What inspired you to write this book and why do you feel these stories need to be told?
Most of us have become victims of frauds and related crimes at some point or other in our life. Many a time, we might have felt miserable and helpless while we or persons close to us faced such fraudulent experiences. We also hear about instances of white collar crimes happening in our community, state and in various parts of the world from the media. History reveals that crimes travel across the globe in time as criminals learn from each other for successful criminal indulgences. We hear about a crime elsewhere – in a different city or a country – and within no time we find the same thing happening with necessary improvisation and sophistication in our livelihood. It is necessary for all us to be sufficiently aware of various fraudulent practices, the steps to be taken to prevent them and what are the remedies if we become victims of such frauds. The book “You Just Got Cheated” is an attempt in that direction.
Does the way society handles white-collar crimes indicate social inequities and inequalities?
Yes, to a greater extent. As I mentioned in the book, if we see a person grabbing a few currencies from the cash box of the supermarket, we would badly want him to be caught instantly and punished severely. But if a large scale embezzlement has happened in a major bank, we view it with curiosity for some time and never much concerned later whether the criminals were caught or not. Similarly, while cases of bribery or corruption at lower levels are seriously viewed by society, corruption and frauds of large magnitude indulged by powerful persons are considered to be ‘privileged’ actions. However, in the recent times, there is a definite change in the attitudes and perceptions of people about white collar crimes, perhaps due to the increased involvement of the media in projecting the same and the focus of governments to step up the enforcement through coordinated efforts.
Are there systemic factors that influence white-collar crime?
The answer is both “No” and “Yes”. If one examines this with a macro perspective and say that white collar crimes thrive under specific economic system or political system or cultural/religious system, that would be incorrect. But if we state that such crimes would thrive everywhere, irrespective of the nature of social, political, economic or cultural system, where there are lax regulations, weak enforcement, low negative public perception of white collar crimes, greater opportunity to commit crime, and low risk of detection, then that would be correct.
In the book, you delve into crimes in the health and pharmaceutical sectors. Could you tell me about some of the most egregious examples you found and the consequences?
One sector every one of us needs to be concerned is the health services sector and any illegality or ethical or dangerous actions in this sector can greatly harm us and sometimes cost us our precious lives. As there are several visible and invisible victims of the covert and overt experiments and misleading actions by the pharma companies independently or in collusion with the health services personnel, there is an urgent need to have strong regulations in place along with a foolproof mechanism to enforce them and a less complex judicial system to render justice to the victims and to impose appropriate punishments on the criminals.
Some of the areas of white collar crimes in health and pharma sectors which have been discussed in detail in the book with examples are a) unethical clinical research, b) victimization of patients as a result of collusion of doctors, pharma and medical companies, c) deepening of inequality in society through unreasonable pricing for patented, d) dangers when Doctors becoming brand ambassadors and e) the issues related to Alternate medicine streams.
What lessons should the health sector and pharmaceutical industry take away from instances of corruption and what barriers are there to reforms?
As new diseases and novel strains of viruses emerge, there is frantic research for quick remedies. Clinical research trials, when conducted without following proper procedures and protocols, are direct crime on the victims, patients, sponsors and also on society. Falsification of results, failure to report exceptions, side effects and adverse events, employing unqualified persons for conducting the research, not subjecting to an ethics committee, misleading the respondents, not taking informed consent, using fake data/respondents and deliberate manipulation, fabrication or destruction of records et cetera are crimes in clinical research across the world.
Having strong regulations or establishing an enforcement system would not be enough to curb the crimes in this sector. Corporate organizations need to nurture strong business ethics.
I want to touch on the Adarsh Housing Scam, which you write about in the book. Could you tell our viewers / readers more about that?
Adarsh housing scam is a classic case to understand how various regulatory systems were bypassed and bodies were strategically manipulated over many years to acquire the property and how ultimately the criminal conspiracy was busted. I have narrated through this example how long, sustained and organized efforts are made by unscrupulous elements to corner prime public property. The slums in Mumbai where more than a few millions stay are just a few kilometers from the Adarsh building site. Most people do not have toilets and the public toilets are too far and grossly insufficient. An average of 52 persons share a water tap and in some areas one tap is shared by more than 1000 persons. It is shocking to see how certain affluent and influential persons sketched a plan to extract public property to satisfy their selfish interests by conniving with public officials. When a hapless labourer, who has no place to rest his head, puts up a temporary one room shelter for his family or after a day long labour, a street vendor spends the night on the side of the pavement, there is immediate action to evict them. However, the powerful individuals who illegally construct their abode in a public property continue to stay there for years as they can afford to spend money to defend their actions.
You write, very powerfully, “when powers unite to indulge in mischief, it is extremely difficult to bust the scam. The role played by social activists and a few committed officials of government and defence in exposing the unholy nexus of politicians, bureaucrats and businessmen is worth appreciating.” These stories often go untold and so, to a certain point, people don’t realize that they are being exploited. How do we expose bad actors and hold them accountable, and what are the obstacles standing in the way?
It is quite obvious that the unholy nexus of powerful persons and wealthy individuals is difficult to break. The illegal activities by them and their modus operandi are not easily visible and comprehensible to ordinary masses. Some of the media houses are also covert participants or beneficiaries of this power elites and naturally the information related to the activities are suppressed. However, I have cited a few examples of scams where it was proved that concerted action of members of public, the media, government officials and courts could help in correcting the wrongs committed by a group of greedy law violators. Regulatory authorities can play a crucial role in this regard by creating awareness among people, by conducting public consultations before finalizing a regulation and by providing stringent punishments for violators. Some of the obstacles in making white collar criminals accountable for their mischiefs are lack of effective coordination between enforcement agencies, difficulties in gathering clinching evidence due to sophisticate methods deployed by the criminals, unwillingness and lack of resources of victims to pursue the cases against perpetrators, long judicial processes etc.
Corruption of the kind you write about in this book damages peoples’ view of government programmes, of various industries and sectors, and of individuals in positions of power. The loss of trust can be damaging at the social level. How do we repair trust?
My book is substantially on the white collar crimes committed by individuals or entities or group of individuals or group of entities (sectoral level). The loss of trust is not just on the respective individuals or entities. People are aware of such crimes perpetrated by individuals and entities. The loss of trust is actually on the regulatory institutions such as auditors who audit these business or professional entities, independent directors who are on the board, and on the regulatory authorities who need to ensure that proper regulations are in place to prevent such crimes. As I mentioned in the book, there is a need for auditors who are financially independent of the clients, independent directors who are competent and committed, regulations that are stringent, and enforcement officers that are proactive and efficient.
Did you encounter challenges when you were researching, writing and publishing this book?
I started researching on the topic 6 years ago and was constantly gathering data on different categories of crimes and specific instances under each category. Though secondary data was collected from various documents, investigation reports, trial proceedings, and media accounts that are accessible to anyone, the challenge was to keep a track on the progress of investigation, trials in courts, appeals etc. I found that though there is plethora of literature on frauds, there is scant attention on the victims of those frauds. Victims are forgotten subjects in most white collar crimes. One could see the “blame the victim syndrome’ in society. Everyone including the media focus on the criminals whereas there is less attention on the plight of the victims. I selected a few instances of white collar crimes where people have been still victimized after several decades of committing the crime. I have also described the cases of serious occupational health hazards in some manufacturing sectors and entities across the world. Industrial activities that had harmful impact on the community living in and around the factories leading to life threatening diseases for people have been narrated with case studies. Interviews conducted with the families of those victims were insightful.
Do you have anything you wish to add?
This is a book dedicated to each one of us who are victims white collar crimes. The book attempts to give answers to the questions we usually ask: Who is responsible for the fraud committed on us? What makes us vulnerable to cheating? Who could have prevented the crime? What could we do to prevent the crime in future? and What action should we take to recover the losses?
(Author wishes to declare that views expressed are personal and academic in nature)
ABOUT THE BOOK
Most of us have been victims of frauds and related crimes at some point or the other in our lives. We may not have answers to pertinent questions such as: Who is responsible for the fraud committed? Why do people commit white collar crimes? What makes us vulnerable to such crimes? Who could have prevented the crime? What could individuals and entities do to prevent the crime in future and what action should we take to recover the losses? Unlike street crimes where victims are clearly identified and their losses and concerns are suitably recorded and attended to, the victims of White Collar Crimes are not given proper attention and many times such crimes are considered to be ‘victim less’.
This book attempts to examine the above questions by analyzing various types of white collar crimes, drawing examples of such crimes that have happened across the world. History reveals that crimes travel across the globe in time as criminals learn from each other for their criminal indulgences. We hear about a crime elsewhere – in a different city or a country – and within no time you find the same thing happening with necessary improvisation in our own neighborhood.
When the corporate criminals, opportunist and greedy public servants join hands, to indulge in various types of crimes, the regulatory enforcement becomes lax, farce and ineffective. In the end, the victims – the public who were adversely impacted, the shareholders who lost their investments, the consumers who got a raw deal, the employees who lost their jobs and the financiers who lost what they lent – suffer without any recourse. The book culminates with two chapters exclusively on answering questions such as – Why do people commit white collar crime? Why do people fall victim to white collar crime and how to curb this menace? The book concludes with an analysis of whistleblowers and the related challenges and safeguards.
As scams and frauds perpetuate, there is a need for a systematic analysis of the pattern, the impact and the preventive steps. The insights given in the book would be helpful for professionals as well as common citizens.
ABOUT THE AUTHOR
Dr Sibichen K. Mathew is a Commissioner of Income Tax in the Indian Revenue Service (IRS). He is a passionate researcher, blogger, public speaker and author of bestselling books. His academic qualifications include Post Graduation in Sociology from the Loyola College in University of Kerala (University topper), Post Graduation in Public Policy and Management from Indian Institute of Management (IIM), Bangalore with Corporate Governance as an elective. PhD in Fiscal Sociology from Bharathiar University, MPhil in Social Systems from Jawaharlal Nehru University (JNU) New Delhi, and LLB from Karnataka State Law University (College topper and university rank holder). He is a Certified Fraud Examiner (CFE) from Association of Certified Fraud Examiners, Texas.
PRAISE FOR THE BOOK
“After his brilliant earlier work “Making People Pay” Dr. Sibichen Mathew now turned his splendid mind to an equally important topic of white collar crimes. Crimes, are the result of the power of motive on character. The rewards of crime are far, richer and higher than the chances and risks of detection and punishment. […] The avarice, intellectual lassitude and gullibility of the victims themselves are the main reasons. Amongst the remedies as the author says, is creation of awareness, effective regulatory enforcement and encouragement and protection of the whistle blowers. Dr. Mathew has once again earned our gratitude for his concern for and commitment to the common good.”
─ Justice M N Venkatachaliah, Former Chief Justice of India, Former Chairman of the National Human Rights Commission and of the National Commission to Review the Working of the Constitution
“This is a well-researched collation of how one gets cheated, in India and abroad, and of what governments have done to curb it. It is written well, expected of an established author. It will resonate, especially with victims of one or the other of the cited instances. However, there is no cure for human cupidity.”
─ Bibek Debroy, Chairman of the Economic Advisory Council to Prime Minister of India and Padma Shri Awardee
“Mathew pieces together the multiple dimensions of white collar crime to come up with a comprehensive and illuminating picture. Moving easily from popular discourse to academic findings and back, he provides an account that is as thought provoking as it is readable.”
─ Prof. Dr. Narendar Pani, Dean, School of Social Sciences, National Institute of Advanced Studies, Bengaluru, and Former Senior Editor, The Economic Times
ABOUT THE PUBLISHER
Sara Miller McCune founded SAGE Publishing in 1965 to support the dissemination of usable knowledge and educate a global community. SAGE is a leading international provider of innovative, high-quality content publishing more than 1000 journals and over 800 new books each year, spanning a wide range of subject areas. Our growing selection of library products includes archives, data, case studies and video.
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