Business Law Chapter 7

Robbery

must states define robbery as the forceful and unlawful taking of personal property. Someone who steals your wallet undetected while you are walking down the street has committed theft. Someone who tackles you, pins you down, and wrests your wallet from you has committed robbery. Someone who threatens you with a deadly weapon while taking your property would likely be charged with aggravated robbery, which carries a more severe penalty.

Ponzi Scheme

an investment swindle in which high profits are promised from fictitious sources and early investors are paid off with funds raised from later ones

White Collar Crime

white-collar crime as a variety of nonviolent illegal acts against society that most often occur in the business context. ex. mail fraud, bribery, embezzlement, and computer crimes. Class Notes- 1) Employees commit crime 2) Crimes against business 3) non violant

unlawful appropriation of data or services.

employee who uses his or her comp in a manner not authorized by the employer, such as to run a personal business on the side, has committed a crime, most often theft of computer assets.

Affirmative defenses

which are excuses for unlawful behavior. Some of the most common are infancy, mistake of fact, intoxication, insanity, duress, and entrapment.

Pretexting

Using fraudulent means to obtain information about someone's phone use. is using or causing others to use false pretenses, fraudulent statements, fraudulent or stolen documents, or other misrepresentations, including posing as an account holder or employee of a telecommunications carrier, to obtain telephone records of another.

bankruptcy fraud

a debtor might hide assets so that they will not be considered during the proceedings, or a creditor might file a false claim against a debtor.

hacker

a person who illegally accesses a computer system to obtain info or steal money.

involuntary intoxication

a person who was forced to ingest or involuntarily ingested an intoxicating agent can claim this.

the irresistible-impulse test

allows a verdict of not guilty by reason of insanity even if the accused knew a criminal act was wrong, as long as some "irresistible impulse" resulting from a mental deficiency frove the person to commit the crime.

Extortion

also known as blackmail is the making of threats for the purpose of obtaining money or property.

securities fraud

also known as stock fraud and investment fraud, is a deceptive practice in the stock or commodities markets that induces investors to make purchase or sale decisions on the basis of false info, frequently resulting in losses.

False Entry

an entry in the books of a bank or corporation designed to represent funds that do not exist

Defalcation

the misappropriation of trust funds or money held in a fiduciary capacity

False Token

A false document or sign of existence used to perpetrate a fraud, such as making counterfeit money

Probable Cause

Any essential element and/or standard by which a lawful officer may make a valid arrest, conduct a personal or property search, or obtain a warrant.

Mortgage and Real estate

Any fraudulent act committed by anyone involved in a real estate transaction, including sellers, buyers, mortgage brokers, title closers, land developers, and real estate lawyers.

health care fraud

Any fraudulent act committed in the provision of health care products or services. is top priority after violent crime.

Elements

Class Notes- Actus Reus Mens Rea -purposefully (specific wrongful behavior for specific wrongful results) -knowingly (plan? intent?) (knows it's wrongful but didn't confirm if it was a crime or not. Still be knowing). -reckless (plan? intent?) -negligent

Prosecutor (not tested on)

Criminal procedure differs from civil procedure in several key ways. First, the gov, as *prosecutor,* always brings the criminal case, whereas in a civil case the plaintiff filing the case can be an individual, business, or gov entity.

Check Kiting

Drawing checks on an account in one bank and depositing them in an account in a second bank when neither account has sufficient funds to cover the amounts drawn. Just before the checks are returned for payment to the first bank, the kiter covers them by depositing checks drawn on the account in the second bank. The brief delay in transferring funds from one bank to the other, known as the "float" time, creates an artificial balance in the account.

Level of intent

From Class Notes- -Felony- 1 yr and 1 day, lose some of your civil rights when convicted of felony. More than 1 yr or death. Lose right to vote, carry a firearm (2nd amendment), jury service, can't get some jobs. -Misdemeanor 1 yr or less -Petty offenses- decriminalized, but a violation. (citation)

Corporate Liability

From Class Notes- when business people are going to be liable for crimes. can hold corps liable for crimes today, fines, revoke license, business shut down. Impute liability- Corp -> Owners. gov, state themselves had to get at the people themselves because they could open other business and continue. 1) acting within scope of employment. 2) acting with purpose of benefiting the corp. 3) Act was imputed to the corp. synonyms of Impute: attribute to, ascribe to, assign to, credit to.

about the categories

The statue defining the crime usually establishes whether the crime is a felony, misdemeanor, or petty offense. Crimes may also be federal or state, depending on whether they are enacted by the state or federal legislature.

Embezzlement

The wrongful conversion of another's property by one lawfully in possession of it.

False pretenses

another type of fraud is the illegal obtaining of property belonging to another through materially false representations of an existing fact, with knowledge of their falsity and intent to defraud. ex. Suppose Jim goes door-to-door selling vacuum cleaners at an amazing discount. To obtain the discount, the customers must pay immediately for delivery in three to five business days. However, Jim has no vacuum cleaners and does not plan on delivering any.

duress

any unlawful act or threat exercised on a person whereby the person is forced to enter into an agreement or to perform some other act against his or her will.

Misdemeanors

are less serious crimes punishable by fines or imprisonment for less than one year.

infants

by law, persons under the age of majority (the age at which someone becomes a legal adult).

insanity

defendants can claim this is their mental conditions when the crime was committed was so impaired that they could not (1) understand the wrongful nature of the act or (2) distinguish between right and wrong in a general sense.

entrapment

defense applies if the idea for a crime originated with a police officer or some other gov official who suggested it to the defendant, who would not otherwise have committed the crime.

mistake-of-fact

defense tries to prove the defendant made an honest and reasonable mistake that negates the guilty-mind element of a crime. Proving that a mistake of fact was reasonable, however, is often difficult.

Necessity

defense when "the harm or evil sought to be avoided by such conduct is greater than that sought to be prevented by the law defining the offense charged." A person could use the necessity defense if he or she broke into a store to prevent arson from occurring at night.

Fraud

emcompases a variety of means by which an individual intentionally uses misrepresentation to gain an advantage over another. Fraud generally required the following three elements (1) a material false representation made with intent to deceive (scienter), (2) a victim's reasonable reliance on the false representation, and (3) damages. Class Notes- (1) False representation of a material fact. Material facts are facts that are so important that it leads to decision of person. Ex. misrepresenting the material of a house, color, sq. (2) reasonable reliance. Jury determines what's reasonable. Has to be reasonable, not like take that the ocean is red as fact. (3) Damages, has to be same type of loss to you.

Felonies

include serious crimes, such as murder, that are punishable by imprisonment for more than one year or death.

virus

is a computer program that rearranges, damages, destroys, or replaces computer data. destruction of computer data is one of the most serious problems facing companies today.

cyber terrorist

is a hacker who intends to exploit a target computer or network to create a serious impact, such as crippling a communications network or sabotaging a business or organization.

Insider trading

is generally the buying and selling of a security, in breach of a fiduciary duty or other relationship of trust and confidence, while in possession of material, nonpublic information about the security. Violations may also include *"tipping"* such information and trading on it by the person "tipped."

Forgery

is the fraudulent making or altering of any writing in a way that changes the legal rights and liabilities of another.

Arson

is the intentional burning of another's dwelling. as well as destruction by means other than burning, such as the use of explosive devices.

Bribery

is the offering, giving, soliciting, or receiving of money or any object of value for the purpose of influencing the judgement or conduct of a person in a position of trust. *bribery of a public official* is a statutory offense under federal law, which also covers bribes offered to witnesses in exchange for testimony. To demonstrate bribery under the federal statue, the government must show three elements: (1)something of value was offered, given, or promised to (2) a federal public official with (3) intent to influence that person's judgment or conduct. "the thing of value" has been construed very liberally; actual commercial value is not necessary. *public officials* - members of congress, government officers and employees, and anyone "acting for or on behalf of" the federal government "in any official function, under or by authority of" a federal government department or agency. Private employees responsible carrying out federal programs or policies are considered public officials. *commercial bribery* is a bribe in exchange for info or payoffs. The Foreign Corrupt Practices Act serves to combat *bribery of foreign officials.*

Larceny

is the secretive and wrongful taking and carrying away of the personal property of another with the intent to permanently deprive the rightful owner of its use or possession. Unlike robbery, larceny does not require force or fear. In the business context larceny occurs, for example, when an employee takes office supplies, such as paper or blank CDs, for personal use. *grand larceny* involves items of greater value, thus, it is a felony and carries more severe penalties than does *petty larceny.*

Stock-option backdating

occurs when an employee falsifies documents to make it appear as if the company had granted options on certain dates.

Burglary

occurs when someone unlawfully enters a building with the intent to commit a felony. commonly referred to as breaking and entering.

Mail Fraud

one of the most frequently prosecuted frauds, the use of mail to defraud the public, which is a federal crime under the Mail Fraud Act of 1990. To prove it, gov must demonstrate (1) an intent to defraud and (2) the use of or causing the use of mail to further the fraudulent scheme.

Liability without fault or strict liability

only certain crimes, typically violations of regulatory statutes, allow punishment without proof of guilty mind; applies to actions that, regardless of the care taken, are specifically prohibited, such as selling cigarettes or alcohol to a minor. Although a business might not have intended to sell to a minor (thus lacking a guilty mind), the statutory violates still allows liability to be assessed.

Computer Crimes

refers broadly to any wrongful act that (1) is directed against computers, (2) uses computers to commit a crime, or (3) involves computers.

Property crimes against business

robbery, burglary, larceny, arson

Petty offenses

such as violating a building code, are minor misdemeanors usually punishable by a jail sentence of less than six months or a small fine.

To punish an individual for criminal behavior

the government must demonstrate the two elements of a crime: 1. Wrongful behavior, that is *actus reus* or a guilty act. 2. Wrongful state of mind, also known as *mens rea* or a guilty mind. The government thus must show that a defendant committed a prohibited act with a wrongful intent. To prove actus reus, the gov must establish the nonmental elements of the crime and demonstrate that a prohibited act or consequence resulted because of the defendant's actions. To prove the second element mens rea, the gov must prove that the defendant acted with purpose, knowledge and recklessness, or negligence, depending on which of these states of mind is required b the law defining the relevant offence. The defendant's type of wrongful state of mind helps determine the seriousness of the punishment. *purposefully* commit a crime by engaging in a specific wrongful behavior to bring about a specific wrongful result. *knowingly* commit a wrongful act if the person knows the act is wrongful or believes so yet does nothing to confirm or disconfirm this belief. *reckless* if a crime act occurs when the individual consciously ignores substantial risk. *negligent* if he or she does not meet the standard of care a reasonable person would use under the circumstances.

vicarious liability

the liability or responsibility imposed on a person, a party , or an organization for damages caused by another, most commonly used in relation to employment, with the employer held vicariously liable for the damages caused by its employees. Legal Principle: As a general rule, when a lower-level employee commits a crime, she or he will be individually liable for the crime, and under the responsible corporate officer doctrine, the employee's manager, and any other corporate official who could have prevented the crime, can also be held vicariously liable for the crime.

Fraudulent Concealment

the suppression of a material fact that a person is legally bound to disclose

justifiable use of force

the use of force that is necessary to prevent imminent death or great bodily harm to oneself or another or to prevent the imminent commission of a forcible felony. the best-known example is self-defense in protection of your life. Deadly force is unjustifiable where the threat of deadly force does not exist, and it can never be used to protect property, as the law values life over property.

Telemarketing Fraud

there are different techniques that are used to commit telemarketing fraud. uses telephone to commit a fraudulent act. *cramming* is a scheme in which companies bill consumers for optional services they did not order. Another is *slamming*, in which consumers are tricked into changing their phone service to another carrier.

strict-liability offenses

those offenses that do not require state of mind.