Monday, March 14, 2011

White Collar Crimes in Indian Education Sector

White Collar Crimes in Indian Education Sector :

Definition of White Collar crime :
According to Britannica encyclopedia “White-collar crime that is part of a collective and organized effort to serve the economic interests of a corporation is known as corporate crime. In some cases corporate crimes are conducted by bogus entities that pose as legal corporations or partnerships. Although corporations cannot be incarcerated, they can be criminally punished with fines and other sanctions”[1]
According to eminent criminologist Mr. Edwin Sutherland,who coined the term ‘White collar crime’ for the first time in his presidential address to the American Sociological Association in 1939,and he is of view that white collar  crime is committed by person of respectability and social standing, including engineering, doctors,educationist,l awyers,chattered accountants,Journalist  etc.
Ironically,he excluded traditional crimes like murder, adultery, intoxication from the purview of white collar crimes.The major cause for the outbreak of white collar crimes is greed for money and wealth.
Mr.Peter Goldmann, editor of White Collar Crime Reporter, a trade publication for lawyers and investigators, said, "White-collar crime is spinning through the roof. It's spinning new varieties daily and the incidence and amounts of money being stolen are incredible."
Many cases related to white collar crimes are of recent origin like Tax evasion/foreign exchange violations of Hasan Ali or corporate crime by Satyam ‘s Rama Linga Raju.
W. Steve Albrecht, associate dean at the Marriott School of Management at Brigham Young University is of view that"People commit fraud because of three factors: financial pressure, the perception of an opportunity, and rationalizing it as O.K. This is the fraud triangle," he said. "All three of these elements have been increasing. Being at the down part of an economic cycle exacerbates the problem, but we were seeing a lot of it in the good times as well."
There are many allegations against businessmen, lawyers ,medical practitioners and educational institutes,who falsify the accounts for the purpose of  tax evasion in the country.Unfortunately such cases are rising in the country.

Many experts in Criminal law and Criminology are of view that  there should be separate courts for such offences [Economic offences courts do exists in metropolitan areas] 
Mr.N R Narayana Murthy maintained that "elite" are going unpunished though they commit "huge crimes" in the country and saw it as "problem with this society."

Education Sector-White collar crimes :

Prof (Dr) Sanjay Gupta  in Times of India  said “Education in India is a seller's market today. Total enrollment     in higher education is 18.6mn, which is expected to grow to 22mn by 2012. Requirement on the other hand is growing at -20 % causing a shortfall of 45% in the number of seats required. Education in India is a seller's market where a student does not choose the institute, but an institute chooses the students that they will admit depending upon whether their priority lies in merit (as with premium like ITTs, IIMs, or (AIIMS) or means as is the case with most privately owned ones.

Sensing a huge business opportunity, several private institutes have come up in the last few years, thus creating some additional capacity Ironically, a majority of these are owned by politicians and generally offer engineering and management education only. Despite government regulations, they are run like small business enterprises with little or no monitoring or accountability mechanisms in place to ensure the relevance and quality of education imparted. They are like factories churning out products that few want to use. One major reason for the poor quality of graduates is lack of good teachers in these organizations. Teachers are the most ignored and exploited lot. They are hired and fired at will and not given the respect, space and autonomy which would encourage them to bring in innovations in their teaching methodologies.”[2]

“When the matter comes to the white collar crimes educational institutions do come in the league to operate with impunity. A nastier role is played by the private institutions who are least bothered in providing the education, but only concentrate of making business at the cost of the children’s future. Even rackets operate in these institutions for procuring students to appear in the examinations on the basis of manipulated eligibility certificates, thereby damaging the standard of education in India. When it comes to the Governmental institutions, the teachers and staffs of the institutions are often found to be involved in unscrupulous practices, since they can hardly make fortune from the inadequate salary they receive from the government. Teachers often drag the students for taking private tuition and even go to the extent of blackmailing them of ruining their future, if they deny doing so.”[3]

many institutes are functioning with out any valid approvals and permits from regulatory authorities, operating in the country and abroad, it is understandable that they are earning huge amount of money through fraudulently practices and illegal means.

Recent cases of Fraud in Education Sector:

Scams in Regulatory bodies:
Deemed Universities scam:
The Tandon Committee constituted by the HRD Ministry to investigate the deemed university scam has found that of the 130 deemed universities, 44 had abysmal academic and physical infrastructure and are mainly family fiefdoms. On the recommendations of the Tandon Committee, the HRD Ministry derecognised 44 deemed universities. The case of the  de-recognized deemed universities, having two lakh students on their rolls, is with the Supreme Court.[4]
AICTE scam:
The CBI has completed its probe in about 200 complaints. The agency found that 42 institutes were granted illegal approval by the AICTE. In a glaring case the agency detected that one building was inspected by the experts appointed by the AICTE thrice and recommended approval for three different colleges for the same building. A few inspection committees did not visit the site of the proposed colleges but submitted their reports. The AICTE scam is so large that 17 CBI branches  investigating it.[5]
MCI Bribe scandal
The Medical Council of India[MCI] has also a dubious record for granting approval to medical colleges. The MCI President was arrested recently for accepting a bribe of Rs 2 crore. According to reports, the CBI in its recent raids found that the former President of the MCI and his family possessed disproportionate assets worth Rs 24 crore. A good development is that the President of India has dissolved the MCI and replaced it by a six-member Board of Governors.[6]
Bar council member arrested for taking bribe  :
Delhi City lawyers were on a collision course with the CBI after two Supreme Court advocates, including a member of the Bar Council of India (BCI), were arrested by the agency on the charge of taking a bribe for granting affiliation to a Ghaziabad-based law college[7].

52 A.P Institutes lack approval:
All India council for Technicle Education asked government of A.P to take action under Indian Penal Code against 52 institutes functioning without any approvals. [Reported in Deccan Chronicle]

Other scams in Education sector

A.Raja tried to influence judge in education scam:

In his letter to the then CJI Justice.K.G Balakrishnan , Justice Reghupati of Chennai High Court had observed that "a counsel, who made an attempt to exert influence on the court by using the name of a Cabinet minister, cannot be allowed to succeed in snatching an order in his favour by advancing a threat".In an anticipatory bail plea by S Kirub Shridhar, a third year student in a private medical college in Puducherry, and his doctor-father Krishnamoorthy.who had been booked by the CBI for allegedly using the services of a Pondicherry University official and a middleman to inflate marks to get a medical seat at the time of admission.

Education loan scam:

Investigation into the multi-crore fake education loan racket has revealed that the scamsters preferred to open bank accounts in nationalized banks to gain the confidence of their victims. The cops were stunned to find a large number of bank accounts of nationalized banks like State Bank of India, Punjab National Bank and Bank of India — where it is difficult to open an account.
Subsequent investigation revealed that officials of some bank branches threw the rules and regulation aside while opening the bank accounts in the name of the scamsters and their fake companies. The crime branch had on Friday arrested two men — identified as Abhishek Hasija (24) and his brother Tanishk Hasija (21) — who helped Varun Sardana, the gang leader, to open bank accounts in various nationalized banks.[8]

Mass copying by Judicial officers in A.P:

Judicial officers, who supposed to interpret law  and give judgment ,were found copying in LL.M distance mode [P.G course] exams in Warangal, K.U university.The High Court of A.P suspended judicial officers and it also suspended, "rule of increments for gaining P.G degree for judicial officers". 

Capitation fees scam: 
The premier agency  CBI investigates allegations of capitation fee demanded by Sri Ramachandra Medical College & Research Institute.

Sex-for-marks scandal:
The Madhya Pradesh government has ordered an investigation into the sex-for-marks scandal at the Rani Durgavati University in Jabalpur. Madhya Pradesh Education Minister Laxmikant Sharma said that the state government has formed a committee to investigate the matter.[9]
Investigations revealed that the Controller of examinations SH Rana and Kakoria, were involved in the scam.

Erroneous Admissions in IIT :
In a written reply to the Rajya Sabha, Human Resource Development Minister Kapil Sibal said that according to the Joint Admission Board, 52 candidates in the general category were offered admission to IIT though they had not qualified in the test.
"Some candidates who wrote the JEE 2010 were erroneously offered admission. The inadvertent error in course allocation pertained to candidates who had not qualified in the architecture/design aptitude test, were offered admission," Sibal said quoting information from the Joint Admission Board.

TVU ,California:
Tri ValleyUniversity faces charges of fraud and cheating in the education, most students affected by the closure of "sham" Tri-Valley University (TVU) in California, on charges of visa fraud. Some 1,555 TVU students, 90 percent of them from India, mostly Andhra Pradesh.

Carrick Institute of Education , Melbourne:
A Melbourne-based private institute is on the verge of financial collapse, threatening future of over 4000 students, including from India.

The education sector is huge market for private sector to invest, the state alone can not provide education to growing population.The private sector and private-public partnership fills vacuum.But the issue of concern  is lack  of standards and accountability in private sector education.There is a need to curb corruption in the education sector to save gullible students from the trap of fake institutes and universities ,which lacks approvals and permit from the regulatory bodies and government.The growing white collar crimes in the education is issue of concern to the civil society.There is a need to  take corrective steps to rectify the situation.Ever parent/student should be whistle blower in unearthing scams in the  education sector and government must ensure protection to whistle blowers by enacting law on whistle blower protection. 

  1. Starting an institute without approval should be made penal offence  under Indian Penal Code.
  2. Separate courts should be established as recommended by Prof Yaspal Committee .  
  3. There should be free legal aid through Legal Services Authority to aggrieved students. 
  4. All cases related to cheating by Educational Institutes should be referred to Fast track criminal courts for speedy trial.
  5. There should uniform regulatory body for approvals as recommended by Prof. Yaspal Committee. 
  6. Foreign universities admissions should be streamlined through proper checks/balances to avoid visa frauds. 
  7. Compulsory registration of Agents for foreign universities. 
  8. Necessary action against news paper for publishing fake institute /fake university advertisement by Advertisement council by amending law.

    [2] Times of India
    [3] White Collar Crimes in India ;by on February 1, 2011;
    [5] ibid
    [6] Ibid
    [7] -
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