Chains and Collars: Identifying White Collar Crimes in the Philippines

Introduction

From a perspective of a child, and even an adult, one who wears suit and tie, and stands tall and firm, is someone who is accomplished and well-educated, hence, begets more respect. Often times, we see them working in the four corners of a fully-airconditioned office, facing a desk, and sitting comfortably in their respective swivel chairs, not making a single sweat – conducive, comfortable, and convenient working environment.

However, did I ever tell you that most of the time, probably, as ‘Meemaw’ (in an American TV Series called ‘Young Sheldon’) phrase it, “what’s in a person’s face is not always what’s in their heart.” Unfortunately, sometimes, it is all a facade.

The proliferation of crimes is not just confined in the idea of a brutal murder in the deepest darkest night or even in a broad daylight. Crimes proliferate also in the busiest work environment, as this case, committed by individuals who have white-collar jobs.

To define, according to an American writer, Upton Sinclair, white-collar jobs typically include company management, lawyers, accountants, financial and insurance jobs, consultants, and computer programmers, among many others.¹

Hence, despite the nature of work that these individuals have, the luxury of high salaries and the possession of an expert skill that is sufficient enough to strive and thrive in life, why and how can they commit such crimes? What are those crimes?

Is it true that money makes someone grow greedy?

White collar crimes examples

Reportedly, the term “white-collar crime” was first created in 1939, according to the Federal Bureau of Investigation (FBI) of the United States of America. Since then, it has been synonymous with all types of frauds performed by business and government personnel.

In general, some of the many examples of white-collar crimes are mostly nonviolent and typically involves, among other things, public corruption, health care fraud, mortgage fraud, securities fraud, and money laundering.²

In the Philippines, in line with this, white-collar crimes are also rampant, especially in the service of those individuals who occupy a public office. In fact, this has been the societal problem that a lot of past administrations had been trying to get rid of. And up until now, such crimes continue to persist.

Types of white-collar crimes

As already stated, white-collar crimes are rampant in our today’s society, the following are types of the said crimes:

• Fraud – this crime is anchored on the use of trickery and deception. The perpetrator’s goal is financial gain. The most common example is imitating someone else in order to take out that person’s funds, may it be from his/her personal bank account or other sources of funds.
• Bribery – the act of paying someone, usually those in position, to make arrangements that would lead to benefit the perpetrator financially. Most commonly done through paying someone in authority to make your action/business appear legal; such as paying BIR personnel for the purpose of evading higher tax collections.
• Scheme – The so-called “business” under this relies on the constant entry of new investors. Perpetrators were able to create a perfect image of a legit business or company. The money brought by the recent investors was used to pay the earlier investors. This creates an image of a legitimate business which lures more people to invest in it. Owing to its unstable nature, recent investors would not be able to receive their profits unless new “investors” invest in it.
• Insider Trading – the use of knowledge about the company you are working for. Perpetrators trade their knowledge of the company, those that are not meant to be known by the public, to cheat. This puts the company in a situation where it could be easily attacked from the outside, by its opponent businesses.
• Embezzlement – generally involves the act of misappropriation of funds entrusted to you, which could be one that belongs to the government or a company. Commonly done by a company manager wherein the money was obtained lawfully, however, it was misappropriated for personal or criminal use.
• Cybercrime – Involves the usage of a computer network to collect personally identifying information, among others. Perpetrators make use of computer viruses and their hacking skills to obtain sensitive digital information that may help them generate funds.
• Money Laundering – one basic distinction between embezzlement and money laundering is that in the latter money was unlawfully obtained. The authorities find its origins untraceable because this usually involves the transfer of money through foreign banks or legitimate businesses.

Characteristics of white-collar crimes

Knowing the types of white-collar crimes, we now ponder on the question what are its characteristics that makes it as a white-collar crime?

• Employment of deceit.

White-Collar crimes are premeditated. They are well-planned, such that the deceitful acts were intentional and went through tedious thought process. Perpetrators were fully conscious of their actions. These were deliberately employed to achieve their end goal of deceiving others for personal and financial advantage.

• Access to their victims.

Perpetrators in white-collar crimes have legitimate or easy access to their victims. This makes it easier for them to execute their sinister plans. In embezzlement and insider trading, perpetrators are already employed in that company.

• Superficial legality.

The actions of the perpetrators create superficial legality. These acts appear legal in the eyes of their victims or targets. In cases of pyramiding schemes, so-called businesses were able to create a perfect image for their “business” which lures more people to invest in it.

Why is it called white-collar crimes?

The term “white-collar crime” was first coined by criminologist Edwin Sutherland in 1939 to describe non-violent punishable offenses committed by individuals in respectable occupations, such as business, finance, or government. These crimes are typically committed for financial gain, often involving fraud, embezzlement, or other forms of deception.³

This refers to the type of work traditionally associated with these crimes, such as office work, which often involves wearing a white shirt and tie. These individuals are often well-educated and hold positions of trust, which makes it convenient for them to commit these unlawful acts without detection.

It has become widely used to refer to a broad range of non-violent crimes committed by individuals in positions of power or authority, whether in the public or private sector. While these illegal acts may not be as overtly violent as other types of crime, they can still have serious consequences for individuals and society as a whole.

Who commits white-collar crimes?

Individuals in positions of trust and authority within organizations, such as corporate executives, government officials, and professionals like lawyers and accountants, are more likely to commit white-collar crimes. These people are capable of committing financial crimes such as embezzlement, bribery, and fraud.

In the Philippines, the Revised Penal Code does not specifically define white-collar crimes. However, the Securities Regulation Code and other laws and regulations provide for the prosecution of individuals who commit financial crimes.

For example, the Anti-Graft and Corrupt Practices Act (RA 3019) prohibits public officials from using their positions to enrich themselves or others.⁴

The Anti-Money Laundering Act (RA 9160) also criminalizes money laundering activities and imposes penalties on individuals and entities engaged in such activities.⁵

Furthermore, the Bangko Sentral ng Pilipinas (BSP) has established regulations and guidelines to prevent money laundering and other financial crimes in the banking sector. The BSP’s guidelines require banks to implement measures to prevent and detect money laundering activities, including the establishment of anti-money laundering council, programs, and the reporting of suspicious transactions to authorities.⁶

What are white collar crimes in the Philippines?

White-collar crimes in the Philippines include embezzlement, securities fraud, insider trading, Ponzi and pyramid schemes, identity fraud, cyber-crimes and money laundering. It also involves crimes committed punishable under Philippine Commission Act or RA 10667.⁷

Is corruption a white-collar crime? Why?

Corruption is a white-collar crime. Corruption involves a public officer. A public officer is defined in RA 3019 or Anti-Graft and Corrupt Practices Act and Article 203 of the Revised Penal Code (RPC).

In Section 2 (b) of RA 3019, public officers “includes elective and appointive officials and employees, permanent or temporary, whether in the classified or unclassified or exempt service receiving compensation, even nominal, from the government”.⁸

While in Article 203 of the Revised Penal Code Public Officer is:

Art. 203. Who are public officers- For the purpose of applying the provisions of this and the preceding titles of this book, any person, who by direct provision of the law, popular election or appointment by competent authority, shall take part in the performance of public functions in the Government of the Philippine Islands, or shall perform in said Government or in any of its branches public duties as an employee, agent, or subordinate official, of any rank or class, shall be deemed to be public officer.⁹

Being a public officer in any government agency, he/she has taken advantage of his/her position for some financial gain.  The offended party in corruption is the government itself and the public. An example of corruption is Direct Bribery under Article 210 of the RPC.

Acts punishable as Direct Bribery is when public officer commits:¹⁰

1. By agreeing to perform, or by performing, in consideration of any offer, promise, gift or present- an act constituting a crime in connection with the performance of his official duties;¹¹
2. By accepting a gift in consideration of the execution of an act which does not constitute a crime, in connection with the performance of his official duty; and¹¹
3. By agreeing to refrain, or by refraining, from doing something which it is his official duty to do, in consideration of gift or promise.¹¹

A recent case of bribery, when the Supreme Court upheld the rulings of Sandiganbayan by which the accused being a public officer acted in connivance with his co-accused in the flawed bidding resulting to unwarranted benefits and advantages to his favor is guilty of violating RA 3019.¹²

What kind of white-collar crimes or felonies can a public officer perpetrate?

As expressed by the 19^th century English Historian, John Dalberg-Acton, “Power tends to corrupt, and absolute power corrupts absolutely.” Indubitably, this quotation still holds true at present. Those who are wielded with power have this tendency to misuse and abuse the same and use it for their own advantage.

As can be observed from the case of the Philippines, public officers can also be involved in the commission of white-collar crimes. Apart from the violation of RA 3019 or the Anti-Graft and Corrupt Practices Act and the commission of Direct Bribery which is punishable under the Article 210 of the RPC, public officers may also perpetrate the following white-collar crimes:

Indirect Bribery

Indirect Bribery, which is punishable under Article 211 of the RPC, is committed if the public officer accepts any gift or present by reason of his office that he owns. In this type of crime, the public officer is not deemed required to do a thing. Mere acceptance shall constitute the crime. Thus, the crime is committed if the public officer refuses to accept the bribe.

Qualified Bribery

The public officer may also commit Qualified Bribery which is punishable under Article 211-A under the RPC. This is committed when a public officer entrusted with law enforcement refrains from arresting or prosecuting an offender who has committed a crime in consideration of any promise, gift, or present.

Frauds Against the Public Treasury and Similar Offenses

The public officer may also commit a crime punishable under Article 213 of the RPC, which punishes two (2) acts, namely fraud against public treasury and illegal exaction. In the first punishable act, the public officer took advantage of his or her official position in entering into contracts involving public funds or property with the intention of defrauding the government.

On the other hand, a public officer may also commit illegal exaction, wherein the offender is a collecting public officer, who has been entrusted with duty to collect taxes, licenses, fees or other imposts, but he or she violated the rules on collection by demanding payment of sums which is different from what is authorized by law; failing to issue a receipt; or collecting or receiving, by way of payment, things or objects of a nature different from what is provided by law.

Malversation of Public Funds or Property

Malversation of public funds or property may also be committed by public officers. This crime is committed when a public officer who has the custody or control of funds or property by reason of the duties of his office, but he appropriated, took, misappropriated, or consented, or through abandonment or negligence, permitted another person to take them for personal use.

Plunder

Republic Act No 7080, otherwise known as the Anti-Plunder Act punishes any public officer who amasses, accumulates, or acquires ill-gotten wealth through a combination or series of over or criminal acts, thus:

Sec. 2. Definition of the Crime of Plunder, Penalties. Any public officer who, by himself or in connivance with members of his family, relatives by affinity or consanguinity, business associates, subordinates or other persons, amasses, accumulates or acquires ill-gotten wealth through a combination or series of overt or criminal acts as described in Section 1 (d) hereof, in the aggregate amount or total value of at least Fifty million pesos (P50,000,000.00), shall be guilty of the crime of plunder and shall be punished by life imprisonment with perpetual absolute disqualification from holding any public office. Any person who participated with the said public officer in the commission of plunder shall likewise be punished. In the imposition of penalties, the degree of participation and the attendance of mitigating and extenuating circumstances shall be considered by the court.¹³

The commission of plunder by a public officer is not a new occurrence in the Philippines. No less than the former President Joseph Ejercito Estrada was found guilty by a special division of Sandiganbayan for plunder for illegally amassing wealth through kickbacks and commissions from jueteng operations, stocks manipulation, and tobacco excise taxes.¹⁴

Can private individuals commit white-collar crimes? How?

With the development in technologies, individuals and groups have been able to put their schemes to the next level, some to other large-scale operations, just to defraud others, particularly those who can easily fall into their traps. Some white-collar crimes that may be committed by private individuals are as follows:

Swindling or Estafa

Swindling or estafa, which is punishable under Article 315 of RPC, may be committed when the offender defrauded another by reason of abuse of confidence or by means of deceit; and damage or prejudice capable of pecuniary estimation is caused to the offended party or to a third person.¹⁵

It may be committed in three (3) ways:

1] estafa with unfaithfulness or abuse of authority;¹⁶

One of the most prevalent acts of estafa are Ponzi schemes and other investment and networking scams. These scams are perpetrated by inducing the public to invest in a carefully planned investment scheme with a lucrative promise of high returns with little or no risk at all.

The funds used for the payment of the purported high interests to new investors are from the existing investors.  In the beginning, these scammers will make it appear that the business is profiting and operating as a legitimate going concern.

However, the problem arises when the funds generated from existing investors for the payment of interests for the new investors are no longer sufficient.

Tax evasion

Tax evasion cases are also rampant these days. Instead of rightfully paying the right amount of income tax and business tax, individuals and businesses try to evade the mandatory payment of taxes to save money and preserve their income. This can be done through various schemes such as reduction of tax base, non-reporting of income, claiming false deduction, non-filing of tax returns, non-declaration of income and properties, bribery, or even connivance with concerned officials, among others.¹⁷

That said, white collar crimes are not confined only to those who are in public office, they are as well committed by private individuals. They are perpetrated by people of a higher socioeconomic status. These can be individuals who are private in practice such as: bankers, business professionals, and money managers.¹⁸

Such crimes may be committed by private individual through their occupations, transactions in their day-to-day business. It could be through copyright, bribery, forgery, and other crimes that are associated with businesses with individuals. That said, committing white-collar crimes are often prevalent in the corporate sectors than others.¹⁹

Conclusion

White-collar crimes are rampant in today’s society. It can be committed by private or public individuals. In the Philippines, such crimes may be perceived as uncontrolled, especially those committed by individuals who are in public office.

There are many types of white-collar crimes: from bribery; fraud; inside trading; embezzlement; etc. What constitute them as white-collar crimes is that:  it employs deceit; easy access to would-be victim; and from its face, it seems legal but in truth, it is not.

Such crime is described as being non-violent and committed by those who have respectable occupation. That said, while it’s true that from its nature, it is non-violent crimes, it has effects to individuals and society as a whole.

Under our Revised Penal Code, it does not specifically point the term “white-collar crimes,” but they are prosecuted in our penal laws, under various laws, and regulations of our country. Every effort should be focused by the State to check the would-be criminals in disguise of their white-collar professions.

1. White Collar: Definition, Types of Jobs, and Other “Collar” Types by Adam Hayes [2022][↩]
2. Federal Bureau of Investigation, An Official Website of the United States Government[↩]
3. Sutherland, E. H, (1940), White-collar criminality, American sociological review, 5(1), 1-12[↩]
4. Anti-Graft and Corrupt Practices Act [RA 3019][↩]
5. Anti-Money Laundering Act (AMLA) or Republic Act No. 9160, as amended by RA 10365 and RA 11521[↩]
6. Id.[↩]
7. Philippine Competition Act Press Release dated 13 June 2018[↩]
8. Supra., RA 3019[↩]
9. Article 203 of the Revised Penal Code[↩]
10. Reyes, The Revised Penal Code, Book II, page 457, 2021 Edition[↩]
11. Ibid.[↩][↩][↩]
12. Villanueva vs. People, G.R. No. 218652, February 23, 2022[↩]
13. RA 7080[↩]
14. Rappler: No closure yet on Erap Estrada’s plunder case[↩]
15. Article 315 of the Revised Penal Code, as amended by RA 10951[↩]
16. Id.))

    2] estafa by means of false pretenses or fraudulent acts executed prior to or simultaneously with the commission of the crime; and((Id.))

    3] estafa through fraudulent means.((Id.))

    There is also a Syndicated Estafa which is committed when the following elements are present: any act of Estafa under Article 315 or 316 is committed by a group of five persons acting as a syndicate to defraud others by misappropriating the money contributed by the stockholders or members of the corporation, rural banks, cooperatives, “samahang nayon(s)”, or farmers’ associations, or of funds solicited by corporations or associations from the general public.((Presidential Decree No. 1689[↩]

17. Study on the Tax Avoidance and Evasion Schemes on the Transfer of Real Properties[↩]
18. What Is White Collar Crime in Michigan?[↩]
19. Ibid.[↩]