Business Crimes and Online Crimes

Chapter 8

BUSINESS CRIMES

AND ONLINE CRIMES

When are you guilty beyond a reasonable doubt?

I. Overview

One of the most frequently posed questions to members of the legal profession is: "How can you defend someone you know is guilty of a crime?" The answer lies in a simple truth: we are defending not only the accused but also the criminal justice system. Because of this dual role, no other area of law is more ripe with controversy than criminal law and criminal procedure.

The American system of criminal law has been at the center of constant debate since the inception of the republic. On one side, there is a clear duty on the part of the sovereign to protect its populace from the ravages of miscreants whose behavior simply cannot be tolerated. On the other hand, the easier it is for the sovereign to punish, incarcerate, or even condemn its members to death, the less free the entire society is in the end. Our criminal justice system is designed to afford maximum protection for society’s members. It is the government's burden of proof to show guilt beyond a reasonable doubt under the law of criminal procedure. The accused is entitled to an entire set of legal protections generically called due process. That phrase is derived from two provisions in the U.S. Constitution: one in the Fifth Amendment pertaining to actions by the federal government and one in the Fourteenth Amendment pertaining to actions by state governments. Under these provisions and the numerous federal, state, and local criminal codes, our system tells the sovereign we are presumed innocent until properly proven guilty according to the rules of the game. What upsets so many people in our society today is a concern that the rules may have been bent too far in favor of the accused.

As students of the legal system and as potential leaders in business, your job is to know what those rules of the game are and to learn how to comply with them as responsible members of society. Failure to do so is not only bad for business; it is bad for everyone.

II. Hypothetical Multi-issue Essay Question

Mergatroyd T. Wheeler has really come up with something. He has found a way in which his newly patented automobile engine could run on alternative energy. That alternative source of energy is found in a secret process that can turn cow pies into horsepower. His tests showed he could get twenty miles per pie (mpp) behind the wheel of his prototype named B.S. Bukaroo.

Mergatroyd took his idea to a large and prestigious investment banking firm, Wee, Cheatum, and Howe, to promote and sell shares in his new company named Go Pies. The financial records of the company were certified by I, Know, and Nothing CPAs. Shares in the new company were publicly sold to investors from all fifty states.

The company failed because the engine would only run on extremely odiferous pies, and now a number of disgruntled investors are pressing to bring RICO actions, at both the criminal and civil levels, against all parties involved. Comment.

III. Outline

What Is a Crime?

A crime is a violation of a statute for which the government imposes a punishment. A penal code is a collection of criminal statutes. Penalties could include fine, imprisonment or both.

Parties to a Criminal Action

Plaintiff

In a criminal lawsuit, the government (not a private party) is the plaintiff

Defendant

The accused is the defendant

Classification of Crimes
Felonies / Misdemeanors / Violations
↓ / ↓ / ↓
most serious / less serious / least serious/fine
↓ / ↓ / ↓
imprisonment often over a year / imprisonment of a year or less / imprisonment light if any
↓ / ↓ / ↓
possible fine / possible fine / usually fine

Essential Elements of a Crime

Criminal act

Defendant must have actually performed the prohibited act

Actual performance is called actus reus (guilty act)

Criminal intent

Defendant must be found to have possessed the requisite state of mind when the act was performed

The state of mind is called mens rea (evil intent)

Strict liability (liability without fault)

Some states impose criminal liability without a finding of mens rea (intent) often imposed for reckless conduct.

Criminal Law / vs / Civil Law
↓ / ↓
state brings suit / individual brings suit
↓ / ↓
punishment / damages
↓ / ↓
beyond a reasonable doubt / preponderance of the evidence

Stages of Pretrial Criminal Procedure

Arrest—usually warrant with probable cause

Indictment or information—formal charge by grand jury or magistrate

Arraignment—formal charge and plea à guilty, not guilty, nolo contendare

Plea bargaining—the deal

Criminal Trial

All jurors must unanimously agree before the accused is found guilty of a crime

If even one juror disagrees, the accused is not guilty

If all jurors agree the accused did not commit the crime, the accused is innocent

A guilty defendant can appeal not the government.

Crimes Affecting Business

Robbery—taking of personal property with fear or force

Burglary—breaking (sometimes) and entering with felonious intent

Larceny—wrongful taking of personal property

Theft—taking of personal property without consent

Receiving stolen property—with intent to deprive owner

Arson—burning

Extortion—obtaining of property with fear or force

Credit card crimes—misappropriation and use

Bad checks—knowledge of insufficient funds

White-Collar Crimes

Embezzlement—fraudulent conversion of entrusted property

Criminal fraud—property through deception or trickery

Mail & Wire fraud—use of mail or wires to defraud

Forgery—fraudulent making or altering of written document

Bribery—use of bribes

Racketeer Influenced and Corrupt Organizations Act (RICO)—pattern of racketeering activity

Money Laundering Control Act – burying of illegal money

Inchoate Crimes

Inchoate crimes include incomplete crimes and crimes committed by nonparticipants

Examples include

Criminal conspiracy—agreement with overt act

Attempt to commit a crime—attempts crime

Aiding and abetting the commission of a crime—assists in a crime

Corporations may be held criminally liable for actions of their officers, employees, or agents. Sanctions usually include fines, loss of license or franchise, and others.

Constitutional Safeguards

14th Amendment—due process

4th Amendment—unreasonable search and seizure /warrants/exclusionary rule/warrantless searches

5th Amendment—self-incrimination by natural persons/immunity/double jeopardy

6th Amendment—trial by jury/cross-examination/lawyer/speedy trial

8th Amendment—cruel and unusual punishment

Federal Antiterrorism Act of 2001

Special Intelligence Court

Nationwide Search Warrant

Roving Wiretaps

Sharing of Information

Detention of Noncitizens

Bioterrorism Provision

Anti-Money Laundering Provisions

IV. Objective Questions:

Terms:

1. In a criminal context, the ______refers to the guilty act, while the ______refers to the accused’s guilty intent.

2. Crimes can be divided into three separate classifications: ______, ______, and ______.

3. To be found guilty of a crime, the accused must be found to have had the required state of mind. Where the accused purposely commits an act, this is ______intent. Where the accused acts recklessly, this is ______intent.

4. To arrest someone, the police must usually obtain a warrant. The warrant must be based on a showing of ______.

5. When a person is formally charged with a crime, he or she is issued either a ______from a grand jury or a ______from a magistrate.

6. At a criminal trial, the government's burden of proof requires that it prove ______that the accused is guilty.

7. Assault, battery, and murder are examples of crimes against the ______while robbery, burglary, and theft are examples of crimes against ______.

8. Criminal conspiracy, attempt to commit a crime, and aiding and abetting are all examples of ______crimes.

9. The Supreme Court created the ______to allow use of otherwise illegal evidence from a search if the police reasonably believed they were acting lawfully.

10. The Fifth Amendment's privilege ______provides that no person will be forced to be a witness against himself.

True/False:

1. ____ In a criminal action, the parties are the victim and the defendant.

2. ____ If a statute imposes absolute liability for a crime, mens rea does not have to be proven.

3. ____ Even today, corporations are never held criminally liable because it is impossible for a corporation to have a criminal mind.

4. ____ If police do not have time to get an arrest warrant against a fleeing person, they can arrest the person without probable cause.

5. ____ A grand jury determines a person's guilt in serious crimes such as murder.

6. ____ If the accused enters a plea of nolo contendere, the government has the option of accepting the plea or requiring the defendant to plead either guilty or innocent.

7. ____ In a criminal trial, all jurors must unanimously find the accused guilty beyond a reasonable doubt for a conviction.

8. ____ Under RICO, to prove a pattern of racketeering, no less than two predicate acts must be committed within a ten-year period.

9. ____ To be liable for criminal conspiracy, the accused must have actually committed a crime.

10. ____ The exclusionary rule prevents illegally obtained evidence from being used against the person searched.

11. ____ The Federal Antiterrorism Act of 2001 allows for the detaining of residents up to seven days without filing charges.

12. ____ Persons injured by a RICO violation have a private civil action against a violator for treble damages.

Multiple Choice:

1. Vice President Vance works for Capital Corp. Vance forged several official documents to get money from Bigtown Bank. The bank ultimately loaned money to Capital Corp. for various business operations.

A. Only Vance can be liable for these actions since an employee of a corporation is always liable for his illegal action, and the corporation can never be held liable because it cannot form mens rea.

B. Only the corporation can be liable for these actions because the forgeries benefited the corporation. Vance is not liable because he did not personally benefit.

C. Neither the corporation nor Vance can be liable because the forgeries benefited only the corporation. Since the corporation cannot form mens rea, it cannot be guilty of a crime.

D. Both Vance and the corporation can be liable. Vance is liable for forgery regardless of whether he or the corporation benefits. The corporation may be liable for the crimes of its employees.

2. Accused Adam is tried by a jury. Only one of the jurors is not convinced beyond a reasonable doubt that Adam is guilty. All other jurors are sure Adam is guilty.

A. Adam is convicted because a majority of the jurors believe he is guilty.

B. Adam is acquitted because in a criminal trial, the jury must be unanimous to convict.

C. Adam is convicted because although one juror is not convinced beyond a reasonable doubt, the government only has to prove Adam's guilt by a preponderance of the evidence.

D. None of the above.

3. Andy Accountant manages the financial accounts of Multimill Co. Andy decides Multimill will not notice a $10,000 withdrawal from a few of its accounts. Ultimately, Andy takes about $100,000 from Multimill Co. Andy has committed:

A. Theft.

B. Extortion.

C. Embezzlement.

D. Larceny.

4. Hardcore Cop enters a house with a valid search warrant that states he can search for and seize any firearms such as guns, pistols, etc. However, Hardcore sees a large bag of cocaine lying on the coffee table and seizes that as well.

A. Hardcore legally seized the cocaine because it was sitting out in plain view.

B. Hardcore legally seized the cocaine because, once he had a valid search warrant, he could take anything he thought was suspicious.

C. Hardcore illegally seized the cocaine because, if it is not listed on the warrant, it can never be seized.

D. None of the above.

5. Hardcore Cop arrests Running Randy for alleged bank robbery. Before he says anything else, Hardcore says, "You might as well admit it now and save us both a lot of time." Randy looks at him and replies, "All right, all right, I did it--Are you happy?"

A. Randy's confession is admissible evidence since Hardcore did not coerce him.

B. Randy's confession is inadmissible because an accused person must have a lawyer for a confession to be used as evidence.

C. Randy's confession is inadmissible because Hardcore did not inform him of his Miranda rights.

D. None of the above.

6. Defendant Dan is acquitted on murder charges. Under such circumstances, the government can: A. Conduct a new trial.

B. Appeal the decision to a higher court.

C. Do nothing, this decision stands.

D. None of the above.

7.  Defendant Dan is convicted on murder charges. Under such circumstances, Dan can:

A. Conduct a new trial.

B. Appeal the decision to a higher court.

C. Do nothing, this decision stands.

D. None of the above.

8. Convicted Chris is found guilty of criminal RICO violations. Chris had bought several expensive cars and stock in a well known, legitimate computer company with money from his racketeering activity. What is the appropriate punishment for this crime under these circumstances?

A. Imprisonment.

B. Forfeiture of the car.

C. Forfeiture of the stock.

D. All of the above.

9. Shady Sharon and Shifty Sherman agree they are going to rob Wealthy Wendy. Sharon and Sherman drive to Wendy's house. At this point, Sharon and Sherman would be liable for:

A. Criminal conspiracy.

B. Attempt to commit a crime.

C. Aiding and abetting the commission of a crime.

D. None of the above.

10. Assume the same facts as in question 9 except that Sharon and Sherman have only agreed to do this, but are not yet in the car. At this point, Sharon and Sherman would be liable for:

A. Criminal conspiracy.

B. Attempt to commit a crime.

C. Aiding and abetting the commission of a crime.

D. None of the above.

V. Answers to Objective Questions

Terms:

1. Actus reus, mens rea. Both elements are necessary to the definition of a crime.

2. Felonies, misdemeanors, violations. These classifications are set out in statutes.

3. Specific, general. The statutes describe the type of intent required.

4. Probable cause. Case law interpretation of this standard is controversial.

5. Indictment, information. Each state has its own detailed rules of criminal procedure.