occur in the boardrooms and offices of powerful people. Sutherland’s defiance of long-standing criminal law norms heralded the beginning of a new age in which the emphasis on social and economic harm brought about by individuals in privileged positions has become a key element of the contemporary legal environment.[6]

Everyone is aware that some careers provide profitable prospects for illegal activity and immoral behavior that seldom garners public notice; there have been dishonest people in business, many professions, and even in public life. Due to their neglect at family, school, and other social institutions where individuals receive instruction for citizenship and character development, they frequently become dishonest. These perverts have little respect for decency and other moral principles. As a result, they engage in illicit activity without consequence and without concern for reputational or social consequences. White collar crime is the term used to describe such crimes. And they are essentially the results of the mid-20th century’s competitive economy.[7]

White-collar crime has several facets since it is so ingrained in cultural norms. It manifests in a variety of permutations and combinations and takes on a wide range of forms, including smuggling, adulteration, tax evasion, fraud, and misappropriation. They take place in upper and middle class-dominated trade, industry, commerce, business, and professions. The effects of such criminality have damaged the state’s and the community’s social and economic infrastructure, making long-term planning and growth challenging. According to scholars, these crimes have been referred to in a variety of ways, including as “white-collar crime” by Sutherland, “public welfare offenses” by Sayre, “regulatory offenses,” “Socio-economic crimes” and “strict liability.” Socio-economic crimes originally appeared throughout the industrial revolution, along with the Renaissance and Reformation periods. As ethical norms and moral values were undermined by people’s fixation with money, crimes such as fraud, misappropriation, corruption, and adulteration within their respective crafts, enterprises, industries, and professions were committed.[8]

The wealthy commit specific types of white-collar crimes that stand out:

  • Their positions being abused for personal advantage in conspiracies.
  • Expanding to include a greater array of “high-tech” and “middle-class” criminal activity.
  • Blurring the distinction between morally acceptable and improper conduct.
  • Judged both internally and outside.
  • Thriving in secrecy and exploiting frameworks of opportunity.
  • Participation in institutional crime.

White-collar crime straddles both normal and abnormal conduct, occupying a distinct place on the deviance spectrum.


The Indian Journal of Integrated Research in Law describes the progression from ethical behavior within a business to white-collar crime as taking place along a sequence of phases. These actions offer insightful information on the mechanics of such criminal activity and how it could develop:

Step 1: It all begins when an individual, originally in a position of trust and responsibility inside the business, starts pondering how to abuse their job for personal benefit.

Step 2: This step indicates the awareness that their authority may be used to generate financial rewards, thus building the groundwork for their immoral path.

Step 3: The offender’s increasing confidence and daring is a result of the existence of powerful coworkers inside the company, who are frequently referred to as “drivers,” who ignore or even support this abuse of authority.

Step 4: As this culture of immoral activity spreads, more apathetic observers join in on the fun, seeing the chances for self-aggrandizement.

Step 5: To further deepen their commitment, more hesitant individuals may be persuaded or forced to participate by their superiors.

Step 6: As unethical behavior becomes increasingly obvious, coworkers or superiors will inevitably start to have suspicions.

Step 7: The offender begins to realize that they may take advantage of those who are in vulnerable positions within the company, broadening the scope of their behavior.

Step 8: To maintain their position of control and silence any possible rivals, the group may now resort to bullying or intimidation.

Step 9: At this point, the person has grown dependent on the illegality of their behavior and is willing to take increasingly dangerous risks in order to feed their greed and support their way of life.

Step 10: As the seriousness of their activities becomes clear, ethical doubts start to surface among the participants, creating internal moral dilemmas.

Step 11: When a whistleblower within the organization decides to make the wrongdoing public, this vital stage begins. The offender could respond by repenting and pleading for pardon or angrily denying their participation in spite of increasing proof.

The development of preventative measures, the promotion of moral corporate cultures, and dealing with the problems at each level can be aided by an understanding of this road to white-collar crime, which can help to discourage such behavior inside firms.[9]


A number of interrelated variables, many of which have cultivated a climate favorable to economic misdeeds, have contributed to the emergence of white-collar crime in India. These elements emphasize the requirement for thorough legal, regulatory, and enforcement mechanism reforms in order to successfully address white-collar crime in the nation.

  1. White-collar crimes are distinguished by their intricacy and the absence of direct, recognizable victims by their hidden nature. It might be difficult to identify the harm produced by a single offender since the effects of these crimes are sometimes distributed over time and among several people. The discovery and prosecution of economic crimes are hampered by this intricacy.
  • Lack of Media Scrutiny: Media frequently has trouble explaining the complexities of economic misdeeds, which results in underreporting and lower public awareness. Media organizations with connections to economic interests could also be less likely to highlight these crimes.
  • Economic crimes Are Relatively New: When compared to more established criminal behaviors, economic crimes are a relatively recent addition to the legal system. Judges, administrators, and the general public do not generally grasp white-collar crimes since these rules and regulations are still being developed.
  • Influence of Offenders and Elusive Nature: A large number of economic offenders hold leadership roles in administrative and political organizations. They frequently have the resources to pay off witnesses or investigators, and they can use their power to stall or stop inquiries.
  • Ineffective Monitoring and Reporting mechanisms: Institutions, including public sector organizations like hospitals and banks, lack effective monitoring and reporting mechanisms, which causes violations to go unnoticed for a long time.

In addition to legislative changes and efficient enforcement, addressing the rise of white-collar crime in India necessitates a change in cultural perceptions regarding the gravity of these violations. To make sure that people who engage in such activities are held accountable for their conduct, it is crucial to have an effective system for monitoring, reporting, and investigating economic crimes.[10]


White-collar crime landmark case studies offer priceless insights into the nature of such offenses, both globally and within the Indian context.Famous cases like the Enron debacle and the Bernard Madoff Ponzi scheme offer deep insights into the psychology and attitude of white-collar offenders. These well-known incidents that occurred in the United States provided insight into the motives, justifications, and techniques used by those who participated in sophisticated financial fraud.

Enron Scandal:  One of the most infamous corporate scams in history, the Enron affair showed how business leaders fabricated financial statements to provide the appearance of sound financial health. The case’s most important lessons center on the temptation of monetary gain, unbridled corporate ambition, and the degradation of moral standards in the name of profit. Enron executives inflated the firm’s stock price by deceptive and dishonest business methods, which ultimately caused the company to fail. This example serves as a reminder of how those in positions of authority can give in to the pressures of avarice and maintaining the illusion of achievement.[11]

Bernard Madoff Ponzi Scheme: The complex web of deceit that one person constructed was made public by Bernard Madoff’s Ponzi scheme. Madoff orchestrated a sophisticated scam, attracting investors with guarantees of steady, high profits. The psychology of manipulation and trust are the primary lessons to be learned from this. While running a fraudulent operation, Madoff took advantage of trust and distorted the investor’s view of his authenticity. This case serves as a reminder of the crucial roles that deception and trust play in white-collar crimes, as well as the terrible repercussions that can result for victims who put their confidence in a dishonest person.

In order to avoid and identify white-collar crimes, both incidents highlight the importance of strict regulatory scrutiny, openness, and moral corporate governance. They emphasize the importance of investor due diligence, caution with regard to returns that look too good to be true, and the requirement for early regulatory involvement. Enron and Madoff instances provide insight into white-collar criminals’ thought processes, which aids in the development of strategies to stop such conduct and shield the financial markets and individual investors from the destructive effects of financial fraud.


  1. Enhanced Regulatory Oversight: It is imperative to put in place and reinforce regulatory frameworks that monitor market activity, business practices, and financial transactions. To discourage prospective white-collar criminals, this entails regular audits, transparency standards, and tougher enforcement of current laws.
  2. Ethical Corporate Governance: In order to stop white-collar crime, it is crucial to cultivate an ethical corporate governance culture. Businesses should place a high value on moral behavior, promote an open and honest culture within the company, and set up channels through which staff members may report unethical behavior without worrying about facing consequences.
  3. Education and Public understanding: It’s critical to raise public understanding of the types of white-collar crimes and their effects. To educate the public about the warning signals of possible financial fraud, the value of doing due diligence, and the necessity of being skeptical about financial schemes that seem too good to be true, educational campaigns, workshops, and seminars can be held.
  4. Whistleblower Protection and Incentives: People working for companies may come forward with information if laws protecting whistleblowers are strengthened and rewards are provided for disclosing white-collar offenses.


In conclusion, the prevalence of corruption inside governmental agencies is intimately linked to the growth in financial crimes in India, providing a favorable environment for illegal operations. It is crucial to not only strictly enforce current legal frameworks but also adopt new, strict criminal laws to reflect the changing nature of these financial offenses in order to successfully combat this emerging problem. These offenses can be roughly divided into two categories: classic and conventional offenses, which are governed by normal criminal laws, and white-collar offenses , as well as social and economic offenses, which are governed by regulatory legislation. The Customs Act, the Atomic Energy Act, and the Essential Commodities Act are only a few of the acts that make up the legal framework for dealing with these offenses. Though, the clever use of legal loopholes by people with criminal intent frequently undermines the effectiveness of these laws, making law enforcement a difficult undertaking. Numerous important trends and preventative measures need to be taken into account in order to lessen the rising threat of financial crimes. Priority one should be given to educating the public about the severe repercussions of these actions. The people can be empowered to understand their rights and obligations via the use of media and other communication channels, legal literacy initiatives, and other strategies, serving as a preventive step. Second, harsher punishments for financial crimes can act as a potent deterrence. In some circumstances, it may be judged essential to apply the law retroactively to guarantee that those guilty get the appropriate punishment. Third, the enforcement infrastructure, which includes organizations like the Enforcement Directorate and the Central Bureau of Investigation, has to be significantly strengthened. To identify and stop financial crimes, these institutions must work together smoothly. Fourth, creating an open and competent judicial system is essential to effectively combating these violations. In order to appropriately handle the increasing nature of financial crimes, changes to current legislation may be necessary. Last but not least, the media is crucial in increasing public knowledge of these transgressions and highlighting their seriousness. More coverage of these topics can have a substantial impact on public opinion and help to increase the criticism of such illegal conduct. There is hope for reducing the prevalence of financial crimes by combining the power of public knowledge, stiffer legal penalties, efficient enforcement, clear laws, and media influence, strengthening the framework on which India’s economic and social success is founded.

Gaana N

CMR University School of Legal Studies, Bangalore

[1] Edwin H. Sutherland, White Collar Crimes (New York: Dryden Press, 1949), at 1.

[2] Gilbert Geis, “The Criminology of White Collar Crime,” American Sociological Review 48, no. 4 (1984): 561-69.

[3] Jackall Robert, “White Collar Crime: A Theoretical and Empirical Analysis,” in The SAGE Encyclopedia of Criminology and Criminal Justice (Thousand Oaks, CA: SAGE Publications, 2014), 1-10.

[4] Timothy L. Hall and John J. Mastrofski, “White Collar Crime,” in The Encyclopedia of White Collar Crime, ed. Timothy L. Hall and John J. Mastrofski (Westport, CT: Greenwood Press, 1997), 1-10.

[5] Gilbert Geis, “White Collar Crime,” in Handbook of Criminology, ed. Daniel Glaser (Chicago: Rand McNally, 1974), 541-55.

[6] Edwin H. Sutherland, White Collar Crime (New York: Dryden Press, 1949), at 1.

[7] Mahesh Chandra, A Critical Study on White-Collar Crimes in India, 5 Int. J. Bus. Mgmt. Invent. (IJBMI) 53, 55 (2016).

[8] Marshall B. Clinard & Richard Quinney, Socio-Economic Crimes (1973).

[9] Amit Kumar Gupta, “Steps Path to White Collar Crime,” Indian Journal of Integrated Research in Law 2, no. 4 (2023): 5.

[10] Dr. Amit Kumar Gupta, “REASONS FOR THE GROWTH OF WHITE COLLAR CRIME IN INDIA,” Indian Journal of Integrated Research in Law 2, no. 4 (2023): 7-9.

[11] Emmanuel Amara, The Enron Scandal (Filmakers Library 2007)