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White Collar Crime- Review

White Collar Crime- Review. Muhammad Aamir Ilyas. Expenditure. 300. Income. Saving. 1000. 700. Cash 200. Assets. Plot 5 00. Asset cases. Around 80% of NAB inquiry/ investigation activities relate to asset cases Accused acquire, own or create asset with black money

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White Collar Crime- Review

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  1. White Collar Crime- Review Muhammad AamirIlyas

  2. Expenditure 300 Income Saving 1000 700 Cash 200 Assets Plot 500

  3. Asset cases • Around 80% of NAB inquiry/ investigation activities relate to asset cases • Accused acquire, own or create asset with black money • Slightest mistake during investigation can spoil the case as “accused is considered favorite child of the law”

  4. Assets? “Assets are the resources owned by an entity which benefit its future operations and are convertible to cash” Examples: Cash, vehicles, land, building, bonds, jewelry, furniture etc

  5. Asset cases • Determination of known and fair sources in the hands of accused • Valuation of suspected assets • Reasonable estimate of expenses incurred by the accused • Quantification of un-explained assets/ investments/ Expenses

  6. Valuation of assets • Cost of Acquisition (COA) • Mode of Acquisition (MOA) • Fair Market Value (FMV) at the time of Acquisition • Present Market Value (PMV)

  7. Cost of Acquisition “sum total paid by a person against acquisition of an asset which is inclusive of the price paid plus transfer & other allied/incidental charges”

  8. Investigators! Keep in mind

  9. Mode of Acquisition • Purchase • Inheritance • Gift • Exchange • Allotment • Terms of Employment • Court decree • Compensation

  10. Mode of Acquisition 9. Lease/ Loan 10. Installments 11. Windfall (Prize Money, Lottery/ Raffle) 12. Family settlement 13. Relinquishment of rights by other co- shares 14. Will

  11. Purchase of asset “Purchase is the transaction between purchase and seller wherein consideration is paid by the purchaser and in return he acquires an asset”

  12. Understatement of COA Purchaser’s interest: • Stamp duty/Transfer charges & CVT • Probe by tax authorities • Corruption money • Departmental probe Seller’s interest: • Evasion of capital gain tax • To whiten black money

  13. Word of caution for IOs… • If accused is purchaser then submission of sale deed is not enough. • If he (accused) declines seller may be contacted • If seller is not responding Tax authorities may be asked to produce tax record • Mode of payment may be examined to find out hidden bank accounts • If the accused is seller check relationship of parties

  14. Word of caution for IOs… 6. Credit worthiness of purchaser may be probed 7. Transfer of asset may be established • Date of purchase is vital factor as it has to be read with the dates of availability of funds • Status of property should be cross-checked with the concerned government authorities CEO/MEO/ETO. “Malba” in registered deed might be a “rented bungalow” • Multiple registered deeds

  15. Inheritance No COA is involved in inheritance, therefore, concept of FMV at the time of acquisition or PMV has hardly any relevance • The evidence furnished by the accused must be verifiable. • Inheritance should be in line with Islamic law of inheritance • Credit worthiness of legates in the light of their tax record, bank record and revenue record

  16. Exchange • Section 118 of Transfer of Property Act 1882 defines “Exchange” • This mode of acquisition is very popular in rural areas. • COA will be an amount equal to the COA of the asset surrendered • COA= COA of asset surrendered + payment • The most vital point is FMV of asset acquired and FMV of asset surrendered

  17. Gift Section 122 of Transfer of Property Act 1882 defines “gift” as “ Gift is the transfer of certain existing moveable or immoveable property made voluntarily and without consideration, by one person called the Donor, to another, called the Donee, and accepted by or on behalf of the donee “

  18. Gift Under the Muhammadan law of Hiba for a valid gift there are only three pre-conditions • Declaration of the donor • Acceptance by the Donee • Delivery of possession • Donor’s list remains inexhaustible • Consideration for gift is always “love and affection” Investigators have to be careful…

  19. Investigators have to be careful… • Oral gift • Registration of gift deed • Transfer of ownership • Love and affection • Relationship of donor and donee • Credit-worthiness of donor

  20. Allotment Following aspects must be checked • Who is original allottee? • Terms and conditions (To establish COA) • Complete particulars (Size, nature etc) • Genuineness of allotment • If the allotment smacks misuse of authority then the FMV of the ass at the time of allotment • Verification of record of relevant agency/department

  21. Compensation and lease • The authenticity of the claim • Compensation must be well within legal parameters announced by the competent authority • Possibilities of excessive claims, fake verification and overpayments must be probed • The aspect of the misuse of authority by the concerned officials should also be given due consideration • Verification from some other co-affectees is always a useful tool to un earth the misdoings.

  22. Forms of acquisition • Direct transfer • Transfer through Rep/Nominee • Attorney • Open transfers • Undocumented possession/acquisition • Benami

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